Newspapers in India, growth is back - The Noel D'Cunha Sunday Column

Noel D’cunha: Recent months have witnessed a sharp decline in newsprint prices. This development augurs well for the newspaper industry’s health, and leads to enhanced profitability for newspaper companies in the coming years. Your view.
Amit Khurana: I agree. Also advertising revenue will grow steadily. Elections are a good thing for newspapers. The 2024 elections is a key driver for advertising revenue for Indian newspapers, albeit at a slower pace compared to the digital media sector.

Noel D’cunha: The advertising landscape in India  remains under USD10 per capita, in comparison to the nearly USD200 in the US. Is it poised for rapid expansion with India’s growth trajectory?
Amit Khurana: While digital media is set to flourish, print will maintain its significance due to its credibility and extensive reach. According to recent KPMG reports, the advertising market is projected to increase from Rs. 2.1 trillion to 2.8 trillion, with print witnessing gradual but consistent growth at a CAGR of 3.4%.

Noel D’cunha: Other than the pivotal role of the 2023 state elections and the upcoming 2024 general elections in terms of boosting newspaper advertising revenue, what more is adding to the allure of print media?
Amit Khurana: The TechNova survey indicates advertising categories such as FMCG, education, auto, retail, and home improvement are projected to provide continued support to the industry. Conversely, segments like fashion, jewellery and start-ups are poised to contribute to the growth of the print sector.

Noel D’cunha: What about e-commerce enterprises?
Amit Khurana: Oh yes. eCommerce is utilising print platforms to access wider audiences. Multinational corporations expanding their manufacturing and sales bases in India are finding print media as a credible avenue to connect with consumers. Case in point is smartphones.

Noel D’cunha: How are media houses navigating circulation and pagination trends?
Amit Khurana: With the alleviation of newsprint costs and improved financial prospects for newspapers, there will be lots of changes in pagination trends. During periods of financial strain, many newspapers curtailed pagination to manage costs. However, the reduction in cost pressures coupled with expectations of increased advertisements has led to a gradual rise in pagination.

Noel D’cunha: How so?
Amit Khurana: During challenging times, newspapers reduced pagination by an average of 20% to cut costs. Now, with the substantial drop in newsprint prices and the anticipation of more advertisements being carried by newspapers, I foresee a progressive increase in pagination. The circulation numbers for the majority of newspapers have returned to 90% of pre-Covid levels and these numbers are expected to remain stable.

Noel D’cunha: What is the reason?
Amit Khurana: On the one hand, young readers are moving away; however, factors such as improving literacy rates, a wider reach of newsprint, the challenges posed by digital clutter, and the credibility of print media are likely to attract more readers to print.

Noel D’cunha: Since the industry outlook remains stable for the next three to five years, will newspapers allocate investments toward infrastructure maintenance?
Amit Khurana: I don’t anticipate massive investments in machinery and infrastructure. Having said that, as India’s road infrastructure improves, travel time between cities will decrease. This is likely to prompt newspapers to rationalise their print locations. For instance, a newspaper with print facilities in both Lucknow and Kanpur may contemplate establishing a common location to serve both markets. I believe newspapers will implement such strategies to enhance operational efficiency and reduce costs.

Noel D’cunha: What about the print versus digital debate?
Amit Khurana: There will be coexistence between the print and digital media. This synergy is expected to enable newspapers to access larger audiences and attain media stability. While digital platforms are set to grow at an accelerated pace, the potential for digital overload may drive a shift towards trusted mediums like newspapers, which offer reliable information and tangible connections to authentic journalism. As you are aware, while Indian newspapers have invested significantly in their digital ventures, monetisation has been a historical challenge. Nonetheless, digital’s recent traction suggests a promising future, even though it remains a minor segment of their overall business.

Noel D’cunha: Finally, the lobby that damns paper and says newspapers are not green and clean.
Amit Khurana: Print media has consistently adopted greener practices. Increasingly, newspapers are demanding environmentally friendly products, driven by growing awareness. My company has been at the forefront of fostering greener solutions. Indian newspapers have been utilising chemistry-free plates since 2012, much ahead of the global transition to greener alternatives.