Anchor | One Big Idea by Manajit Ghoshal: Publishers must raise the price

23 Jan,2013

By Manajit Ghoshal, Managing Director & CEO, Mid Day Infomedia Ltd, India


The age-old model of selling newspapers to readers at a pittance and then to monetize through advertisement revenue is set to change in India. I am talking about newspapers in general and English newspapers in metro cities in particular. The revenue ratio for most English newspapers would be in the range of 85:15 for advertisement revenue and subscription revenue respectively. This should move to an ideal mix of 50:50 in the medium term and to a 25:75 mix in the long term. I am aware that I am sticking my neck out with these figures, but publishers have to respect content first and only then will they be able to make the readers pay the fair price with conviction.


The present lopsided revenue model puts huge pressure on the business side of media businesses, and some of this pressure to get advertisement revenues seeps into the editorial function in terms of the business side trying to curtail negative edit on big clients. It’s a serious deterrent to independent newsrooms and while so far most publications have been able to keep a clean record as far as hard news is concerned, features and specials have not been able to resist some of this lure. Publishers of quality newspapers will need to up the subscription prices in line with international pricing models and thus reduce their reliance on advertisement revenues. This will also lead to increase in rates of advertisement as publishers will not be hard-pressed to cut yields to garner advertisement volumes.


Most importantly, it will be favourable to the reader despite an increase in his media outlay because he will be assured of quality independent news without interference from big businesses. After all, if readers want the gold standard in news reporting they will be ready to pay the price.


This flipping of the ad:subscription price ratio will herald a radical shift in media reporting and media selling.


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