Media high on PE funds' list

To measure media growth, advertising spends as a ratio of private consumption rather than GDP (gross domestic product) is a much better indicator. In the next five years, India's ad expenditure as a ratio of private consumption will be 1.2 per cent," according to Akhil Gupta, chairman and managing director of Blackstone Advisors India Private Limited.

Gupta was speaking at a conference organised by the International Newspaper Marketing Association in New Delhi.

Traditionally, all markets measure advertising expenditure as a ratio of GDP and India's current ad spends, at .34 per cent of GDP, are much below the one per cent average clocked by developed countries.

According to Gupta, India's media industry is at an inflexion point and is expected to see an explosion in advertising.

"For private equity investors, the media is right at the top and a favoured investment opportunity only after infrastructure," he said, adding that the challenge will be to grow print media's share from the current 45 per cent of total advertising.

Though print will bring new readers into its fold from the vernacular and rural markets, the downside of the print business, especially for a new entrant, is that the costs of setting up the infrastructure and the delivery network are very high.

The newspapers are priced very low, too. Besides, the reading habits of people are hard to change.

"That's why there is hardly any change in the list of the top 20 highest-read newspapers in the country year after year," Akhil Gupta said.