The future is rosy, says Ravi Dhariwal

09 Nov,2011

 

 

 

By Tuhina Anand

 

Newspapers have a strong future ahead, says Ravi Dhariwal, President, INMA Worldwide and CEO, The Times of India. Sharing his views with the audience at INMA: 5th South Asia Annual Conference on the Global Newspapers and South Asian Opportunities, he said that the industry can unitedly face down the challenges confronting it, and continue on the growth path.

 

Print players in developed markets when faced with pressure on profitability coupled with losing their revenues started focusing on the cost. The result was a cut in journalists, cut pages, and cut quality. They got seduced with the argument that the business was not well balanced, circulation not earning enough money and being too dependent on advertising to recover the cover price. On the other hand, the consumers have tons of option, multiple platforms while the truth of newspaper also exists that the brand has slimmed down from 48 pages to 24 and journalism was not of the same quality that they were used to. Consumers had to pay double the amount for a newspaper so the value equation particularly in the US got horribly wrong. This led to increased pressure of people but Dhariwal pointed that the situation is stabilizing now particularly on accounts of circulation, balance sheets and profitability pressure.

 

He said, “I think the industry went through a phase of evaluation where they were came to a basic conclusion that digital is where the growth is and they must invest heavily there at the expense of print. That difference led them to doing things first for the digital and at the expense of print because they didn’t have monies to put both sides. They said all growth will be in digital so let’s invest there.”

 

After making this point, Mr Dhariwal said that this assumption has a few problems, the first being that Digital at best in most advanced environment comprises only 10 per cent of the revenue, the rest being still from print. He said, “So if you put all your money in 10 percent and neglect the 90 percent there is a problem.” He also said that digital for a news media company is an inherent problem because very little of a person’s time on digital gets spent on news. As a result digital for a news company will always be the country cousin. Also the demographics in South Asia, with increasing urbanization, literacy, income and a young curious democracy, works as a great combination for newspapers to grow. He said, “The industry does grow in our country by 4-5 percent per annum. Readership doesn’t grow as fast, though it is not declining, but it doesn’t get reflected because of the way readership is measured in India currently.”

 

Another reason why he remains bullish about the growth of newspapers is because the newspaper adds fantastic value to households. He said, “It’s a medium that allows an individual to spend 20 minutes of their quality time for less than Rs 3 and if you have a thrifty wife like mine you will get a rupee back at the end of the month by selling it in raddi. So for Rs 2 you get a newspaper at great pricing but what is even better is that it gets home delivered.”  Another reason for growth is because the editorial quality has improved. He said, “I think our editors are increasingly aware of what is happening to our readers and the newspaper reflects the interest of the readers – politics, local, community. Increasingly quality of newspaper is getting better and I am confident that the paper I read is getting better every day. Also in our country people in newspaper business are ambitious, they are not happy with just influencing people but want to see their business grow. They have brought multiple editions and geographic expansion; like it’s astounding that Dainik Jagran has 295 editions. Even at TOI, we have many editions but there lies tremendous opportunity in markets like Kerala, some big city in TN, AP. In expansion we not only give our readers great value but also great choice.”

 

What one should worry about, he said, is how to manage cost and how to continuously innovate to give more to advertisers. He said, “As long as we invest behind innovation, quality of editorial product, keep price low, and the product is home delivered, then we don’t have to worry. We have a reason to celebrate.  The opportunity is that we have an editorially curated product which is now being able to be displayed and expressed in different platforms. We should go after that because the reader is going after that. I have always maintained that for us it’s not digital first or print first. It is not print dollars and digital dimes but Its Print and Digital.” Even media companies have realized this and have become multimedia companies, adapting to this change.

The biggest of the challenges, he said, is that of managing cost, newspapers not being attractive to FMCGs who are the biggest advertisers and have turned to TV, environment where the government tries to create misunderstanding and rift among employees and lastly lurking fear of ‘what if’ digital expands dramatically and affects print. However, to a large extent he said that these challenges can be overcome by collaborating as an industry to find solutions and bring about a change.

 

 

 

 

 

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