Why INS surcharge diktat could backfire on publishers

When the Indian Newspaper Society (INS) advised member publications on July 22 to levy a uniform 15% advertising surcharge from August 1, it sought to address mounting financial pressure on newspaper publishers.

But in doing so, it has opened another debate: Can every newspaper across languages and regions realistically charge the same percentage increase when advertising rates have never been uniform to begin with?

Publishers have individually sought advertising rate revisions for several years, citing rising newsprint, printing and distribution costs. Those requests, however, have found limited traction with advertisers, e4m has reported earlier this month. 

Read: INS advises member publications to levy 15% advertising surcharge from August 1

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Against this backdrop, the INS advisory is being viewed as an attempt to make a collective case for improving print's economics rather than leaving individual publications to negotiate in isolation. Leading media houses have welcomed the move. Satyajit Sengupta, Executive Director of HT Media, said, "It's much needed looking at input costs going up."

The advisory, which is recommendatory rather than mandatory, has nevertheless created a flutter within the advertising industry. Advertisers argue that a common percentage increase sits uneasily with a marketplace built on differentiated value.

A CMO of a leading FMCG company said, "Unlike cover prices, advertising rates are negotiated individually between publishers and advertisers. A national English daily, a regional language newspaper, a business publication and a niche local title all command different rates based on a combination of readership, circulation, market share, editorial environment, advertiser demand, inventory and long-standing commercial relationships."

Echoing this view, Ashish Bhasin, Founder, Bhasin Consulting Group and former CEO, dentsu Asia Pacific, said the market—not an industry advisory—ultimately determines what advertisers are willing to pay.

"Whether publishers can command a sweeping 15% surcharge will depend entirely on supply and demand. If a publication can justify a higher price through its audience quality, readership, content and effectiveness, media buyers will pay for it. But pricing should ideally be a bilateral decision between the buyer and the seller, not something prescribed by a third party."

His argument goes to the heart of the debate. A newspaper that enjoys market leadership in a metro, dominates a language market or delivers a highly engaged readership may possess greater pricing power than a smaller publication competing for the same advertising budgets. 

Conversely, some publishers may find even a modest increase difficult to negotiate in categories where advertisers already have abundant alternatives across television, digital and retail media. This disconnect between differentiated newspaper value and a uniform surcharge has fuelled the debate within the advertising community.

Broken Economics Meet Market Reality

The debate also comes at a time when the economics of print remain uneven across markets. Industry executives point out that print circulation—particularly among English-language newspapers—has yet to fully recover from the disruption caused by the Covid pandemic. While advertising rates have not entirely reflected this shift, they argue that a uniform surcharge could prompt marketers to reassess not just the additional 15% but their overall allocation to print.

“The 15% surcharge could further subdue and curtail the flow of advertising - which is already under pressure. Rather than alleviate the hit from costly newsprint, the surcharge could worsen the advertising situation resulting in a double whammy for print as a whole,” says Dr Sandeep Goyal, MD of Rediffusion. 

Shubhranshu Singh, former Global Chief Marketing Officer, Tata Motors Commercial Vehicles, believes publishers are justified in seeking improved economics, but says acceptance of a common surcharge is far from guaranteed.

"Publishers are right that newsprint economics have broken. The pressure is real and long overdue for a conversation. But the open question is whether a uniform 15% levy recovers margin or accelerates the very shift in advertising share that print can least afford,” Singh points out. 

Singh’s observation reflects a broader shift in the media landscape. As marketers increasingly prioritise digital channels for their measurability and targeting capabilities, both print and television have seen their share of advertising expenditure gradually decline, intensifying competition for every advertising rupee.

Besides, many advertisers have already signed annual rate agreements, making a blanket surcharge commercially challenging. "Most CMOs I speak with have annual rate agreements signed. Many may treat this as a reason to reopen the plan rather than pay more for the same space," Singh stated.

For media buyers, the issue extends beyond the percentage itself. Advertising rates are rarely determined by production costs alone. Negotiations typically take into account a publication's audience profile, category performance, inventory availability, market leadership, bundled offerings and the advertiser's overall spending relationship with the publisher, industry executives say.

Tarun Nigam, Media and Entertainment Consultant and former WPP and Publicis executive, takes a nuanced view. "Having spent years on both the media and agency sides, I also understand the economics behind such a decision. But I am not sure a 15% surcharge is the answer."

"The larger reality is that we are already fighting a battle for print's share in the media plan. Clients are increasingly asking us to think digital-first, every investment is being questioned through the lens of ROAS, and marketers have far more measurable alternatives available today than they did even a few years ago. In that environment, making print 15% more expensive could only push it further back in the consideration set," Nigam noted.

According to him, the issue is not whether publishers have a genuine cost challenge—they clearly do. The question is whether passing that cost uniformly to advertisers will solve the problem or end up creating another one.

Whether publishers implement the surcharge uniformly—and whether advertisers agree to absorb it—will become clearer in the coming weeks. But the INS advisory has already shifted the conversation beyond rising newsprint costs.