2_SMP14.pdf

STRATEGIC MEDIA PLANNING

GROUP - 2

Archana M

Jaikesh K

Jaishankar K

Kamala Priyadarsini S

Vasanth V

Vivek Ganesh

01 April 2014 Amrita School of Business

Coimbatore

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TABLE OF CONTENTS

Executive Summary ...................................................................................... 1

CHAPTER-1 ................................................................................................... 2

How are Newspaper’s in India faring compared to west? ........................... 2

Newspapers in Western World ....................................................................................................... 2

Newspapers in India ......................................................................................................................... 3

Key Driving Reasons......................................................................................................................... 4

Special Reports on the News Industry .......................................................................................... 6

CHAPTER-2 ................................................................................................... 7

Is Newspaper Market Growing In India? ..................................................... 7

Reasons for Growth .......................................................................................................................... 9

CHAPTER-3 ................................................................................................. 12

How have the Newspapers adopted to various threats – digital, television

etc.? ............................................................................................................ 12

At United States of America .......................................................................................................... 13

At Australia ...................................................................................................................................... 14

At China ............................................................................................................................................ 14

At Japan ........................................................................................................................................... 15

CONCLUSION .............................................................................................. 15

REFERENCES ............................................................................................... 17

LIST OF FIGURES

Figure 1 Comparison of Print Circulation .......................................................................................... 3

Figure 2 Comparison of Circulation - 2 .............................................................................................. 5

Figure 3 Domination of Asia in Circulation ........................................................................................ 5

Figure 4 Indian Newspaper Market - Circulation, Readership, Revenue ...................................... 8

Figure 5 Certified Circulation of Newspaper’s .................................................................................. 8

Figure 6 Growth Rate of Circulation .................................................................................................. 9

Figure 7 Readers per Copy on 2012 vs 2006 ................................................................................... 9

Figure 8 Per Capita GDP ($) .............................................................................................................. 10

Figure 9 US Advertising Revenues Print Vs Online ........................................................................ 13

Figure 10 US Readership by Ages ................................................................................................... 13

Figure 11 Circulation Revenue in US ............................................................................................... 14

LIST OF TABLES

Table 1 Growth of Newspapers .......................................................................................................... 8

Table 2 Female Literacy Comparison ............................................................................................... 11

Table 3 Indian Advertising Revenue by Media Category .............................................................. 12

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Executive Summary

Newspaper is one of the Mass media categories where any company can reach out

to a common man. But Newspapers are slowly losing its pace and energy to Online

spaces. Many Newspaper corporations across countries are affected by more

Internet penetration.

India? Happy No!

India has seen an increase in the circulation of printed issues though many

developed nations has seen a decrease during last decade. One attributed reason by

them is increasing trend in Digital Media. But most (in fact all) nations are spending

most of its media spend in Newspapers (after TV). Revenue generated from

newspapers through Advertisements is seeing a constant decline in recent years. But

in India, there was an increase in both (no. of circulations as well as

Advertisements).

Possible reasons for increase in newspapers circulation in India is

� Increase in Literature

� Increase in Disposable income

� Decrease in Readers/Newspaper (More people buy newspaper)

In India, penetration of newspapers is less when compared to Western nations. The

revenue through Newspaper is also considerably less when compared to US which

are around $140+ Billion whereas in India it’s less than $6 Billion.

India’s internet penetration is growing at a faster pace but the impact isn’t huge yet.

According to E-marketer, 20% of people are interested to read

newspapers/magazines in their gadgets rather than Printed copy and at the same

time many prefer playing games/entertainment purposes.

So, is this the start for decline in Print?

May be, but, Indian industry have an advantage when compared to much more

mature markets. That is comfort of “Time”. In mature markets, well settled players

are looking to gain more cyber space for more than 10 years but we have time to

create and establish a strategy to capture Digital space. The organisations just need

to be innovative.

Hope India continues its growth in print and at the same time let it increase its

online presence to stand-on par with global players.

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CHAPTER-1

How are Newspaper’s in India faring compared to west?

Source: World press trends, Zenith Optimedia

As in many other fields, the Indian experience does not quite fit into trends across

the world. The case of newspapers is one that illustrates this general statement. It

goes without saying that the growth of newspapers in India, especially in recent

years, is directly related to the growth witnessed by the Indian economy.

Newspapers in Western World

Newspapers are widely held to be in serious crisis. In the Western world, the rise of

online news and new multiple sources of news and information have changed the

economics of newspaper publishing.

The crisis has been felt most painfully in the United States, where even as online

audiences grow, print circulation continues to decline. When circulation and ad

revenue are combined, the U.S. newspaper industry has shrunk 43 per cent since

2000, while it’s estimated that the number of journalists in daily newspapers has

fallen from 56,000 to 40,000.

The digital revolution is undermining the business models that see consumers pay

for print news, with a younger generation accustomed to the idea that news is free.

Newspapers are struggling to try and find a way to make money online, constrained

by the lack of a viable revenue model. To make matters worse, newspapers make

only about a tenth from their print readers as what they make from digital readers.

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According to the Newspaper Association of America, a print reader is worth an

average of US$539 in advertising alone, while an average online reader is worth

US$26.

Figure 1 Comparison of Print Circulation

Source: WAN-IFRA ITALIA June 2013

Newspapers in India

In India, newspaper markets are growing strongly, fuelled by robust economic

growth and demand from an emerging urban and literate middle class that is

enjoying higher incomes and rising standards of living.

About 90 percent of print readers in India consume content in Hindi and other

regional languages. The popularity of Local Languages is the Reason why print is

less affected by online in India than elsewhere.

In India, the growth of a popular vernacular press is skewed to entertainment,

scandal, gossip and sports with some coverage of public affairs; which while not

being a perfect development, supplements what the Indian media system has

offered to the country’s citizens in the past.

The newspaper industry in India is doing well as compared to that in the West.

While the circulation of paid dailies in the Western markets has been de-growing

over the last 5 years — US (-12.5%), Canada (-18%), Germany (-10%) and UK (-

13%) — the same has been growing in India (+ 11%).

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Key Driving Reasons

The five key reasons driving this phenomenon:

1. The penetration of digital media in India is less than in the West.

While markets like US, Canada, Germany and UK have about 96% of the population

using the Internet, only about 20 to 30% of the people in India actively surf the

Internet.

2. Newspapers still have a large potential for further penetration

In India, circulation of newspapers is about 143 copies per thousand of adult

population. For Singapore this number is 256, and for Hong Kong it is 355. This

shows that there is significant room for further penetration of newspapers in India.

Also, the literacy rate in India has improved over the last decade.

3. India has a large number of regional newspapers.

These papers have two major advantages: one is the ability to connect with the non-

English speaking population, and secondly, the ability to customize news at the last

mile (for example, district-level news). Based on these two factors regional

newspapers continue to make a large contribution in sustaining the Indian

newspaper industry

4. Newspaper advertising has also seen significant growth in India over

the last five years.

While newspaper advertising in the western markets has de-grown by 12 to 50%

over the last five years, in India it has grown by over 50%. This creates a positive

cycle — as more advertising comes into newspapers, publishing companies can

invest more into the product; this helps growth in circulation and readership and

that, in turn, goes back to fulfilling the needs of advertisers. Print still remains the

largest contributor (41%) to the advertising market in India while digital contributes

about 10%.

5. Newspapers continue to command the highest credibility in terms of

content as well as advertising.

A McKinsey research showed that while 66% of respondents consider newspaper

advertising to be ‘inspiring confidence and informative’, only a mere 12% thought so

of ads on the Internet.

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Figure 2 Comparison of Circulation - 2


Figure 3 Domination of Asia in Circulation


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Special Reports on the News Industry

The Economist sizes up the newspaper business worldwide and notes that not all

newspapers are in crisis like those in the U.S. The hottest newspaper market is

India, which overtook China three years ago to become the leader in paid circulation

with 110 million copies sold each day, the Economist reports, using World

Association of Newspapers figures.

According to the Indian Media and Entertainment Industry Report 2011 by the

Federation of Indian Chambers of Commerce and Industry, a trade body, and KPMG,

a consultancy, India is one of the largest newspaper markets with more than 107

million copies circulated daily, more than China, and accounting for more than 20

per cent of all dailies across the world.

Nielsen, Research Fellow at the Reuters Institute for the Study of Journalism at the

University of Oxford, says that newspapers also become more attractive for

advertisers who see a growing customer base for people who have been lifted out of

Poverty and deprivation and who suddenly have money to spend.

“So those are the main drivers in countries like India. So its urbanization, growing

literacy, economic growth within the context of a democracy in which it is a

meaningful thing for the average citizen to try to stay informed about public affairs.”

Robert Picard, Director of Research at the Reuters Institute for the Study of

Journalism at the University of Oxford, United Kingdom points out that India has put

a lot of effort into boosting its literacy rate. The 2011 national census data showed

an adult literacy level of 74 per cent, up nine per cent from the last census a decade

ago.

“As soon as a person becomes literate, what they get is a newspaper – even before

they buy a phone, it’s the first luxury a man affords”

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CHAPTER-2

Is Newspaper Market Growing In India?

In India, Newspaper market are growing strongly fuelled by economic growth and

demand from an emerging urban and literate middle class that is enjoying higher

incomes and rising standards of living.

Here is what the leading dailies had said about the Indian Newspapers Industry!

Quoted on 27 May 2009,

“Newspaper circulation up 1.3% in 2008 in India despite slowdown”

“… circulation gains were not only occurring in the emerging markets of China and

India, and 38 per cent of countries reported gains in 2008, and 58 per cent saw

circulation increasing over five years.”

Quoted on 3 September 2010,

“Where print makes profits”

“People like to read in their mother tongue. The circulation of Hindi papers rose from

less than 8m in the early 1990s to more than 25m last year.”

Quoted on 1 August 2011,

“Newspapers: Why India’s newspaper industry is booming”

“With reference to KPM, India’s Newspaper growth in 2011 has grown by 2/3rd from

2005. This industry values $4.37 Billion in 2010 whereas in 2005 it was $2.64

Billion.”

Quoted on 3 June 2013,

“Booming market for Newspapers”

“In the 7 year period from 2006 to 2012 the total number of paid copies certified by

the ABC, rose by over 10 million to hit 48.29 million. If you take unpaid circulation

into account then the total goes well over 100 million copies making India the

second largest newspaper market in the world after China.”

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Figure 4 Indian Newspaper Market - Circulation, Readership, Revenue1

Table 1 Growth of Newspapers2

Growth of Newspapers on 2012

Compared to 2006

Circulation 25.66%

Readership 14.86%

Revenue 64.46%

Figure 5 Certified Circulation of Newspaper’s3

1 http://www.business-standard.com/content/general_pdf/060413_02.pdf

2 Team member compilation based on data arrived from Footnote(1)


48

38

0

20

40

60

2012 2006

Mil

lio

ns

Circulation

340

296

260

280

300

320

340

360

2012 2006

Mil

lio

ns

Readership

211

128

0

50

100

150

200

250

2012 2006

Bil

lio

ns

Revenue

2.6

8.7

10.3

1.5

3.24.4

2.5 1.62.7

9

15

2

45.4

3.9 3.7

0

2

4

6

8

10

12

14

16

Certified Circulation (In Millions)

2006 2012

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Figure 6 Growth Rate of Circulation4

Figure 7 Readers per Copy on 2012 vs 20065

Regional language newspapers are seeing phenomenal growth during 2006 to 2012.

Reasons for Growth

Readers/Copy have declined and the growth of circulation increased which indicates

1. Rising in Purchase Power/ Increase in level of Disposable income

2. Price Wars (Language Papers are little bit costlier than English)

3. Growth of Indian middle class

4. Increase in Literacy level

5. Increase in Female readers

6. Regional supplements attract lot of attention as India has different languages



3.85% 3.45%

45.63%33.33%

25.00% 22.73%

56.00%

131.25%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

Growth Rate of Circulation

2006 2012

5.33% 5.41%

-20.83%-15.24%

-5.00% -4.82%

-25.00%

-39.82%-50.00%

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

Readers/Copy

2012

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On April 19, 2012 said,

“India no.3 in Purchasing Power Parity”

USA : 15.1 ($ Trillion)

China : 11.3 ($ Trillion)

India : 4.5 ($ Trillion)

Though India is ahead of Japan in Purchasing Power, its disposable is well below the

developed nations.

Disposable incomes of

US : $ 48,387

China : $ 8,382

Japan : $ 34,470

India : $ 3,694

But India’s per capita GDP is on steady growth for more than a decade.

Figure 8 Per Capita GDP ($)6

Indian Literacy has grown by 9% on an average to 74.04% in 2011 when compared

to 65.38% in 2001. Female literacy is increasing and Bihar one of the last in 2011

census has shown a major growth in last ten years which is 35.74%. UP, Arunachal

Pradesh and Meghalaya has shown a growth over 20% in last decade. Delhi, Kerala

has shown a least growth of 3%.

Bihar’s Growth : 35.74% (Highest by any state in last decade)

6 www.tradingeconomics.com/india/gdp-per-capita-ppp

2,0742,406

2,672

3,1223,341

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2005 2007 2009 2011 2013

Per Capita GDP (in $)

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UP, Arunachal Pradesh : 20% Growth

Kerala, Delhi : 3% Growth (Least)

Table 2 Female Literacy Comparison7

State 2001 2011 Growth

Daman & Diu 40.23% 79.60% 97.86%

Chhattisgarh 33.12% 60.60% 82.97%

Karnataka 38.87% 68.10% 75.20%

Sikkim 43.85% 76.40% 74.23%

West Bengal 42.22% 71.20% 68.64%

Kerala 56.87% 92.00% 61.77%

Delhi 51.85% 80.90% 56.03%

Assam 43.53% 67.30% 54.61%

Nagaland 86.75% 76.70% -11.59%

D&N Haveli 76.47% 65.90% -13.82%

Jammu & Kashmir 67.42% 58.00% -13.97%

Rajasthan 63.36% 52.70% -16.82%

Madhya Pradesh 87.72% 60.00% -31.60%

Increase in Female readers in certain states attracts more publishers and

advertisers.

The above are some of the important reasons to quote why Indian Newspapers are

still growing when compared to other developed economies.

7 http://www.indiaonlinepages.com/population/literacy-rate-in-india.html

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CHAPTER-3

How have the Newspapers adopted to various threats – digital,

television etc.?

On June 21, 2011 article,

“Can Indian newspapers survive the Net?”

“Extreme dependence on advertisements made American newspapers an easy target

for the internet”

“Revenue from advertising in US is in proportion of 73:27”

“India’s revenue from advertising is in proportion of 80:20 and India is similar to US

market”

On 29 October 2012 mentioned,

“Adoption of smart devices in India is still relatively low”

“Despite the adoption of newer technologies, India still remains a mass media-

dominated landscape, with television and newspapers remaining very popular”

“21.5% of tablet users reported that they read magazines and newspapers less after

purchasing the device, compared with 20% of PC users and 18.3% of smartphone

users”

After Purchase of Less Activity on Desktop/Laptop Smartphone Tablet Newspaper (In Print) 20.00% 18.30% 21.50% Magazine (In Print) 25.20% 18.80% 27.50%

Table 3 Indian Advertising Revenue by Media Category8

Media 2012(Rs. Million)

2013(Rs. Million)

% Change Market Share

TV 141,519 150,281 6.19% 41.20%

Newspapers 131,137 142,435 8.62% 39.05%

Internet 20,576 27,000 31.22% 7.40%

OOH 17,366 18,759 8.02% 5.14%

Radio 12,723 13,309 4.61% 3.65%

Magazines 8,162 8,506 4.21% 2.33%

Cinema 2,111 2,470 17.01% 0.68%

Grand Total 335,606 364,773 8.69% 1

8 http://www.mxmindia.com/2012/12/india-ad-revenues-grew-2-6-in-2012-magna-global-forecast-for-2013-8-

7/

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The global advertising market reached $495 billion this year, up +3.8% on 2011.

The US remains the largest market with $153 billion in advertising revenues. Japan,

China, Germany and the UK complete the Top 5.

At United States of America

US which has 78% of Population as its Internet users have a drastic reduction in

revenue through Newspaper print but digital is not so rising.

Figure 9 US Advertising Revenues Print Vs Online9

With the advent of technology in US, readership through Print has fallen.

Figure 10 US Readership by Ages10

Despite all this Circulation revenue is stable in US.

9 stateofthemedia.org/2013/newspapers-stabilizing-but-still-threatened/newspapers-by-the-numbers/

10 Team member compilation of data based on footnote[9]

45 47 47 4742

35

25 23 21 191 2 2 3 3 3 3 3 3 3

0

10

20

30

40

50

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Bil

lio

ns

US Advertising Revenues

Print Vs Online

Print Online

0

20

40

60

80

19992000200120022003200420052006200720082009201020112012

US Readership By Ages

18-24 25-34 35-44 45-54 55-64 65+

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Figure 11 Circulation Revenue in US11

Even though Digital Media is booming fast, the Print Media cannot be eradicated

completely atleast for a decade or so.

At Australia12

Newscorp Australia on 17 March 2014 released,

� Total newspaper media audience increases 1.2% based on latest Emma

(Enhanced Media Metrics Australia) data.

� Total readership of newspaper media is 16.1 million people a month,

representing 92% of the population aged 14 and over.

� In addition, print readership still accounts for a significant proportion of total

consumption of newspaper media at 14.7 million, or 84% of the population

aged 14 and over.

� Compared with other media, newspapers still offer a compelling story for

advertisers. Brands attract 16 million readers every month.

� Regional newspapers alone are purchased by three million Australians, and

community papers have an audience of 4.8 million.

� Emma data reveals that 78% of main grocery buyers consume newspaper

media, and shoppers who read newspapers spend more on groceries than

non-newspaper readers.

� Heavy newspaper readers spend an average of $144 a week compared to

non-newspaper readers at $137.

At China13

Advertising on Media is broken down to

Newspaper : 60.48 Billion Yuan (2011)

Magazine : 4.425 Billion Yuan (2011)

11

Team member compilation based on Footnote[9] 12

IFABC-OUTPUT-31-Dec.pdf 13

IFABC-OUTPUT-31-Dec.pdf

0

5,000,000

10,000,000

15,000,000

Circulation Revenue(US)

Weekday Sunday Total

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On-Line : 12.08 Billion Yuan (2011)

Growth of Media Category in China during 2011 when compared to 2010

Digital media : 48.9%

Newspaper : 3%

Magazine : 7%

TV : 11.5%

Radio : 25%

Outdoor : 22.1%

At Japan14

Advertising Spend from Jan 2011 to Dec 2011

Newspaper : 599,000

Magazine : 254,200

Radio : 124,700

TV : 1,723,700

Total : 2,701,600

Though many countries spend their most of advertising on Print media either

Newspaper or Magazine, yet digital medium is upcoming faster and it’s growing at a

faster pace. Lot of corporations are trying to capture digital media like Websites,

Facebook pages, LinkedIn pages, Twitter and many more. Companies are looking to

attract many of youths in digital space and make them their customers.

In India, though digital media is in rise, its Internet penetration is still not yet

reached a stage where it would be called as a “threat” for newspapers/magazines.

Nevertheless, that doesn’t mean you need to wait till flood comes. Corporations

must slowly transform their targeting to digital spaces.

CONCLUSION

O’Reilly pointed out merely joining the chorus that the future is online, online,

online; almost to the exclusion of everything else is a mistake. This oversimplifies a

rather complex issue. Newspapers continue to be a global mass media to be

reckoned with, achieving a global average reach of over one third of the world’s

population. Even in mature markets where circulation is declining, the reach remains

14

IFABC-OUTPUT-31-Dec.pdf

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high.15 Australia is one of the top 50 countries in World where Internet penetration is

more than 70% but still the Newspaper circulation is stable and in fact it is rising.

Even in US the circulation remains stable but ad revenues saw a decline. Level of

income determines the purchasing behaviour of newspaper. India and China are two

great examples for that and let’s hope atleast there is a good rise in GDP

everywhere, so that people purchase more newspapers and there always be “Future

for Newspapers.”

15

http://www.business-standard.com/article/companies/newspaper-circulation-up-1-3-in-2008-despite-slowdown-

109052700195_1.html

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REFERENCES

[1] The Economist, 2011, “Special Report: The News Industry” available at

http://www.economist.com/node/18904136 accessed 8 April 2012

[2] Paolo Hooke, University of Technology Sydney, 2012 “Why newspaper markets

are growing in China and India, while they decline in the US and UK” available at

http://ejournalist.com.au/v12n1/Hooke.pdf

[3] WAN-IFRA ITALIA June 2013 “DIGITAL MEDIA & WORLD PRESS TRENDS 2013”

available at

http://www.ediland.it/new/documenti/WANIFRAItalia2013_02_peyregne.pdf

[4] “Indian audiences are open to a combined ‘print-digital’ model of newspapers”

available at http://www.impactonnet.com/ accessed 11 October 2013

[5] Print special, August 2013 “Special Report – Emerging still”

http://www.afaqs.com/all/news/misc/38475_Print_Special.pdf

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