Media check: How will print do in 2012?

Not very different from the previous year — as far as trends are concerned.

Overall, print newspapers will be the big loser, but outdoor will also face the heat. Radio will continue to stagnate; digital will zoom. TV will find the going very, very tough as far as advertising revenue yields are concerned, even if their overall revenues go up. Let’s take them one at a time. Today, it’s print that’s the focus.

PRINT: Caveat: This assessment is without going into revenues from the dotcoms and the possible revenues from subscriptions of e-newspapers and e-magazines, which will follow on Wednesday.

Newspapers The unpopular headline: Pressure on yields, pressure on margins. It’s an interesting phase that India is going through — high growth in some markets as far as both circulation and advertising revenues are concerned, flat in some markets, and a downward slide in others.

The really bad news is that the most mature markets are where newspapers would be under maximum pressure. The larger the city, the greater the number of titles and the greater the circulation — these will feel the brunt of the de-growth.

Newspapers in mature markets have high pressure on yields, to increase circulation (because of intense competition) and higher input costs (notably newsprint); and being the leader will offset — to some degree — the pressure on yields. In markets like Delhi (and NCR) and Mumbai, advertisers aided by media agencies, will hammer the price down, taking advantage of the intense competitive environment.

Newspapers in new markets have a better outlook, but, almost by definition, the numbers will be small. We will see more and more editions of big newspapers in these new markets, with skeletal local editorial staff making up a few city pages, with the bulk of the paper’s editorial costs being met by their main editions. The trouble is that the local editions of the large, national newspapers will aggressively bring down the ad yields in these markets, purely from the point of view of grabbing market share, thus bleeding the incumbents.

One cannot see any new thinking in the area of cover prices, which will remain ridiculously low, so the business model, by and large, will remain the same – advertiser dependent.

The impact of Justice Katju: This subhead is, in many ways, misleading. Perhaps it should read ‘The impact of attention on paid news’. There have been enough debates on paid news and with the elections in five states around the corner, newspapers will have to deal with the eagle-eye of the Election Commission. The EC, actually, has little need to be vigilant — candidates will keep a close watch on each other’s spends and will complain as soon as they spot infringements. Clubbed with the EC’s attention will be Justice Katju’s pronouncement vis-à-vis advertising from the government. If the Press Council prevails and can use advertising budgets as both carrot and stick so that newspapers tread a healthy line of responsible coverage, the revenue from ‘paid news’ — which is not insignificant – will come under pressure. This affects newspapers in small towns and big.

Impact of the economic environment: It’s going to be a tough year for all media — and brands and media agencies will bring enormous pressure to bear on newspapers, a medium they use less with each passing year. The competition in every market doesn’t help the cause of newspapers; it only helps the buyer. It is a buyer’s market, make no mistake about it.

Those who will see through a tough year: The largest multi-edition newspapers because they have historically enjoyed very high (and unreal) margins in their early printing centres, so they can still take a hit on margins and stay above water. Profitable editions in older markets can pay for the losses in the newer markets.

Those for who it will be a tough year: The single edition newspapers in competitive markets will find it very difficult to rejig their business plans when a challenger brand drags the price down.

Magazines There are some categories which will find the going increasingly difficult, unless they re-invent themselves. And there are those who will find it easier.

The biggest problem for the category is the lack of reliable measurement. The Audit Bureau of Circulation certification is virtually non-existent and the IRS study does little justice to magazines with small circulation.

As a headline, the more general the content, the more difficult it will be in 2012. The more focused the content, the more the content appeals to a special interest and the greater the chances of doing well this year. Advertising in magazines will be bought more for the quality of the reader than the quantity of subscription.

Magazines will also be bought for who writes for it, their opinions and analysis and their influence.

If all this seems like Magazine Marketing 1.0, look around you. How many magazines abound that make the fundamental error of being all things to all people — and, therefore, struggle to have a definition? Is your reader young or old? Is your reader rich or middle-class? Is your reader a frequent international traveler or not?

The more general the magazine and the more hazy the profile of the reader, the less likely it will find it’s way automatically into a media plan.

The good news: The last few years have proven that magazines with a clear focus can, indeed, cover the costs of variables through the cover price. More magazines will raise the cover prices so as to bring down the pressure on advertising sales.

Events: The greater the definition, the greater the ability to generate revenues from events. We will see more events from the special interest magazines, further bringing down the pressure on advertising revenue.

General news magazines: These will face the toughest times, unless they reinvent themselves. News is already dated as far as newspapers are concerned, so news magazines have no chance. The only way out is to change the editorial mix, moving more towards long-form features, analysis and investigative journalism. Can this be done week after week after week? Does it make sense for news magazines to turn fortnightly from weekly? Can their existing business models accommodate (or bear!) a change like this?