//End of boom time for India's newspaper market

End of boom time for India's newspaper market

IN Mumbai’s boisterous media world, DNA is not the stuff of crime sleuths but the masthead of Daily News & Analysis, a bright and breezy newspaper that is quite prepared to put a half-page ad on the top of its front page. It doesn’t hurt that the ad, for mobile phone operator Airtel, features cricket star Mahendra S. Dhoni, who is fast eclipsing Sachin Tendulkar as the national sporting heart-throb.

Two of India’s smartest media operators, Zee TV founder Subhash Chandra and Hindi language newspaper proprietor Ramesh Agarwal, set up DNA as a joint venture in 2005 to challenge the starchy but well-entrenched Times of India, which dominates English language publishing in Mumbai and around the nation.

Four years on, DNA remains a minor irritant to the mighty Times, though bigger contenders such as Hindustan Times and Mid-Day are also slicing into its readership and ad budgets.

As part of its counter-attack, the Times pumps out the Bombay Times and the Mumbai Mirror as tabloid supplements to its flagship, and keeps business on side with its financial daily, the Economic Times.

All this action is taking place in a print market that witnessed fantastic growth for four years, before hitting the wall in the last two months of 2008.

After having its best month on record in October 2008, the Times, for example, has seen advertising decline by 25 per cent since then.

Even with a spending boost from the national elections held in April and May, newspaper sizes are coming down, staff are being retrenched, marginal titles closed and expansion plans put on hold.

Rising newsprint costs and the economic slowdown are taking their toll.

Still, the long-term outlook for Indian media remains very bullish, according to Mumbai-based media expert Rajesh Jain, head of KPMG’s information, communication and entertainment division.

Jain, principal author of a recent landmark report on the media and entertainment industries, predicts print media will grow by about 9 per cent a year to reach annual revenues of about $7.7 billion by 2013.

“With India’s young population and growing incomes, the domestic demand story is intact,” Jain told Media last week.

Jain believes the most significant development in print is the rapid advance of regionalisation, meaning local content in local languages.

“For the last five years, the regional newspapers have grown far faster than the nationals,” he says.

In this linguistically diverse market, it looks at first glance as if English language newspapers are struggling to be seen.

None rates among the 10 most widely read newspapers, where Hindi titles, led by the 55 million readership Dainik Jagran, take the top four spots.

The Hindi papers are followed by Tamil, Marathi, Bengali and Telugu titles, and it’s not until 11th place is reached that the Times of India pops up with 13.3million readers.

But appearances can be deceptive where money is involved. The per-reader cost of an advertisement in the Times is about nine times its Hindi counterpart, and 13 times one of the other major languages, according to Jain.

“The English language media commands the maximum pricing power because it’s aspirational,” he says.

That helps explain why the publisher of the Times, the unlisted Bennett, Coleman & Co Ltd, claims it is the biggest and most successful media group in India. BCCL is controlled by educationalist and entrepreneur Indu Jain and her sons Samir and Vineet Jain.

Among English language media, the Times is comfortably ahead of the Hindustan Times (6.35 million readers, according to the latest Indian readership survey) and The Hindu (5.3 million), which has its base in Chennai.

Two other regional dailies, The Telegraph in Kolkata (2.9 million) and the Deccan Chronicle in Hyderabad (2.8 million), occupy fourth and fifth spots, followed by the Economic Times in sixth spot with 2 million readers.

The Economic Times’ category rivals are minnows in comparison: Mint, a financial daily launched two years ago by the Hindustan Times in partnership with The Wall Street Journal, has 139,000 readers, while the Business Standard has about 60,000.

Though India’s newspaper market is the second largest in the world after China, its highly fragmented nature works against productivity, quality and innovation.

Mumbai journalist Shishir Joshi, who stepped down recently after four years as editorial director of Mid-Day, says editorial values are at risk, with some papers running news articles in return for payment.

KPMG’s Jain says there is also a huge “penetration gap” for print media in India, with only about 23 or 24 per cent of the population reading a newspaper. As literacy and income levels rise, so too should newspaper readership.

Jain says he hopes the figure will more than double within a decade.

For foreign investors, the opportunities are substantial, even with the existing 26 per cent foreign investment cap.

On growth prospects and valuations, Jain says investors should be looking at India’s regional print media.

 

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Author of this article, Geoff Hiscock writes on Indian business and is the author of India’s Global Wealth Club and India’s Store Wars, both published by John Wiley & Sons
 
Article from:  The Australian|  April 20, 2009,