News Corporation’s launch of a tablet paper is interesting and frustrating. It is interesting because it is another attempt by a company in a mature market to find a way of making money from new media. It is frustrating because there has not been a single scintillating new media story coming out of the publishing industry in India.
Four years ago when I did some work in the area, newspapers in the US and Europe were going down like ninepins. Every major publisher was losing audiences to the internet. Indian publishers, however, were in an enviable position. Newspaper circulation, readership and revenue figures were showing record growth.
On the other hand, internet and broadband penetration in India was still low. So Indian publishers had the luxury of both time and money to experiment and build businesses around the net, mobile phones and other new media.
They have, however, done little. Most newspaper websites are supplements or add-ons to the main brand. Going by comScore data, Yahoo! News is the number one news site out of India, based on unique visitors. There are some very big Indian newspaper brands in the list, but for most the net is not a focus area. Many of them, except perhaps The Times Group, get just a sliver of their revenues from new media.
Now it looks like both the luxuries, time and money, will soon disappear. Indian publishers, too, could be looking at distress sales, a la the US, unless they really hurry up. There are three reasons for this doomsday prophecy.
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One, going by the Telecom Regulatory Authority of India (Trai) data, more than 56 per cent of the 83 million internet users in India are now on broadband. This number is growing year-on-year at between 30 and 40 per cent since private operators offer broadband connections at great prices. That is not all. Assuming the legal imbroglio over 3G licences gets sorted, mobile broadband will unleash a sea of new users into the market. So new media penetration growth is no longer about the future — it is happening.
Two, readership numbers in the metros suggest that not enough young people are reading newspapers. The ones who are reading are spending less time going through them. A bulk of real growth in the number of new readers and time spent is coming from non-metro India. Expect them to mimic the metro trend, as the net and other devices penetrate faster.
Three, the whole new media game is one long, tedious affair. The New York Times, The Guardian or The Wall Street Journal started it more than a decade back; they are still not making money online even if they have got an audience there. In fact, most online operations of major newspaper groups across the world are subsidised by their shrinking print ones.
You could argue that India remains among the world’s largest and fastest growing newspaper markets. So it would be silly to lose focus. However, some investment and time have to shift to new media and soon, if future revenue streams are to be protected. But why is it not happening?
One part of the reason is that the fantastic growth in print has left very little time to focus on anything else.
The other reason, I suspect, is the fear of the unknown. This whole notion of chasing a few hundred rupees per thousand readers (CPMs) instead of a full-page colour advertisement worth lakhs of rupees is beyond the realm of the thinking of most newspaper publishers. They are just used to 25 to 30 per cent operating margins and anything else seems like too much effort.
Also, the feudal structures under which the Indian publishing companies operate hardly allow independent CEOs to experiment and build dotcoms that could deliver. Some of this is also true for European and American publishing houses. Many are owned by strong-willed media barons who like to run their empires their way.
But when the net hit them, it hit them so hard that many newspaper titles were sold at bargain prices or to investors who knew nothing about the business. That should have been inspiration enough for Indian newspapermen to hurry up. It clearly hasn’t been.