The Government’s move of demonetization has raised a new set of challenges for the print industry that was already battling the onslaught of Digital media. A lot of publication houses have gone on a hiring freeze and working on ways to tackle the problem
By Dipali Banka
While the Print industry was battling to hold its readership numbers and revenue against Digital media, demonetization came as a big blow, especially for English language publications, resulting in the headlines quoted above. HT Media has reportedly shut down six editions and reduced staff majorly; while the ABP Group in a major restructuring, reduced hundreds of staff across all group publications. Even Bennett Coleman & Co. Limited – publishers of the daily Times of India and other English titles - is believed to have gone on a hiring freeze and had called for an all-editors’ meeting in Delhi at the time of filing this report.
NORTH TAKES THE BLOW
HT Media, which publishes the Hindustan Times and the English business newspaper Mint, has reportedly shut down six of its editions at Bhopal, Indore, Ranchi, Kanpur, Allahabad and Varanasi, with effect from January 9, 2017 and has asked hundreds of employees across levels – including senior people in editorial leadership roles and advertising sales - to put in their papers. Hindustan Times has shut down its Business Bureau. The one-and-a-half business pages of HT will now be brought out by the Mint team.
HT Media had reportedly brought in consultants Boston Consulting Group earlier this year to restructure the organization. “HT Media finally realized that its cost structure is very high and the management has embarked on optimizing cost across the board,” said an IDFC securities update on the Q2 FY2017 results.
During the Q1 FY2017 conference call, the company had indicated reducing the cost line. And during the Q2 FY2017 conference call dated November 3, 2016, Sandeep Jain, Chief - Strategy, Procurement and International Business, HT Media said, “We are working on a cost optimization project and it was kicked off about three months ago. The diagnostics of that project is going to be completed in a couple of months. We are looking at the entire organization and both the operating companies, so both in Hindi and English business. We see that the growth expectations have to be set right for this business and for us to maintain profitability, probably the only right option is to look internally at our costs. So we have embarked on this exercise which is pan-organization. We are hoping that by the end of this financial year, we should be taking action on some of the recommendations.” He further added, “The only thing I can say is that as of now, there are no holy cows. Every expense line item that is there in the organization is being challenged. We are trying to find out what are the opportunities to cut those costs. So, as I said, maybe in Q1 of next year, you will start seeing some of this impact in our costs.”
The company’s English newspaper saw a de-growth of 8% in Mumbai and 5% in Delhi in Q2 of FY2017. English Print advertising revenue declined by 6.4% YoY while Hindi Print advertising revenue grew by 1% YoY. Overall, Print ad revenue fell by 3.7% YoY. “English Print advertising decline was because of weakness in the Delhi market and Hindi Print advertising growth was lacklustre on account of Bihar elections being in the base and overall weak macro conditions,” says IDFC’s Q2 result update of HT Media. The company saw a 0.5% drop in copies sold on account of English newspapers in the quarter. “We have discontinued Edge copies; also have tried to cut down on non-monetized copies during this quarter,” said Sandeep Jain in the Q2 FY 2017 conference call.
“There is always some cash income that newspapers have, and that has been significantly impacted due to demonetization. Most newspapers have reduced number of pages. The impact is seen to a large extent in Northern India, and Hindustan Times has a stronghold in that region; hence it is largely impacted. Also, the HT Media offices in the Western part of India were burning a lot of cash, which was denting profitability,” said an analyst on condition of anonymity.
In a press release, the Brihanmumbai Union of Journalists (BUJ) has strongly condemned HT Media Ltd’s decision to shut down six editions of Hindustan Times.
TROUBLE IN THE EAST TOO
Meanwhile, the ABP Group in a major restructuring has reportedly reduced around 500 out of approximately 1,200 employees across all group publications, i.e., Anandabazar Patrika, The Telegraph, Ebela and channels, ABP Ananda, ABP News, etc. Most of the pullouts/supplements of the respective publications have been put on hold or are being merged. “ABP has also been going through a restructuring process. However, there is also the case of the Chief Editor of its English daily The Telegraph resigning. The West Bengal government would not go after him, but now, the paper is facing difficulties due to its anti-establishment stance,” said a media analyst.
CHALLENGING TIMES FOR MEDIA
Subscription-based media companies will not be impacted to a large extent, while Television might see a fall of 1-2% in revenues, but it will come back quickly, say experts. Even Radio, which is in expansion mode with the addition of new frequencies, might see some rationalization but investment will continue in this domain. Print, especially English language print, has had the maximum impact and most publications will take this opportunity to prune staff, rationalize and balance.