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Scale tilting in favour of Hindi, vernacular in print industry

The FICCI-KPMG report says that the English segment grew by 3.6 per cent against the industry growth of 7.3 per cent, while Hindi and vernacular grew at 9.8 per cent

BestMediaInfo Bureau | Delhi | March 19, 2012

The FICCI-KPMG report on Indian Media & Entertainment industry recently unveiled at the FICCI Frames 2013 has pointed out that the Print industry has a promising future in India, but at the same time, it said that the scale is tilting in favour of Hindi and vernacular print markets.

“Over the years, there has been a gradual increase in the market share of vernacular newspapers. The combined share of Hindi and vernacular dailies has risen from 53 per cent in 2008 to 61 per cent in 2012. The industry expects this trend to continue largely due to volume growth driven by the launch of new local editions and gradual improvement in advertisement rates of these markets,” says the FICCI-KPMG report.

Long-term growth looks promising

Print media market  (In Rs billion)

2011

2012

2013p 2014p 2015p 2016p

2017

CAGR (2012-17)
English Market

83

86

90

94

99

104

109

4.80%

Advertising

57

59

62

66

70

74

79

6.00%

Circulation

26

27

28

28

29

29

30

2.10%

Hindi Market

62

68

75

83

92

103

114

10.80%

Advertising

41

45

49

56

64

73

83

13.30%

Circulation

22

24

26

27

28

30

31

5.60%

Vernacular Market

63

69

76

85

94

105

116

10.90%

Advertising

42

46

51

57

66

75

85

13.30%

Circulation

21

24

26

27

28

30

31

5.80%

Total industry size

209

224

241

261

285

311

340

8.70%

While English print commands higher ‘cost-per- thousand’ (CPT) compared with Regional print, metro markets are challenging in terms of advertising and circulation, leading to lower growth for English language dailies. The English segment grew by 3.6 per cent versus industry growth of 7.3 per cent and Hindi and vernacular grew at 9.8 per cent. The segment will also likely face a greater threat from digital platforms, especially considering the imminent shift in media consumption habits due to increased broadband penetration and availability of faster access once 4G is rolled out. The Socio Economic Classification (SEC) and income demographics that the English market addresses is also the market that is most likely to adapt high-speed mobile devices and change reading behaviour.

By 2017, the scale is further expected to tilt in favour of the Hindi and vernacular markets – together constituting 64 per cent of the industry revenues growing at a CAGR of 10.8 per cent and 10.9 per cent, respectively. The English market will be worth Rs 114 billion growing at a CAGR of 4.8 per cent.

Advertising continues to be the key contributor and is the cornerstone of the print industry’s performance and has witnessed one of the most, if not the most, challenging years in a decade. The strong correlation between economic growth and advertisement spends was reflected in weak advertiser sentiment. Some of the big spending sectors such as Education, Banking, Financial Services and Insurance, Telecom and Retail tightened budgets and the advertising spends remained flat or declined. The slowdown in advertising volumes was particularly more intense in the case of the English market. The share of English print advertisement volumes declined from 32 per cent in 2011 to 27 per cent in 2012. Vernacular dailies continued to enjoy volume growth with their share increasing from 37 per cent in 2011 to 39 per cent in 201210.

Language markets continue to grow in the print sector, and revenues from Hindi and vernacular segments are fast catching up with English, which has to date enjoyed a majority share of the value. Hindi and vernacular language publications have always enjoyed a healthy readership base. In 2012, nine out of the top ten dailies being published were either in Hindi and vernacular language publications. However, in the past this segment had lagged in its ability to effectively monetise.

In 2007-09, the advertising rate premium commanded by English newspapers was roughly 10 times more than that of regional language papers. The scenario is now changing with the premium paid by advertisers for English newspapers steadily declining, being in the range of 3-4 times in 2012-15.The industry believes that there is potential for Hindi and vernacular dailies to further increase their rates.

The two segments (Hindi and vernacular) now contribute approximately 62 per cent of industry’s revenues and cater to 89 per cent of the readership.

Together, the Hindi and vernacular markets are expected to grow at a CAGR of 10.9 per cent over the period 2012-2017, outpacing the English language market’s growth of 4.8 per cent.

The Indian print industry is comparatively better off than its global counterparts, which have been experiencing declining revenues over the past few years. Although the overall Indian scenario looks promising, capitalising on future potential, however, will depend on how the industry deals with the present challenges.

The sector is projected to grow at a CAGR of 8.7 per cent and touch Rs 340 billion by 2017. The opportunity lies in tapping the growth potential of the Hindi and vernacular markets while concurrently the challenge will be to build additional capabilities to explore alternate sources of revenues. Circulation revenues are expected to grow at a CAGR of 4.5 per cent from 2012 to 2017 on the back of increased penetration in regional markets.

Rising literacy, growth in disposable income, brand consciousness and strong commercial development in tier II and tier III cities will together contribute to increased penetration of regional print media. Recent policy measures taken by the government can pave the way for recovery of the Indian economy and restore its fiscal health. With some improvements also likely in the global economy in 2013, the prognosis for the Indian economy looks somewhat better and real GDP growth is expected to be in the range of 6.1 to 6.7 per cent in 2013-1428.

The print industry today is faced with a dynamic environment that is unprecedented – changing business models, consumer and reader demographics present opportunities and challenges that will greatly improve profitability for flexible and aggressive players and erode the bottom line of static players. The prerequisite, therefore, is to plan a strategy that identifies the boundaries between premium and commodity content and build up an effective pricing model around it. Going forward, we may see differentiated models being developed by industry participants to generate additional revenue streams.

Info@BestMediaInfo.com

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