Falling advertising revenue, ethically suspect advertorial initiatives and rapidly changing reader tastes have combined to rock the Indian newspaper industry.
A mid-year economic recovery has seen some of the gloom abate, but the mood in the Indian media industry, heading into the festive season of Dassehra and Diwali, is not particularly buoyant.
With forecasts indicating a sharp slowdown in advertising spending, the chief executive of Bennett Coleman and Co Ltd (BCCL) – India’s largest media group with interests in print, TV, radio, online and outdoor advertising – wrote to his staff in March 2009, indicating that the crisis was unlike anything he had “seen in his working life”. The chief editor and chief executive officer of The Indian Express, in a similar moment of revelation, described the slowdown as a crisis with no end in sight. Around the same time, HT Media, publishers of the second-largest circulated English newspaper, Hindustan Times (HT), informed staffers that salaries would remain “unchanged” into the foreseeable future.
By mid-year, forecasts were even more downbeat. And as summer wore on and the fabled Indian monsoon remained elusive, drought conditions were declared in much of the country, engendering yet more anxiety. The expected shrinkage of demand in the rural sector could seriously hit ad spending by consumer goods majors.
Salary cuts and austerity have become the norm in the media industry. And for the first time since the media boom began, there is an imminent prospect that the newspaper industry could take a hit.
The print media has long held its share in total advertising spending, defying predictions that its fortunes would plummet as a consequence of the growth of cable and satellite TV and the internet. But today’s evidence indicates this situation could change: that the share of print in total ad-spend could fall below the 47 per cent level it has been at for almost two decades. Print could soon be getting a smaller share of a pie that is growing at a much slower rate than before.
Though unlikely to be of immediate practical consequence or profit, it may be time to revisit some of the strategic choices the industry made over the last two decades. For starters, the industry needs to ask whether it did the right thing by itself and its customers from about the mid-1990s, by increasingly tying its commercial success to advertising rather than circulation (and derivatively, quality news and content).
From about 1997, when 24-hour news channels began sprouting all over the country, the print media lost its status as the primary news source for the majority of consumers. But circulation levels still kept increasing, because of rising literacy and social mobility. Again, the print media retained relevance as a source of in-depth information. The 24-hour news channel, with its bite-sized coverage, only whetted the appetite; it took the unhurried study of the print media to fully satisfy the need to know.
In its rush to rake in the advertising by emulating the TV news-bite, the print media disregarded this inherent strength. The trend was set in 1994 by BCCL – publishers of The Times of India (ToI) – when it slashed the price of its flagship paper in Delhi, forcing the market-leading HT to follow suit.
With its near-monopoly in the commercial metropolis of Mumbai, by 1994 the ToI had an estimated ad ratio – measured as the proportion of total printed area devoted to ads – of 55 per cent. In comparison, HT in Delhi and The Hindu in Chennai enjoyed much more modest ratios in the lower 40s. This initial advantage endowed the ToI with the confidence to launch a price war and stay the course better than the competition. Eventually, HT was driven to the wall, suffering steadily dropping profits and going into a loss for two successive years, before it sued for peace.
A dramatic change of policy was effected in 2004, allowing foreign direct investment in the newspaper industry. This was in part because HT, after standing firm in opposing foreign investment along with two other majors, ToI and The Hindu, switched loyalties after the beating it received in the price wars. In March 2005, HT entered into a compact with the ToI, raising cover prices and ad rates in concert.
The years that followed may have seen some semblance of sanity return to newspaper content. But the editorial function has continued to suffer serious erosion.
In March 2003, the ToI announced a new initiative – “Medianet” – in an effort to stay current with journalistic practices in rapidly changing times. Medianet was, in the words of the ToI management, part of their “desire to drive the market, to constantly break new ground”.
The deficiency of traditional news-gathering, the ToI explained, was apparent in new areas of audience interest: “lifestyle, fashion, entertainment, events, product launches, social personalities and city happenings”. This was, in part, because public relations agencies, which had a much more sensitive feel for the pulse in these areas, had always had a rather uneasy interface with journalism.
Subtlety aside, this was a reference to the pervasive journalistic practice of accepting – and even actively soliciting – various forms of gratification for news and editorial coverage that might be of material benefit to particular individuals or entities. Medianet, the ToI professed, was curbing this corruption of the trade by institutionalising it. Objectivity and integrity of editorial content would no longer be at risk from the susceptibility of individual journalists. The organisation itself would bear the onus of carrying content that was paid for, though only with explicit acknowledgment.
After making “infotainment” a staple of the media industry, the ToI fostered a new hybrid entity called “advertorial”, which would allow sponsors to feature stories of special interest in its news columns. Needless to say, the early assurance that this operational philosophy would respect traditional walls of distinction between advertisements and editorial has not quite been fulfilled.
Two years later, the ToI introduced another innovation, called “private treaties”. It involved the ToI group’s acquisition of shares in enterprises in exchange for advertising space. When the concerned enterprise grew to a level where it could conceivably go public, the media company that had freely advertised its merits would cash in.
The ToI was the pathfinder and most media enterprises, including the broadcast companies, have eagerly followed. Private treaties are now accepted practice for numerous media groups.
Meanwhile, the readership and audience measurement process has suffered enormous pressures from interested media groups. The National Readership Study (NRS), promoted by India’s main newspaper industry lobby, was discontinued in 2006 after serious discrepancies and inconsistencies in its findings. The Indian Readership Survey (IRS), a creation of the advertising industry, continues on an annual basis, though its findings leave ample room for interpretations of convenience.
The Broadcast Audience Research Council was set up in late 2007 as a joint venture of the industry and the advertising agencies. It is expected to begin its work soon, after a long and arduous process of negotiating appropriate methodologies. Few seem to have any regrets about the older system of TV ratings – always prone to erupt in unseemly controversies – fading away into history.
Media content, meanwhile, has mutated to accommodate the concerns of the upper demographic strata. According to a recent survey, TV news channels devoted close to a third of their air-time (exclusive of ads) to stories on crime. Sports was a distant second, with just over 13 per cent of total air-time, followed closely by politics and entertainment news. Bringing up the tail-end, though with a significant share, is astrology, with over three per cent.
A roughly similar order of priorities is evident in the print media which, in the days before TV news channels, devoted perhaps 40 per cent of front-page space to politics. That has come down to just under a quarter of the total for the Englishlanguage press. A close second is crime, with 21 per cent of front-page space. The economy, sports and entertainment all figure in the middle single-digit range in terms of the proportion of front-page space claimed in the English-language press.
With all these changes, the print media today faces a dearth of options. After the progressive devaluation of the editorial function and news gathering, quality of content does not justify charging a price for access. The option currently being explored as a last-ditch survival bid by the global newspaper majors does not seem available to their Indian counterparts. An alternative scenario, of a brutal bout of blood-letting and the survival only of the fittest, seems ever more likely. Diversity and consumer choice look the likely victims of the current downturn in media fortunes.
Sukumar Muralidharan is former deputy editor of Frontline magazine and the South Asia coordinator for the International Federation of Journalists
Ray Hirst is an artist with The Advertiser
