Hindi papers ride market boom

Access to funds, shift in ad spends drives growth.

Behind the mushrooming of new and parallel Hindi newspaper brands lies the story of a buoyant advertising market in the Hindi-speaking states.

Publishers who are launching second titles in the same market see merit, therefore, in segmenting their readers and offering more focused audiences. It is obvious that the understanding of markets and marketing has reached new levels in Hindi publishing.

The Hindi papers' advertising cake is estimated to be Rs 1,500 crore, and growing at an average of about 19 per cent a year. But like all averages, that hides the high and low points. Rajasthan Patrika's marketing head, Arvind Kalia, claims, for instance, that Rajasthan is experiencing an exceptional 50 per cent growth in advertising. Advertisers have evidently realised that product consumption in markets like Jaipur is going up.

"The theory of a regional market boom is now a reality and it is getting reflected in the advertising. There's an increase in region-specific print and below-the-line spends," observes Dainik Bhaskar's marketing chief, Sanjeev Kotnala.

A media analyst from First Global concurs: "The city markets are saturated and the rural hinterland is gaining focus. Advertisers are, therefore, shifting their spends."

Analysing the data crunched from Indian Readership Surveys between 1998 and 2005, A S Raghunath, a print media consultant, claims that nearly 42 towns in the country fall in the high growth category. Surprisingly, the majority of these are Hindi-speaking cities like Agra, Allahabad, Amritsar, Bhopal, Chandigarh, Dhanbad, Bhilai, Faridabad, Indore and Jabalpur, among others. National advertisers are, therefore, targeting these towns aggressively as they sprout shopping malls, multiplexes and food chains.

Referring to his mall-cum-multiplex in Kanpur, Jagran Prakshan's Shailesh Gupta says that the theatres enjoy a high 60 per cent occupancy rate. Major retail brands such as Pantaloons, Planet M and Pizza Hut are already there.

He's obviously not worried about finding readers or advertisers for his newspaper brand, I-next. "Both local retail as well as national advertisers will advertise with us," he says. Other than food and coffee retail chains, telecom, insurance and education service providers are also eyeing Class B towns.

The boom, in turn, is changing advertisers' perception of Hindi print products. "At the end of the day, a Times of India will not deliver an audience in Gorakhpur. Advertisers will have to use the Hindi medium," says Raghunath.

Interestingly, though Hindi newspapers' circulation and readership have been several notches higher than that of the English press, space sellers for Hindi papers have never been able to command good advertising rates for their products. But advertisers and media planners are finally having to do a re-think.

The leaders in the Hindi newspaper market are commanding better ad rates now. and their balance sheets are looking good too as a result. Dainik Jagran, for instance, expects its revenue to touch Rs 600 crore by the end of this financial year, compared to Rs 470 crore last year.

The Hindi newspaper companies are using the opportunity provided by a buoyant market to also sell their growth story to private equity funds, in order to raise capital.

The government's decision in 2002 to allow 26 per cent foreign equity in the print media definitely helped companies that have been short of cash. Amar Ujala, for instance, is said to be raising over Rs 100 crore from the New York based hedge fund DE Shaw, by offering equity.

Amar Ujala did not respond to Business Standard's e-mails. Meanwhile, other Hindi print players too are either flocking to strategic investors and private equity funds. Some, like Jagran Prakshan, have also taken the public share issue route to raise money.

With much more money flowing into this market, it seems certain that there will be more action in the Hindi print media market.

As a Hindi publisher says: "Remember that oft-quoted figure of 360 million people who can read but do not read any newspaper? Two-thirds of these are Hindi speaking consumers."