And that brings me to the worrying part. Over the 10 years ending 2018, print’s share in the media revenue pie fell from 30 per cent to just over 18 per cent. This was on a growing base, so in absolute numbers the print industry almost doubled in size. But the last three of those 10 years have been tough. From Rs 30,330 crore in 2016 the (ad plus subscription) revenues that newspapers and magazines earned inched to Rs 30,550 crore in 2018 going by data from EY. Funnily enough the reasons have less to do with the internet — the usual suspect in other markets — and more to do with the industry itself.
The biggest, which this column has talked about, is readership data. It is the currency used to buy and sell advertising space, the source of over 70 per cent of industry revenues. For four years from 2013-2017 publishers re-jigged the metric, then sulked and fought about the results it threw up. In those data dark years, advertisers shifted their spends to other media, including digital, even as demonetisation and then the goods and services tax hit the print industry hard. Reliance launched Jio that sent data prices crashing and consumption jumped from 0.8 gigabytes per person per month in 2016 to over 8 GB in 2018.
Think of it this way — one film takes about a GB of data. Over 550 million Indian broadband subscribers are now downloading the equivalent of over eight films every month. It could be films, TV shows, sports or news. Some OTT or streaming video apps now command over 100-200 million unique users. The consumer now has more distractions than he did when publishers started squabbling in 2013.
By the time an IRS that was acceptable to everyone came out, early in 2018, it seemed like it was too late. So far ad revenues haven’t picked up. One reason, say advertisers is that the key metric that IRS touts post the fracas is total readership (in the last month) instead of average issue readership or AIR (yesterday). Going by AIR the numbers haven’t gone up substantially. Advertisers, however, continue to buy ad space based on AIR.
You could argue that advertisers are likely to use the metric most likely to push down rates — whether it is cost per rating point in TV or AIR in print. Also AIR doesn’t work for all advertisers. For long term brand building goals total readership is better. Most publishers and advertisers know this. Not having a metric simply gave them a tool beat down rates and they want to keep it there.
The silver lining is the growth in total readership and the huge uptick in online. According to IRS 2019, about 54 million people are reading a newspaper online. comScore, which focuses on digital media, puts the number of people reading news online at over 279 million. Of the top 20 online publishers from India, 11 are mainstream media houses such as Times Internet, HT Media, India Today Group and The Indian Express Group going by comScore. Most publishers are pretty much on the ball on digital. Online revenue and profit numbers — which I analysed recently for some — are looking good. Early trends, especially on subscription, too are encouraging.
Rising online and offline readership should eventually give a nice bump to revenues, especially in this election year, pushing revenue growth back to 7-9 per cent levels again.
By IRS 2020 the news from the newspaper business should get even better.