MxMIndia

Tag: Newsprint

  • After circulation & ad revenue going south in 2020, newspapers seems set on the path of recovery, writes Indrani Sen

    Newspaper Industry in India after the Second Wave of the Pandemic

     

     

    By Indrani Sen

     

    Indrani SenThe Indian newspaper industry faced an unprecedented crisis last year after the National Lockdown was declared at a very short notice. Circulation fell drastically when many subscribers, particularly housing societies, shut their doors for the newspaper delivery persons for the fear of the contagious virus being carried by the newspapers or the delivery folk, leading to change is consumption pattern of newspapers. Lack of local transport also prevented the distributors and hawkers from reporting for work. This was followed by withdrawal of commercial advertising as advertisers were worried about a fall in circulation and readership and were themselves affected by choking of distribution pipelines and economic slowdown leading to loss in their sales. The FICCI EY Report on Indian M&E industry 2021 showed that ad revenue of Print came down from INR 206 billion in 2019 to INR 122 billion in 2020.

     

    After the National Lockdown was lifted in 2020, the newspaper industry tried its best to recover their lost grounds. As per the same FICCI EY report, it will take Print four to five years to regain the pre-Covid ad revenues level. However, the industry seemed to be recovering well during the first quarter of 2021 as TAM AdEx data for Jan-Mar 21 showed that 1350 new brands advertised on print during that period.  When compared with Jan-Mar 20, the quarter also showed 9% increase in ad space mostly from Hindi and other language newspapers. Similarly, April-May 2021 recorded better results compared to April-May 2020.

     

    As per TAM AdEx analysis in May 2021, when the second wave of the Covid-19 was at his peak, there was an average 58% growth in ad space per publication as compared to May 2020. However, all was not well as compared to February 2021 and March 2021, the ad space in Print saw a drop of 42% and 29% in April 2021 and May 2021 respectively. As the phased process of unlocking has begun, the newspaper publishers expect that both the ad volume and value would pick up by August 2021 and grow further during the festive season of 2021.

     

    It appears that newspapers were better prepared to handle the second wave of the pandemic in 2021 and the lockdowns imposed by various state governments across the country. Along with the process of gradual unlocking, the newspapers now are looking forward to recovering their lost grounds. The credibility of the printed word, the vaccination drive, revival of the corporate sector and good rain forecasts are the other factors which are expected to contribute to the overall growth of the newspaper industry in 2021. The Print industry has appealed to the government for a stimulus package and an increase in FDI in 2021. The government has not responded so far, but the industry is still hopeful of getting, some positive response though no relief was announced in terms of waiving the import duties on newsprint by the finance minister in her 2021 Union Budget.

     

    The newsprint prices, which saw a decline in the international market (below $300/metric tonne) in 2020, have started going up from the beginning of the calendar year 2021. The price was $670/tonne-$700/ tonne in April-May. The industry expects it to go up further. It appears that quite a few paper mills which used to export newsprint to India and other countries, either shut down their business or migrated to the businesses of producing brown papers and craft papers during last year when their business was hit due to the global pandemic.

     

    As India is far from being self-reliant in newsprint production, our newspaper industry, struggling to recover from the effects of the pandemic, has been hit further by this demand supply imbalance of newsprints in the international market. Many newspapers are increasing the use of indigenous newsprints to balance out their cost of productions.  However, most newspaper owners feel that this crisis of newsprint prices is not going to last for a long term and expect the international market to stabilise before our festive season in the third quarter of 2021.

     

    To sum up, the newspaper industry in India seems to be set on the path of recovery after a severe decline of both circulation revenue and advertising revenue in 2020. In recent times, during the second wave of the pandemic, the industry was not much affected and would have been in a better financial position if they were not hit by the crisis of newsprint prices. It is expected that by end of the calendar year 2021, their overall performance may be better than predicted earlier by media analysts.

  • Okay, it’s a mean question to ask. But, then, that’s Das ka Dum for you. We ask what we think is good to ask. And our dear Wizard with Words answers everything. Sometimes giving it back to us. Let’s read Dr Bhaskar Das’s views on the question in the May 14 edition of Das ka Dum. Read on…

    Das ka Dum with Dr Bhaskar Das | A friend told us that the only reason he subscribes to newspapers is the need for various household requirements. News for him is from digital. Comments

    Bhaskar DasOkay, it’s a mean question to ask. But, then, that’s Das ka Dum for you. We ask what we think is good to ask. And our dear Wizard with Words answers everything. Sometimes giving it back to us. Let’s read Dr Bhaskar Das’s views on the question in the May 14 edition of Das ka Dum. Read on…

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     Q. A friend told us that the only reason he subscribes to newspapers is the need for various household requirements. Also, on a Sunday, one gets the glazed, chikna paper. News for him is from digital. Comments

     

    A. That’s an unkind comment from your friend. It’s quite possible that he/she has deficiency of cognitive nutrition. Otherwise, extraction of some ancillary benefits by an individual can’t trivialise the dominant logic of subscribing a newspaper which is upgradation from the cacophony of infodemic that is prevailing, thanks to the social media. Finally, a sample of one isn’t statistically significant to be extrapolated to the universe population. After all cognitive malnutrition hasn’t been as yet an epidemic.

     

  • The hike in newsprint import duty is sure to impact the bottomline, but it’s time to say goodbye to ‘invitation pricing’, writes Pradyuman Maheshwari

    Time for newspapers to up cover price!

     

    By Pradyuman Maheshwari

     

    The print media in India has reason to be sore with the government. Barring a few, most newspapers and magazine weren’t too negative on the previous regime, and in a sense contributed to its return to power. While some publications may indeed have aired anti-Narendra Modi views in the run-up to the elections, the dosage of that was limited and, one may say, controlled.

    Indian newspapers have forever worked on a lopsided business model. Masterminded by Times of India group vice-chairman Samir Jain in the 1980s, newspapers were being sold at very low cover price to attract and retain readers, and combat (and hence bleed) competition. The ‘invitation pricing’ policy was followed relentlessly by TOI and almost every old and new newspaper thereafter. Casseroles, soaps and assorted gifts were offered to readers in the form of subscription offers. But the price of the papers – especially the English-language ones – were far, far below the monies that went into the making of each issue.

     

    Newspapers that have profited over the last three decades have done so thanks to their leadership and thereby their ability to attract advertising or through allied or dramatically different businesses. Advertising from government or quasi-government organisations ensures that the money registers keep ringing even as the cost to consumer continues to be abysmally low.

     

    Over the last few years, as in the case of internationally sourced products like crude oil, the price of newsprint has also been rising. This has adversely impacted the bottomline of most print media businesses. In fact in the last few years, price of imported newsprint that is largely deployed by English as well as high quality regional papers, had skyrocketed. It went south in late-2018, but by then the ad volumes on print touched a new low. Adspends have been low for other media too, but print has been hit badly with digital steadily weaning away its readers. The Indian Readership Survey 2019 may have shown growth for newspapers but that’s only with the Total Readership metric. With the more widely acceptable Average Issue Readership, the future doesn’t look very bright – esp in the metros.

     

    So if the newsprint prices go north, the cover price should’ve also headed the same way, right? No, instead, newspapers have traditionally been quick to cut their content often even rejigging the mix. Publishers are worried that a hike in the cover price will impact their readership, which could well be true, but clearly the newspaper organisations need to integrate their digital operations better and foresee a future that helps them make monies from their e-presence.

     

    To blame the government for their new-found woes is incorrect. I am sure Prime Minister Narendra Modi will reverse the import duty hike. He has done that in the past, and could do it again.

     

    Yes, our readers are fickle in their ways. They don’t mind spending Rs 20 or whatever on a vada pav, idli sambar, chaat or jhaal-muri, but they will crib about Rs 10 for a copy of the morning newspaper or Rs 60 or 100 for a glossy and informative magazine.

     

    Newspaper owners meanwhile need to smell the coffee – or ink – and up the cover price. Over-dependence on government largesse is detrimental to an independent media. And it’s time that consumers learn to pay for quality content.