FICCI-KPMG-Report-13-FRAMES

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The power of a billion: Realizing the Indian dream
For the first time in the last five years, the Education
category is not the highest spender in the print medium.
While the Education sector has maintained its share
on print advertising at 10.6 percent, the Auto sector
has increased its contribution to 11.4 percent in 2012 as
compared to 9.8 percent in 2011 12 .
FMCG continued to be one of the top spenders on the print
medium contributing 10.3 percent in 2012 as compared
to 8.9 percent in 2011 12 . Its contribution in 2008 was 5.8
percent. Increased spend by FMCG companies has been a
big respite for the print sector in a year where growth was
hard to come by.
The next two years will be critical with the advertising
growth to be largely driven by increases in election spends,
advertising driven by the launch of new products (30 auto
model launches in the next 12-18 months), categories
expanding due to product and brand launches (4G, foreign
retail chains), launch of new editions and publications
catering to niche markets.
Circulation revenues contribution to sector
grows compared to previous year
In an attempt to improve circulation revenues, newspaper
companies are trying to encourage readers to purchase
multiple papers per day through bundling of editions, for
example, bundling business papers and tabloids with
regular newspapers and providing them at discounts. Such
initiatives are expected to increase penetration and improve
circulation revenue.
The cover price of newspapers in India is extremely low
when compared to other countries. While an Indian daily is
sold at a monthly price of ~USD 2-3, the same subscription
can be as high as USD 6-8 in Pakistan, USD 18-20 in
Malaysia 13 .
Average monthly cover price (in USD)
After last year’s price corrections by the magazine
players, 2012 saw newspaper players finally opening-up
to experimenting with cover prices and taking baby steps
towards increasing these in many mmarkets. During the
year, some of the leading publishing houses marginally
increased the cover price of a few of their editions. DNA
increased its cover price from INR 2.5 to INR 3 while Times
of India increased it from INR 5 to INR 6 and for D B Corp
the average cover price went up from INR 2.5 to INR 2.72 14 .
Language markets continue to grow
In the print sector, revenues from Hindi and vernacular
segments are fast catching up with English, which has,
to date enjoyed a majority share of the value. Hindi and
vernacular language publications have always enjoyed
a healthy readership base. In 2012, nine out of top ten
dailies being published were either in Hindi and vernacular
language publications. However, in the past this segment
had lagged in its ability to effectively monetize.
In 2007-09, the advertising rate premium commanded
by English newspapers was roughly 10 times over
that of regional language papers. The scenario is now
changing with the premium paid by advertisers for English
newspapers steadily declining to be in the range of 3-4
times in 2012 15 .The industry believes that there is potential
for Hindi and vernacular dailies to further increase their
rates.
The two segments (Hindi and vernacular) now contribute
approximately 62 percent of industry’s revenues and cater
to 89 percent of the readership.
Average Issue Readership (AIR) of top 10 dailies
Publications Language AIR (in '000)
Dainik Jagran Hindi 16474
© 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.
Source: KPMG in India analysis
12. Pitch Madison Ad Outlook 2013
13. KPMG in India Analysis
14. KPMG in India Analysis, Company reports
15. Industry discussions conducted by KPMG in India’
Dainik Bhaskar Hindi 14491
Hindustan Hindi 12242
Malayala Manorama Malayalam 9752
Amar Ujala Hindi 8536
The Times Of India English 7653
Daily Thanthi Tamil 7417
Lokmat Marathi 7409
Rajasthan Patrika Hindi 6818
Mathrubhumi Malayalam 6415
Source: IRS Q3 2012