Despite mounting challenges, print news industry sees ad volume growth in 2022

Image credit: Rajesh Balouria from Pixabay
Image credit: Rajesh Balouria from Pixabay

The Indian newspaper industry went through tumultuous times during the COVID pandemic period. The unprecedented times brought about by the pandemic took a heavy toll on the industry, ravaging advertising revenue in its wake. Adding to the woes was the rising newsprint cost, which accounts for 30% to 35% of operational costs. But the industry is resilient; it caters to a vibrant and ever-evolving market.

A recent Crisil report says that with the improving of economic activity in the post-pandemic era, ad revenue should rebound as improves. The report, however, cautions that the shift to digital media means that subscription of print newspapers will remain below pre-pandemic levels.

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The print news industry in India is going through a phase of recovery, says Varghese Chandy, Vice President Marketing & Advertising Sales, Corporate Publicity at Malayala Manorama Co Ltd. According to him, the industry had a difficult 2020-21 as well as 2021-22, facing pressure from both revenue and cost sides – reduced advertising revenue and high newsprint prices. “Things are looking better this FY; our H1 advertising revenue is close to where it was in 2019-20. We hope that this trend holds true for the remainder of the FY as well,” he adds.

This year has been great for the print news industry with big value and volume growth in advertising, says Satyjit Sengupta, Chief Corporate Sales and Marketing Officer, Dainik Bhaskar Group. According to him, circulation numbers are also coming back after the pandemic. “There has been some loss during Covid which is showing in the ABC numbers as well. The numbers are quite down for English publications especially in the mega metros,” he points out.

ABC numbers

Recent ABC numbers have shown that there has been a decline in newspaper circulation in India in H1 2022. What are the major challenges that this industry is facing?

Aanchal Kohli, Head – Corporate Communications, SoCheers, feels that in the last few years, the digital news industry was seen gaining momentum, which led to almost all news publications having a strong digital presence.

However, she adds, the pandemic further accelerated its growth and acceptance. “But if we look closely, we still have a lot of audience which relies upon the traditional means of television and newspaper to consume news. This is one of the major reasons that the print news industry has been able to revive itself considerably after the hit it took during the pandemic. The need for hard copies of newspapers has gradually come back as people return to offices and the “usual” practices are restored. With that, the ad spends also increased, and the majority of the newspapers today run 70% advertisements, which are helping run the business,” she explains.

According to Varghese Chandy, a dip in circulation was to be expected as distribution networks across India, especially in the metros, had been affected by the pandemic.

“But the drop we have seen in the ABC is also because of several publishers opting not to be audited in this round. The drop in Kerala was minimal since the government had declared newspapers as essential service and had extended its their support even during the peak of COVID. This meant that supply chains and distribution networks were intact. The fact that Malayalam dailies have the least drop in the latest ABC round of Jan-Jun 2022 is a testament to this,” Chandy explains. A pressing challenge, according to Chandy, is the increased newsprint prices, which substantially increases the cost of operations.

“Another is the lack of readership data. A prolonged period of not having data on reach and effectiveness is not good for any medium. The other problem we face is the perception at the national level that print is declining. Markets like Kerala and other regional titles are strong, and these markets should be looked at differently. Retail advertising which accounts for more than 60% in our newspapers vouches this fact,” he says.

Satyjit Sengupta says that both print value and volume are up this year and the festive period has been really good. Newsprint prices have spiralled, but seem to be softening now, which is a big positive. “Our plans are taking into account the adverse impact of newsprint prices and we are looking at higher revenues to manage this period.”

Digital shift

The pandemic period also saw a massive transition to digital. It appeared that the print is beginning to lose out to digital in a significant way as we have seen in the West. The print industry must do something bring back its readers.

We have not seen a big impact, says Varghese Chandy. “Again, the latest ABC data is proof of this. Of the readers who may have shifted, this change may be transient. Across the world, we are currently seeing consumers’ habits returning to where they were pre-pandemic. We believe that this trend applies to media consumption as well,” he adds.

On the other hand, Aanchal Kohli reminds us that it is definitely a difficult time for the print industry, but the biggest challenge that can be foreseen is the increasing preference towards the digital media by the readers, which is keeping the newspaper subscriptions low.

According to her, the youth today is not habituated to reading newspapers every day; they are instead more likely to pick up their phone and consume information from across the globe as and when it happens. “In addition to that, I also believe that due to the pandemic the number of pages and the movement of good journalists and good stories has affected the readers to move on to the digital media. Lastly, consumers today might find the newspapers mostly filled with ads and with less information that could be another reason for the switch. The print industry needs to create brand awareness around the actual significance of it, which is to provide general news of the nation and the world.”

Indexed ad space

Indexed ad space in English newspapers grew 14% in January-August period this year, while Hindi dailies saw a 7% decline. How has print news performed in terms of ad volumes and revenues so far in 2022?

This happens when you index against last year, when you index against 2019, you will find that regional titles would have had a much better recovery rate, points out Varghese Chandy. “For example advertising growth and recovery during this FY has been encouraging, especially during Onam. We had surpassed our August 2019 revenue during August this year,” he says.

Satyjit Sengupta, who is someone with a strong belief in the power of the good old print, is optimistic about the industry. “While the pandemic created hurdles for print, I think we have also seen some opportunities emerging. Newspapers have emerged as the most credible medium during and after the pandemic. With consumption returning to the markets in a big way, newspapers are also helping advertisers push sales better than most other mediums. With the strong connect and content that a newspaper like Dainik Bhaskar brings forth, the coming few years are going to show some extremely strong performance,” he points out.

Like Satyjit Sengupta, Varghese Chandy is also optimistic about the print industry and its recovery. ”The recovery is on. Our goal is to reach pre-COVID numbers. The biggest challenge on the path to reaching those levels is rate realisation. Agencies and advertisers should closely look into the situation in each state – just because leading publications may have had considerable drops in circulation in metros and hence willing to compromise on rates does not mean that the situation is true for across the country,” he adds.

Sharing his outlook for the print industry in the next 2-3 years in light of the tough market conditions, Chandy says that in Kerala, print will continue to be the largest advertising medium over the next 2-3 years as it continues to deliver value to advertisers.

When it comes to ad volumes, the print industry is doing fairly well now as compared to during the pandemic, says Aanchal Kohli. “Print has been a major part of several brands’ media mix, and now that everybody is amping up their advertising and marketing efforts again, ad volumes on print have grown considerably. It is understandable that the increase in ad space was also required for the news industry to make up for the losses suffered during the pandemic. 2022 was a year of recovery for most of us and newspapers saw that in bulk, especially during the recent festive season,” she says.

Newsprint cost

Newsprint cost has become a major pain point for the print industry. How can this issue be addressed?

Like any other commodity, points out Varghese Chandy, prices depend on supply and demand. “There is a strain on the demand side because of geo-political factors and also because of international transportation bottlenecks. We are hoping that the prices will soften in the new year. Any support from the government to ease the import duty would be a great help in reducing newsprint prices,” he says.

Aanchal Kohli is sanquine about the print industry. According to her, the newsprint costs increased over the years due to various external factors such as shortage of new and recycled newsprint, rise in freight rates, rupee depreciation and fall in supplies, especially during the pandemic. “Now that we are out of the pandemic, some of these factors might let up, but mostly it is just a gradual hike. Moreover, with the increase in demand for the print media by readers, news publishers are likely to have better spends for newsprint.” 

She notes that the COVID outbreak has caused severe disruption worldwide. According to her, the pandemic has significantly shaken the supply chain arms of the printing industry, and it was challenging to recover and serve the readers as before. However, she adds, it has also created potential opportunities for players to hone their skills and better understand their consumers.

“Despite the difficulties, the industry has developed strategies to seize new opportunities. It is constantly experimenting with new business models and innovating its product portfolio to meet the changing printing aspirations of modern consumers with innovative solutions. The digital transformation and the change in readers' behaviour of moving to the online news platforms to consume information was speculated. The move also happened because a major part of the readership audience falls in the millennial age group who believes in consuming content on the go. And they are increasingly being joined by the GenZ, further promoting this medium of news consumption. Even though most news online platforms are slowly moving towards the subscription model, readers are willing to subscribe to read verified and reliable news. While newspapers today start and end with advertisements, which could play against them, pushing readers away,” she elaborates.

As for the ad spends on print, she adds, even though the percentage share of digital has increased over the last few years, especially accelerated by the pandemic, it is unlikely that the ratios will inverse entirely. Print still holds a considerable weightage in may brands’ marketing media mix.

Aanchal Kohli believes that the print industry can reclaim its lost lustre.

“Keeping the external challenges and issues aside, and being tactfully prepared for the various factors that could affect the print industry, there is still hope for it to bounce back like the earlier times. There is a need to create brand awareness and understand consumer behaviour to be able to create profitable demand and supply. Ad spends are only going to increase and we can see the number of pages increasing to pre-pandemic times. There is still a strata of the society that wants to read newspapers and if the print industry continues to meet their needs and provide for them, it will soon reclaim its name,” she concludes.


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