It was one of the best times of the year for the sales teams across the print sector. Diwali just got over, with teams at newspaper offices basking in the glory of exceeding targets. Experts recollect October 2016 as one of the best festive seasons they had in recent years.
However, with demonetisation being announced on November 8, little did they know that the sector is set to face its worst ever economic slowdown. âFrom November 9, 2016 till end of February, 2017 the business came to a complete standstill,â says Sandeep Khosla, CEO of Mid-day.
It was only from March 2017 that the business started showing some improvement say industry experts. âUs being based in Mumbai had a slight advantage with municipal elections being around the corner. It did help us gain some of the business. However, even till today, we are not back on track,â Khosla added.
The print media majorly depends on advertisement and circulation revenue. The period arguably saw a fall in both. âPeople were more interested to retain cash for buying necessary items. Purchasing printed matter is not the first priority for anyone,â said Paresh Nath, Publisher, Delhi Press.
âThe advertisers held back,â said Akila Urankar, President, Business Standard.
Elephant in the room
While the industry was trying to recover from the impact of demonetisation, the government made another radical announcement of implementing the Goods and Services Tax (GST).
Indranil Roy, CEO, Outlook Group, told exchange4media that demonetisation did not impact the group as much as the tax reform did. âI think the impact of the slowdown on advertising is a mix of demonetisation and GST. GST is a bigger impact on advertising,â Roy said.
Even Varghese Chandy, vice president, Malayala Manorama, spoke on the same lines clearly signalling that while onlookers expected demonetisation to cause the rampage, the elephant in the room was GST.
âPeople were just learning to deal with demonetisation and GST came affecting the ad spent. The impact was equally bad,â Chandy told exchange4media. It was not surprising when Urankar also pointed it out.
â5 per cent of tax on ads was applied in print media now which was not the case earlier. We will have to see how it settles down,â she said adding that demonetisation did not have any long-term effects. âIn the end, the media will regain its prominence,â Paresh Nath opined similarly.
Strategy to deal with demonetisation
Immediately after Prime Minister Narendra Modi made the announcement on November 8, 2016, it was a well-known fact that chaos had been unleashed. The general publicâs strategy was to save cash and spend it judiciously. However, how did the media sector work on saving its business, if at all it did?
With ad business hitting a roadblock with demonetization, some of those in print business turned to events to make some money. âWe had to start spending money to gain some,â said Khosla. Chandy said that they invested in different media, further adding, âThe strategy was to pray to god that the problem gets under control.â
Khosla also said that the move hurt the regional medium more than national. " Our major revenue comes from retail and realty and both were hit badly post demonetisation. The RERA made things worse for us," he added.
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