Recently, Dainik Bhaskar, the country's second-highest read newspaper, rolled out a survey on likes and dislikes of potential readers of its to-be-launched edition in Ranchi, Jharkhand. Another move that shows how keenly Hindi newspapers are looking at non-metro cities for their growth and profitability.
Two leading media houses — DB Corp and Hindustan Media Ventures Ltd (HMVL) — have decided to launch editions in cities where marketers are expected to increase their advertisement spends. While Hindustan (from the HMVL stable) will strengthen its position by launching a new edition in Gorakhpur in Uttar Pradesh, Dainik Bhaskar (of DB Corp) plans to launch new editions in Jharkhand, Bihar and Jammu.
“We are witnessing an enormous opportunity in the non-metro urban markets, with a large consumption base which has enhanced purchasing power. Marketers are focusing on these markets, which are key drivers for future business growth,” said Ashok Rajgopal, Partner, Media and Entertainment Practice, Ernst & Young (E&Y).
Hindi newspapers are betting on the consumption story of Tier-II and Tier-III cities, as they say there is a big enough advertisement pie to be shared between all players, since a huge market in the country has been untapped. According to a report, ‘The New Market Shehers: Tapping Potential Beyond the Metros,’ released by E&Y on Tuesday, the share of non-metros in newspaper advertising (by volume of activity) in 2009 was higher than that of the metros. However, the actual amount spent on non-metros was lower.
"There is a shift in advertising spends and volume toward non-metro urban markets, which potentially is 40–50 per cent of the country’s urban advertising expenditure. According to industry estimates, this share was 30–35 per cent in 2007. Since media rates are much lower than in the metros, the shift in the volume of marketing spends is even more significant than the absolute rupee shift,” says the E&Y report.
DB Corp plans to invest Rs 75 crore over the next two years in Ranchi and the rest of Jharkhand. The company says the size of print advertisement revenues in the two states is presently Rs 200 crore, expected to double in the next couple of years. Advertisers are expected to put in more money, considering that a new entrant will lead to increase in readership and reach.
According to a Group M report, the print advertising market size in India is around Rs 10,800 crore, with the Hindi daily advertising market contributing to the tune of 2,000 crore . In this market, Uttar Pradesh and Uttarakhand are the largest, with a combined contribution of 31 per cent or 620 crore. Industry experts say the market in UP, MP and Rajasthan has become very competitive due to the presence of a number of players and Jharkhand and Bihar are comparatively less crowded.
"The sudden interest of newspapers in Bihar is understandable. The state will go to the polls in October and election time is usually a good time for newspapers to push circulation. It also spells a spike in advertising revenues. In Bihar, ad revenues could surge by at least 15-20 per cent during elections. Elections yield best circulation results. It is the best entry time for a new player," said an industry expert.
“We plan to increase our reach and hence strengthen our leadership in the states of Bihar and Jharkhand by launching new sub-editions of Hindustan, focusing on providing local news," said Amit Chopra, CEO, HMVL. HMVL is planning to raise Rs 300 crore through an initial public offering this year. The venture has all the Hindi brands of HT Media under it.
The Hindi-speaking states have shown potential for economic growth in recent years, underlining the focus of print industry in these areas. Readership and circulation is directly correlated with literacy levels, that increased from 62.5 per cent in 2002 to over 73 per cent in 2007.
