Bhaskar Burning Bright
The ramifications of the COVID 19 pandemic on Print media are stark. Cost cutting became an umbrella term the world over, under which, anyone and anything was being sacrificed, as necessary. Now post COVID (if we can say that), the Print media industry is seen struggling for growth, coming to terms with the rise in newsprint prices, and economic slowdown. Naturally, print copies have reduced, print editions replaced with .coms, and there is a whisper of a dying medium. But the Dainik Bhaskar story is something else. Q] What are you planning to achieve by increasing your print copies? Q] Print prices have touched $750-$800/tonne. Have you passed on the burden to advertisers? Q] The Audit Bureau of Circulation (ABC) reported a decline in print circulations from January-July 2022. Many publications opted out of the audit, what do you think was the primary reason? Q] Did you cut down on your work-force during COVID19? Q] Dainik Bhaskar faced a series of IT raids across 30 locations in India due to its COVID19 coverage, which led to a drop in government ads by 8%. How did that impact the publication? Q] Will you take your Print business to newer cities? Q] However, Radio has not been doing exceedingly well as a medium… Q] What is the advertiser sentiment looking like for the overall Print industry, and Dainik Bhaskar specifically in the upcoming year?
Dainik Bhaskar, one of India’s most popular Hindi newspapers, was launched in 1958, living through some of India’s most tumultuous times. Today, the media company is aggressively increasing its copies, which might seem ironic to those who are vouching for a Digital-driven media in a post COVID world. But having increased 1.50 lakhs copies in past four months, even in the face of sky-high newsprint costs, the national Hindi daily is all set to touch 49 lakh copies by December 2023.
One might wonder, whom the newspaper is targeting, who is really reading newspapers anymore? Girish Agarwaal, Promoter Director of Dainik Bhaskar Group says, “Several people ask me if millennials are reading newspapers today. The simple answer to this question would be that Rs 550cr is the net revenue that we gain by selling newspapers to readers (net of commission). Today, India spends Rs 10,000cr to buy newspapers, and the core newspaper readers are over 25 years of age. Those who read newspapers in the age group of 15 to 24 are my fringe readers.”
The Print media industry was not only struggling with rise in newsprint prices, but also the challenge of advertisers moving towards Digital advertising, which was deepening. While certain print editions, such as the English daily DNA, the Deccan Chronicle’s Bengaluru and Kerala editions, Asian Age’s Mumbai and Kolkata editions, and The Telegraph’s Bihar edition were shuttered before the pandemic, post COVID saw a spate of print editions shutting down. The Times of India shut down two of its four editions in Kerala; Sakal Media closed Sakal Times, and Gomantak Times; Business Standard shuttered its Raipur and Patna Hindi editions, as well as its Sunday edition; while Mumbai’s Hamara Mahanagar, closed its Mumbai, Pune, and Nashik editions. The Telegraph stopped its Guwahati and Jharkhand editions, and Mail Today discontinued its print edition as well.
On the other hand, the Pitch Madison Advertising Report predicts that Print AdEx for the very first time will tumble down to 19% in 2023. When the numbers are not the most encouraging, what is it that will give Print validation today? According to Agarwaal, 70% of advertisers in India are locally based, who believe in advertising for footfalls and demand instant response to advertisements in terms of sales, enquiries, and store visits. He says, “This is the litmus test only for Print media. When an advertiser releases a campaign on TV, does he expect a response by evening? No. But they release a full-page ad in Print, and by evening they want to know how many people walked in and how many products got sold out.”
Meanwhile, it was after a gap of two years that the Audit Bureau of Circulation (ABC) conducted an audit for the January-June 2022 period, which showed a decline of 20-30% in circulation figures. With consumers moving towards multiple Digital platforms for content and news consumption, the Print industry is feeling the pinch and is integrating the content on multiple channels. When asked if Print will sustain its glory for the years to come, Agarwaal says, “I remember, when a decade back Bill Gates had come to India and spoken about foreseeing the death of Print media in next five years. India as a country has defied everything to prove that wrong. Four years back, if someone would have told that India will become the largest UPI digital payment system, no one would have believed it. In the US, it took 25 years to stabilize their Digital economy, whereas, we adapted to a UPI-like system like no other country did. It is very clear that any organization tends to grow and survive all odds by staying connected with consumers.”
“Dainik Bhaskar is on a growth trajectory now. Despite cover price hikes, we are seeing this growth. As per TAM report, advertisers are back with us. Our growth is higher than television majors like ZEE, which means that this industry has huge potential going forward,” Agarwaal says.
It should be noted that Print media contributes 21% to the overall AdEx in India against the global average of 4%. In 2022, print advertising in the country grew 15% by volume and 11% by value at Rs 18,470cr. While Advertising spends in Print media in India is expected to grow by 9% to reach Rs 20,133cr in 2023 as per PMAR, what worries Print publications in India today is Digital taking away the market share and hindering the growth of Print as a medium. Several media publications have integrated their content on Digital for maximising revenue growth. It is a natural evolutionary step for media companies today.
Despite this, the largest chunk, around 88% revenue, comes from Print, while Digital contributes a meagre 2%-3% to DB Corp’s revenue. On the Digital ad revenue front, Agarwaal says, “Digital for now is all free. We do not want to hinder user experience by accepting ads on our apps. Our policy is that we don’t want the readers to get bothered about advertisements when they use our online assets.”
After 65 years in business, the national Hindi daily is unlocking its true potential with Bhaskar 2.0 to aggressively grow in its existing markets by not only increasing print copies, but also deploying more resources for deeper penetration. “We have always gone against the trends. When every other print publication is cutting cost and number of print copies, we believe that it is the right time for Dainik Bhaskar to grow by pushing the market, deploying more people, resources, and by putting more investment. We believe that it is the right time to get the return.”
Talking about the backlash from the government, Agarwaal says, “We reported certain things and it was not against anybody. It was factual reporting. As a journalist and as a newspaper organisation, it is my responsibility and moral obligation towards my readers to report ground realities fearlessly. Now somebody may like it or somebody may not like it. Few may also call it anti-government. For us the reality is that we reported the fact on the ground and we will continue doing so.”
Dainik Bhaskar operates in 12 states of the country ruled by different political parties, and according to Agarwaal, the newspaper always tries to keep a neutral stance. He says, “We can never be silent on issues which impact our readers. It is our job to report facts. We have never been left or right. We are very clear that our reader wants us to be at the centre. Now let the reader decide whether he wants to be left or right.”
THE BIG SPRINT
Girish Agarwaal, Promoter Director of Dainik Bhaskar Group, in conversation with IMPACT, spoke about the Group’s media business and how their national daily is gaining strength in multiple states in India. Agarwaal also elucidated the reasons why he thinks that advertising revenue for Print media will increase in 2023.
Every other print player cut down print copies when the situation became adverse. We have increased it by 1.5 lakh copies already, and the added copies will then go up to 2.5 lakh by December. We are growing in Madhya Pradesh, Gujarat, and Rajasthan. These are our focus areas. We have managed our operating costs very well and are still showing a good cash flow. We generate Rs 300cr of free cash flow every year. Moreover, my financials are so strong that I have Rs 550cr of cash in my balance sheet.
As a print publication, one can pass on only limited cost to advertisers, and it shouldn’t pass on the expenses entirely to its stakeholders. We have increased our cover prices by 10%-20%.
Some publications opted out of ABC because they felt that certain guidelines laid down by ABC were not suiting their business at that time. ABC is like a club membership, they have set rules, and if you fall in those set of rules and conditions, only then is your publication qualified to be audited and certified. I don’t fall into that qualification. For instance, ABC guidelines says I can’t give X percentage as commission to agents in a particular market, but to promote my newspaper, I have to give that X percentage to my agents. So, it is fine that I opt out, establish my circulation, and then re-enter ABC after meeting their required guidelines.
We had to cut down our workforce by 10% due to the use of additional technology that helped rationalize operations. Also, we did a bit of internal realignment by shifting few people from one team to another based on their abilities.
The government body is well within its rights to ask us questions about our business operations. On the advertisement front, it is the Central or State government’s call to use a certain publication to drive their communications. But after a certain period of time, both realised that they did not get the desired response, following their decision to not advertise with us, and thus returned. We are happy to do business with them. Having said that, I don’t want to depend on anybody for the ad business. Government ads contribute to 15% of our total ads, so if Rs 100cr gets dropped for some reason, we will replace it with something else.
To make it clear, we are the largest publication in Madhya Pradesh, Rajasthan, Haryana, Chhattisgarh, Chandigarh, Bihar, and Gujarat. Also, the largest in Ahmedabad, and number 2 in Patna. In Jharkhand, overall, we are placed second in terms of market share. There are no plans for expansion into newer cities as of now, as we feel there is a lot more potential in states and cities like Jaipur, Ahmedabad, Surat, Bihar, Jharkhand, Punjab, Haryana, and Madhya Pradesh where we are already present. We will expand here. Every market is evolving into a new one and more nuclear families are emerging in these cities. Individual growth is being noticed as they move into bigger houses, and people have more disposable income.
Q] DB Corp has been operating its radio channel MY FM for years, but it never focused on metro cities. Why?
If you look at the balance sheet of MY FM, and that of other players who target metro cities, you will note that we are clearly ahead of them in terms of revenue. One should be responsible for the stakeholders and employees, and not enter a market that cannot give returns. Never do business just to prove something to somebody or to grab media headlines.
The problem with Radio is that it has a lot of limitations because of the rules set by the Government of India, such as, the auctioning mechanism, not allowing Radio to broadcast news, etc. This led to the stagnation of the industry. Moreover, there is no USP left for radio stations. They play the same songs as others, which I can also listen to on any audio platform at will. Government policies are majorly responsible for the decline of the radio market in India.
It is a positive one. All the automobile brands are talking about increasing their Print budget by 20%-25%. Recently, there was an announcement by Maruti Suzuki, and also by Honda that they are increasing their Print budget by 25% this year. When I spoke to clients from Education, Real estate and Automobile sectors, I learned that they are expecting a good growth of 15%-20% in revenue this year, and with this growth they are looking to invest further in advertising. They will be using Print much more. So I am very positive that the next financial year will be more fruitful in terms of advertising revenue. This is one of the reasons why we are investing more in the market by increasing copies.
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