Our circulation and readership have grown 10% in last 2 years: Girish Agarwal, DB Group
Girish Agarwal, Promoter, Director, DB Group, asserts that print is thriving and in a big way
IRS Q1 2019 report revealed that Dainik Bhaskar has seen sustainable growth in terms of AIR. Bhaskar had an AIR of 1,53,95,000 in IRS 2019 Q1, from 1,38,72,000 in IRS 2017. But DB Corp Ltd recently posted a 15.4% decrease in profit after tax (PAT) to Rs 273.8 crore, for the year ended March 2018 while their advertising revenue grew by 7.4%.
When exchange4media spoke to Girish Agarwal, Promoter, Director, DB Group, to understand what the company feels about its balance sheet and IRS data, he pointed out that it all assures everyone that print is thriving.
“I think the larger vision is the improving fundamentals of prints in India. Let’s start with the readership. The latest IRS report says print has added 1.8 crore, new readers, in multiple languages. Out of this, 95 lakh readers have been added to Hindi. This report also says that most of these readers have come from NCCS A and B also and the younger age group. If I talk about circulation, there has been a growth in circulation. In the last 10 years, as per ABC, certified publication numbers have gone up by almost 5%. At the same time, the quality of journalism and content are also important aspects. If that had not been the case, why will people read or buy more?” As per IRS 2019 Q1 total readership, NCCS A segment grew by 9%, NCCS segment B grew by 7% while the NCCS AB segment went up by 8%. The leadership in the 16-19 years age group saw a growth of 5% whereas the 20-29 years age group saw a 4% increase in growth.
He reveals that all the publishers are now gung-ho about it and are investing in the digital platform also. “As it has happened in the west, the digital platform is becoming paid mediums. So the Indian publishers are also hoping that going forward the way they charge for print, they will be able to charge for some amount for their digital publication.” But monetization of this medium is still witnessing roadblocks. “You pay for content when you see merit in that. If I am reading a newspaper website, and you get in-depth knowledge about a particular topic from that website, that’s when you will be ready to pay. Publishers are ready and they have the content. Now they will want payment. Your content has to be so superior and exclusive that the consumer doesn’t mind paying it.”
Agarwal also mentions why from the advertising point of view, things have been slow. “From the advertising perspective, I understand that the last three years have not been great. Certain categories are shrinking such as government ads, which are print-heavy advertising have declined. Thanks to the DVP rate increase last year, most of the publishers have shown good growth in this category. In other categories, because GDP is not growing, advertising is also subdued except in the FMCG sector.”
When pointed out that advertising on Television is growing faster than print, Agarwal explained, “That’s because 50-60% of advertising on Television comes from FMCG brands. So that category has still been able to grow. But despite that print has still been able to show 6-7% growth. It’s true that print has a larger base but even then, three of my categories took a beating - Government, auto, banking and finance, and real estate. Now, this is a phenomenon which needs to turn in the next couple of years.” Agarwal also mentioned that there is a scope of 20-50 paisa cover price increase.
While the group is not adding any more markets to its existing list which contains Bihar, Madhya Pradesh, Chhattisgarh, Rajasthan, Haryana, Punjab, and Gujarat, it plans to go deeper into these markets and doesn’t mind making big investments if need be. “We already have a huge base. We would like to go deeper and explore it furthermore. It includes more printing centres. In Rajasthan, we have some 16 printing centres. We would want papers to be delivered at 4 in the morning because a distributor takes 2 hours to pick the paper and deliver to your homes. Our target is that before 6 am, newspapers should be delivered at every home. For that, I will have to reduce the travel time.” When asked about the kind of investment that will be needed, he said, “Even if it requires the investment of Rs 100 crore over a period of time, like 2 years when we invested Rs 200 crore in the Bihar market; we are happy to do that again going forward.” It was revealed last year since there was no requirement; they made an investment of Rs 30-34 crore. “This year we close our balance sheet with higher cover price with EBITDA of Rs 521 crore for the company despite the higher newsprint prices. Had that been not there, I would have closed at almost Rs 700 crore.”
In fact, Agarwal points out that the decrease in profit by 15.4% is due to the higher newsprint prices. “For all publication, profit has gone down this year. The prices had gone up by 40%. Now it’s coming down and that will have a big relief for us.” He believes the publisher needs to be more communicative towards advertisers. “As a print industry, we need to be more communicative with our advertisers because print has always been under this impression that whatever we will do, it will be known to all. Because of the advent of other mediums, who are talking about themselves, we might also have to educate people the changing fundamentals of the print.”
Speaking about MYFM’s growth prospects, Agarwal pointed out, “We are very happy with those 30 stations that we are operating now. Our profitability and EBIDTA is one of the highest in the industry. We are looking for more markets in UP. The average EBITDA margin of the last three years is more than 30-40% that is the highest in the industry.” They, however, have no plans to enter the metros but would like to bid for auction in the next phase well.
For the next year, DB Group plans to have a double-digit advertising revenue expectation. “Both our circulation and readership have grown by 10% in the last 2 years. We would like to continue the 5% percent circulation growth Y-O-Y. With 5% circulation growth I have been able to have 7.2% of advertising growth. So when the market gets better, it will see double-digit growth. Now that newsprint prices are going down, the profit should go up by 15-20% now.”
When asked about closing the gap between Dainik Bhaskar and Dainik Jagran, Agarwal said, “Frankly speaking I don’t consider Jagran as a competition. Their core market is UP and we don’t operate there. If you look at the circulation report by ABC, we are 43 lakh copies, Jagran is at 34 lakh copies. We have a good 9 lakh lead over Jagran. Now what happens in the market in UP and Bihar is that the readership of newspapers is much higher because of the density of population whereas, in Gujarat or Madhya Pradesh, the size of households are smaller. Hence the readership multiplication goes in Jagran’s favour which is fair enough in that market.”
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