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To this add cost increases of over 10 per cent every year and ad growth crawling at 7 per cent. For a market used to 10 -15 per cent growth rates, this is a "double whammy," says Ashish Bagga, group CEO, India Today Group, the publisher of Business Today and Harvard Business Review, among other titles. One estimate puts the top ten business magazines at a total of about Rs 400 crore in topline. "Not a single brand has gone beyond the Rs -50 crore mark," says one insider. Some have been around for more than 25 years.
Pavan Varshnei, former president and publisher, Fortune India, doesn't agree. He points out that the market is expanding, though not as fast as TV. "If that wasn't so, three new brands wouldn't have been launched in the last five years," says he. Outlook Business, Forbes India (by Network18) and Fortune India (by ABP) came up in that period. On readership, business magazines have done very well holding on to a one per cent share of the total readership pie in the last five years. (See charts)
To be fair, in a booming economy, business media across TV, print and online has underperformed. Business magazines, which form a sliver of it, too, have simply not grown as fast as genres such as technology or lifestyle. Competition, fragmentation and structural problems have been a drag.
Going weekly
There are dozens of newspaper, television and online brands giving business news by the minute. This is a market in the throes of rapid transition, the reason for Businessworld's decision. "Over the next 7-8 years, readers will choose to read specific magazines because they have developed a reputation for expertise in specific areas, whether it is the technology industry, financial markets or healthcare industry," says Prosenjit Datta, editor, Businessworld.
While Businessworld's strength lay in spotting and analysing long-term trends and events, its frequency meant it was stuck competing with the fortnightlies and the monthlies for analysis and with the dailies and the channels for being the first to break news. Unlike popular perception, the move doesn't cut its costs by half, as the number of pages for the fortnightly will be higher. Therefore, printing, content and other costs will remain roughly the same. What the magazine hopes to do is improve the yields it gets per ad page by about 25-35 per cent by emphasising its clear positioning, says one insider.
In many ways Businessworld's journey from being a fortnightly to a weekly and back is a good way to understand this market. In 1998, a few months after joining Businessworld, this writer along with a colleague was assigned to help a team at McKinsey figure out what to do with the brand. In the pre-Internet, pre-24-hour business television era, the leading business fortnightlies �" Business India, Business Today and Businessworld�" looked and read like each other. To capture the exciting times the Indian economy was going through, Businessworld decided to become the weekly 'magazine of the new economy' in 1999. It worked.
By 2005, however, the market had started changing. Business channels (CNBC-TV18 et al), newspapers and online brands such as moneycontrol.com took off, splintering audiences. As a result, the distracted advertiser started pushing down the rates. Anita Nayyar, CEO, Havas Media Group, India and South Asia, explains: "While magazines offer a more focussed, engaging and relevant environment, they are third in the row (after television and newspapers) for budget allocation. Also, reading time, specifically on magazines, has gone down."
This brings us to the other reason for the slow growth of business magazines �" structural problems and cussed publishers. "Magazines have been completely boxed in for the last two decades. Newspapers with their wider reach and accessible cover prices had set the rules of the game. And magazines have made very little effort to change them," says Indrajit Gupta, editor, Forbes India.
Take IRS (the Indian Readership Survey), every magazine publisher's bugbear. It is designed for newspapers with their large print runs. It captures five measures of quality such as frequency, recency and so on. However, it is unable to carry too many "quality of reading" attributes, which are critical for magazines, as it increases the interview time. "Maybe IRS doesn't do justice to premium (specialised) publications. This is true globally because response rates are low within that target group," says Suresh Nimbalkar, senior vice-president, Hansa Research, a market research agency. Hansa does the readership survey on behalf of the Media Research Users Council. To capture the engagement magazines offer, Hansa recommended conducting a separate study to identify the top four to five quality attributes. Publishers, however, did not fund it.
So, for all their carping, publishers have done precious little to showcase the power of magazines. It needed the entry of foreign publishers such as BBC or Axel Springer and FIPP, a global magazine media association, to change that. FIPP pushed the Association of Indian Magazines (AIM) to commission a large survey across ten cities. The results, shared by AIM last year in presentations made across markets were startling on every parameter from ad avoidance to time spent.
Unique selling point
"Business magazines are about communities, about a group of people who connect with the brand and its ideology," says Ashish Pherwani, partner, advisory services, Ernst & Young. That is exactly what business magazines are now figuring out. They are zeroing in on a specific target group, and connecting with it any which way �" through the Internet, the iPad, mobile, events and so on. So Forbes India is about "entrepreneurial capitalism," with an online edition and an iPad one sponsored by Rolex. Business Today does six paid webinars a year, along with 20 offline events. And each is a profit centre. "If we don't make 40 per cent margins, we don't do it," says Bagga. "Most of the profits for magazines come from events and awards. Events work because they get together communities and that is what advertisers want," adds Pherwani. To be fair to publishers, advertisers have shown little interest in combining online and offline readership numbers for better effect.
There are other changes helping to break the shackles that bind magazines to newspapers, like pricing. Within six months of launch, Forbes India realised that it was simply unable to cover its production costs at Rs 50, so it doubled its cover price. "Multiplex tickets are priced at Rs 150 and more, and similarly readers are willing to pay for good quality of content," reasons Gurmeet Singh, CEO, Forbes India. Fortune India started out with a cover price of Rs 100. Several other magazines, bleeding on their low cover pricing, have followed suit.
This has helped recover the cost of production, invest more in content and improve page realisations. "Among the biggest changes that foreign magazines have made is shift the emphasis to production values and the way the ad is represented. This has helped improve rates," says one editor. For instance, Rolex or Longines, brands that would have normally gone to Vogue or GQ, happily appear in Forbes India or Businessworld now.
According to Pew Research Centre's State of the News Media 2012, an annual diagnosis of the US media market, The Economist, The Atlantic and The New Yorker are doing well in the new media. For these brands, going digital has cushioned the fall in ad pages and readership offline. At 51 per cent of topline, The Atlantic's digital revenue now exceeds its earnings from print. The same research also shows that long-form content is read more on new devices and through apps. This bodes well for an industry struggling with the volatility of paper prices and rising distribution and marketing costs.
Much of this also points to where the future lies. The business magazine that clearly states its purpose and who it is talking to, reaches out to that community, wherever it may be, is the one that will win the game.
