Newspaper Industry in India after the Second Wave of the Pandemic

14 Jun,2021

 

 

By Indrani Sen

 

Indrani SenThe Indian newspaper industry faced an unprecedented crisis last year after the National Lockdown was declared at a very short notice. Circulation fell drastically when many subscribers, particularly housing societies, shut their doors for the newspaper delivery persons for the fear of the contagious virus being carried by the newspapers or the delivery folk, leading to change is consumption pattern of newspapers. Lack of local transport also prevented the distributors and hawkers from reporting for work. This was followed by withdrawal of commercial advertising as advertisers were worried about a fall in circulation and readership and were themselves affected by choking of distribution pipelines and economic slowdown leading to loss in their sales. The FICCI EY Report on Indian M&E industry 2021 showed that ad revenue of Print came down from INR 206 billion in 2019 to INR 122 billion in 2020.

 

After the National Lockdown was lifted in 2020, the newspaper industry tried its best to recover their lost grounds. As per the same FICCI EY report, it will take Print four to five years to regain the pre-Covid ad revenues level. However, the industry seemed to be recovering well during the first quarter of 2021 as TAM AdEx data for Jan-Mar 21 showed that 1350 new brands advertised on print during that period.  When compared with Jan-Mar 20, the quarter also showed 9% increase in ad space mostly from Hindi and other language newspapers. Similarly, April-May 2021 recorded better results compared to April-May 2020.

 

As per TAM AdEx analysis in May 2021, when the second wave of the Covid-19 was at his peak, there was an average 58% growth in ad space per publication as compared to May 2020. However, all was not well as compared to February 2021 and March 2021, the ad space in Print saw a drop of 42% and 29% in April 2021 and May 2021 respectively. As the phased process of unlocking has begun, the newspaper publishers expect that both the ad volume and value would pick up by August 2021 and grow further during the festive season of 2021.

 

It appears that newspapers were better prepared to handle the second wave of the pandemic in 2021 and the lockdowns imposed by various state governments across the country. Along with the process of gradual unlocking, the newspapers now are looking forward to recovering their lost grounds. The credibility of the printed word, the vaccination drive, revival of the corporate sector and good rain forecasts are the other factors which are expected to contribute to the overall growth of the newspaper industry in 2021. The Print industry has appealed to the government for a stimulus package and an increase in FDI in 2021. The government has not responded so far, but the industry is still hopeful of getting, some positive response though no relief was announced in terms of waiving the import duties on newsprint by the finance minister in her 2021 Union Budget.

 

The newsprint prices, which saw a decline in the international market (below $300/metric tonne) in 2020, have started going up from the beginning of the calendar year 2021. The price was $670/tonne-$700/ tonne in April-May. The industry expects it to go up further. It appears that quite a few paper mills which used to export newsprint to India and other countries, either shut down their business or migrated to the businesses of producing brown papers and craft papers during last year when their business was hit due to the global pandemic.

 

As India is far from being self-reliant in newsprint production, our newspaper industry, struggling to recover from the effects of the pandemic, has been hit further by this demand supply imbalance of newsprints in the international market. Many newspapers are increasing the use of indigenous newsprints to balance out their cost of productions.  However, most newspaper owners feel that this crisis of newsprint prices is not going to last for a long term and expect the international market to stabilise before our festive season in the third quarter of 2021.

 

To sum up, the newspaper industry in India seems to be set on the path of recovery after a severe decline of both circulation revenue and advertising revenue in 2020. In recent times, during the second wave of the pandemic, the industry was not much affected and would have been in a better financial position if they were not hit by the crisis of newsprint prices. It is expected that by end of the calendar year 2021, their overall performance may be better than predicted earlier by media analysts.

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