The pandemic has been a stern lesson for the Indian newspaper industry, which by and large thinks it is an exception to media trends that predict its demise sooner than later. According to IppStar estimates, it lost about 40% of its circulation and ad revenues in the pandemic year to 31 March 2021. But, on the other hand, Crisil says that in the media and entertainment sector, which includes television, print, digital, film, outdoor, and radio, there was only a 26% decline FY21 from Rs 146,500 crore to Rs 107,700 crore. (Approximately US$ 19.8 billion to US$ 14.5 billion).
Crisil expects or forecasts the media and entertainment sectors to bounce back by 27% in the current FY 22 to Rs. 137,000 crore (US$ 18.5 billion) and projects further gains for television and digital at the expense of print and outdoor, and radio. If print’s market share is 20% in FY22, as Crisil projects, it will generate subscription and ad revenues of Rs 27,400 till March. Although this is 6.5% lower than print media revenues in FY19-20 of Rs 29,300 crore, it still looks like a good recovery and seems to be borne out by recent reports from the market.
Recent reports from some leading newspapers indicate that August 2021 was profitable in terms of circulation and ad revenue. Although the pandemic has put some fear into publishers’ minds and pushed a few into accelerating their efforts in monetizing web traffic, print advertising has come back by and large. As a result, premiums for ad positions are hardening. Tempered by realism based on last year’s disappointing festival season, expectations of an advertising bump for this Diwali are nevertheless optimistic.
Costs have been trimmed to maintain profitability. Since there is no real need to print extra copies that were distributed free at airports or schools and given away to tempt potential subscribers, the savings in production and consumables continue. Increasingly some of the larger organizations are streamlining their business and technology functions by outsourcing these. Editorial personnel are already on contract, and the day is not far off when ad sales and newspaper page-making will also be outsourced.
The longer-term outlook of the news media is still positive, with consumption continuing to drive GDP growth, although there is some hope of infrastructure spending in the coming year. However, while Indian regulations permit cross-ownership of radio and television, these channels have not been as profitable for media owners as print advertising which is their cash cow.
Although there have been few innovations beyond cost-cutting at every opportunity, Indian publishers do see their future as omnichannel platforms with digital subscriptions and other innovations taking hold gradually. The Indian news media has its own pace and dynamic mainly driven by the readership growth and consumption headroom. Therefore, it is reasonable to expect a natural increase in products, circulation, and ad revenue in FY 2022-23.
