It’s all about the model, honey: Why India’s newspaper industry is set to grow and grow

Recently, I wrote about how app papers are cannibalizing print newspapers, focusing on the US perspective on the newspaper industry and the monetization of digital content. At the back of my mind I was already wondering about the relevance of that trend in the Indian market.

In India, newspapers are still doing very well. In fact, the newspaper industry is expected to grow from INR174 billion in 2010 to INR246 billion in 2013.

I believe there are a few factors that set the Indian newspaper market apart. First is the low literacy level in the country, due to which newspaper penetration is low. But as literacy rates improve, so does the market potential. Tied to that is the fact that only a small percentage of Indians have access to technology. Case in point is internet penetration, which stands at just 6.9%, implying that a huge part of the Indian population is still reading the printed paper because they do not have access to an internet connection.

Second, unlike in the US, we don’t have to go to a newsstand to buy a copy of the paper every day – the paper is home delivered at no extra cost to subscribers. With that model, the number of people opting out of receiving a newspaper is limited. Moreover, newspapers are very cheap – the monthly bill for one newspaper rarely exceeds INR 200 (and that’s on the high side). It’s no wonder then that since the past few years, circulation figures of most Indian newspapers have grown by about 5% per year.

Further, the editorial integrity of print in India, and the trust that print brands are able to command vis-à-vis other media, is very high. India also has a large number of established print brands compared to the US America, where there are only really two big print brands.

Add to the mix the large number of regional languages spoken across the country, with newspapers available in all of these languages. In fact, according to the Indian Readership Survey (IRS), the Hindi-language Dainik Jagran has the highest average issue readership of 16,393,000, significantly more than the average readership of the top English-language newspaper Times of India, with 7,471,000 (figures for the second quarter of 2011).

With such a huge audience base, it should come as no surprise that print advertising grew by 16% year-over-year in the first half of 2011, with newspapers accounting for 96% of ad jobs.

Moreover, when it comes to the app story, just 10% of mobile phone users in India have a smartphone.

Even the recent introduction of 3G services is unlikely to make a major dent on the Indian newspaper industry due to all of the factors above. After all, with strong brands, high editorial integrity and nominal pricing, the likelihood of new media impacting core readership and threatening the value delivered is marginal.

Nevertheless, the industry cannot ignore the trends in the developed market, as it is sure to become reality in the years to come.

I for one am not likely to pay for access to news when there are so many free (and excellent) alternatives available out there.

What’s your take? Would you pay to access paid news content online?

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3 responses to “It’s all about the model, honey: Why India’s newspaper industry is set to grow and grow

  1. You’ve taught me something new. Thank you =)

  2. Interesting post!
    We only take the local paper on Sundays now – though we can access the rest of weeks via online for a (very!) small fee.
    I doubt I would pay very much for online news services. I’m just naturally cheap and it’s too easy find a free service or to turn on one of the many news channels on tv :-)

  3. Actually— in the US if you have a subscription, the paper is cheaper than picking it up at the news stand, so you do not have to go to it to buy….

    But it is an interesting persective!

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