FICCI-KPMG-Report-13-FRAMES

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42 03 Print Regional to the rescue © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The power of a billion: Realizing the Indian dream 43 Print industry overview INR Billion 2007 2008 2009 2010 2011 2012 2012 growth 2013p 2014p 2015p 2016p 2017p CAGR (2012- 17) Total advertising 100 108 110 126 139 150 7.3% 162 179 200 222 248 10.6% Total circulation 60 64 65 67 69 75 7.3% 79 82 86 89 93 4.5% Total industry size 160 172 175 193 209 224 7.3% 241 261 285 311 340 8.7% Total newspaper revenue Total magazine revenue 148 159 163 181 196 211 7.6% 228 248 272 298 327 9.1% 12 13 12 12 13 13 3.8% 14 14 14 13 14 0.9% Total industry size 160 172 175 193 209 224 7.3% 241 261 285 311 340 8.7% Source: KPMG in India analysis, Industry discussions conducted by KPMG in India 2012: Tough year for print The calendar year 2012, was the year when the going got tough and the tough got going. The INR 224 billion Indian print industry grew by only 7.3 1 percent from INR 209 billion in 2011- lower than KPMG in India’s expectation of 8.3 2 percent growth last year. helped the company shrink average delivery times from seven hours to four hours, and papers are now supplied within a 200-kilometer radius of where they are printed, instead of the previous 350 kilometers. 5 The high dependence on advertisement revenues resulted in the growth of print industry being dampened by poor macro economic performance of the country. In 2012-13, the Indian economy slowed down its growth momentumregistering a growth of only 5 percent as compared to 6.2 percent in 2011-12 3 . The slowdown can be attributed to a host of factors such as high interest rates to curb inflation, investment bottlenecks that slowed down corporate and infrastructure investment and poor global economic conditions that took a toll on India’s exports. All this has resulted in advertisers adopting a cautious approach towards their marketing initiatives-leading to relatively muted growth in overall advertising spends. In such challenging times, the Indian print industry has adopted a pragmatic approach with most print players now focusing on consolidating their position in core markets and penetrating them further through the launch of new editions rather than entering newer territories. The industry has also made efforts to save the bottom line by effectively managing operating costs. For example, HT Media has brought down its raw material costs from a high of 38.2 percent in Q2FY13 to 33.8 percent in Q3FY13. The decline in raw material costs was brought about by lower consumption of newsprint and softening of international newsprint prices which have declined from USD 623/tonne in the beginning of CY12 to USD 620/tonne towards the end and further to USD 616/tonne in February 2013 4 . On the other hand, Dainik Bhaskar has over a period of time decentralised its printing operations. The strategy has 01. KPMG in India analysis 02. FICCI-KPMG Indian Media and Entertainment Industry Report 2012 03. According to Ministry of Statistics and Programme Implementation website of the Government of India it is Central Statistics Office “ 2012 started on a tough note for the print media industry, including HT Media. With strong headwinds on advertising revenues throughout the year, our focus this year was on rationalising costs. The bright spots were our emerging businesses like Mumbai, Hindi and Radio, which have shown growth despite a difficult economic environment. “ - Vinay Mittal Chief Financial Strategist, HT Media The print industry continued to derive most (94 percent) of its revenues from the newspaper category. The INR 13 billion 1 magazine segment continued to decline in share due to decline in readership of general category magazines. 6 The industry is worried that the readership of the sector is holding flat but not growing. Niche magazines with their defined readership and advertiser base continued to perform better. Advertising, as stated earlier, is a prime contributor (67 percent in 2012) 1 to the total revenue earned by the print sector. However, with advertising budgets tightening and the eventual threat of newer competitive platforms such as digital, in the long run, it would be prudent for the industry to increase circulation / subscription revenue as much as possible. 04. ICICI securities analyst report, Feb 13, 2013 05. http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4439 06. IRS Q3 2012 © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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FICCI 2013 143 “ The Amendments t
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11 Technology The power of a billio
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Acknowledgement We acknowledge the
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