Representatives from the Indian newspaper industry discussed the viability of a move towards a more realistic cover price for newspapers at the Third Annual South Asia Newspaper Conference, organised by the International Newsmedia Marketing Association here on Thursday.
Speaking at the conference, Managing Director of The Hindu N. Murali said an attempt should be made to correct somewhat the highly skewed price structure of newspapers. “The print media, which has been used to 20 per cent growth in advertising levels, can now expect it to grow at only single-digit figures. As long as advertisers were willing to pay and till the boom period lasted, we were getting by. But now, a serious wake-up call is needed.”
“What kind of industry can have a type of revenue or pricing model where the cover price does not cover even part of its newsprint costs?” asked Mr. Murali. “The cover price of newspapers should be raised by 50 paise every six months so that newspapers cost between six-seven rupees in two-three years.”
With reference to the online model of free news content, Mr. Murali said it had not proved viable.
Stating that this was a defining moment for the newspaper industry, Mr. Murali said: “Just as we have been witness to the commodity price bubble and asset price bubble in the last five-six years, the newspaper industry too has been building a bubble during the boom period which is ready to burst. We have been chasing artificial numbers in circulation based on bad economic fundamentals,” he said.
He criticised the Audit Bureau of Circulations for certifying artificial circulation numbers of newspapers which had poor readership.
Ravi Dhariwal of The Times of India said all newspapers had profited from low cover prices which resulted in increased penetration. “Earlier, advertising was paying for increasing circulation, but now newspapers are experiencing diminishing returns. It is time for experimenting with the cover price and taking slow and small steps towards increasing it.”
Sharing his experience of experimenting with the cover price, ABP Pvt. Limited Managing Director D. D. Purkayastha said: “Our market share remained the same despite increasing the cover price of The Telegraph twice.”
Presenting a different take on the situation, HT-Media Limited CEO Rajiv Verma said: “We need a robust business model in which we can maintain growth in the industry and also see profits. There is a great deal of price elasticity among consumers in the industry. When we hiked our cover price by 50 paise, there was a 10 per cent drop in circulation.”
Editor and CEO of Jagran Prakashan Ltd., Sanjay Gupta, said: “By hiking the cover price, newspapers become uncompetitive, circulation falls and advertising begins to desert the newspaper.”
Mid-Day Multimedia Ltd. Managing Director Tariq Ansari said the most important thing for readers was the credibility of the newspaper. “Advertising has started entering the editorial domain and can destroy the credibility. Therefore, it is important to hike circulation prices.”
