Friday, April 01, 2016

Time for Top Newspaper Publishers to Accept the Reality

Newspapers in India are not dying and digital is not taking away their share of the pie. What ails the industry, however, is how the top publishers refuse to acknowledge the ensuing downward journey by rejecting the readership survey numbers. Vanita Kohli-Khandekar explains to Dibyajyoti Sarma why this is a worrying trend

As we discuss the importance of the Wan-Ifra expo and annual conference, to bring together the Indian newspaper industry on one platform, we inevitably move to the question why Indian newspaper publishers project such a grim picture of the reality. The fact is Indian newspapers, whether English or regional languages, are doing well, and there is no practical threat to their existence. Yet, industry leaders tend to paint a doomsday picture, as if the industry in India is on the verge of collapse.

The digital media is the usual culprit. The argument is that many more people have stopped reading printed newspapers as they have migrated to digital media, where they get all the information they need within the touchscreen of their smartphones. Again, television has always been a competition.

The proponents of this theory come armed with data, most from the US and some cases, Europe, where, they claim, the change has already happened. Recently, an online news portal ran a story how the future of the newspaper in the world is at the hands of Amazon owner Jeff Bezos, who recently acquired The Washington Post (The same person who is credited with disrupting the traditional retail ecosystem.).

Again, the 7 August 2015 issue of Frontline carries a cover story on Alan Rusbridger, the former editor of The Guardian, who says, “…In my experience of it, you can be a better journalist in the digital world. Or, you can see it as the danger of being left behind if you didn’t do it. And there’s so much to learn and there will be so much competition in the digital world. So, certainly, the more I spent time editing, the more I felt I had to really get inside the digital world. If I’m going to be wrong about all this and if print is going to be here for a few years it’s fine, because we know how to do that.”

The sum and substance of this is that while the ground reality in India is different, we seem to be seeing the industry from the prism of an outside model. Is it possible to have a model exclusively for India, with data and figures that show that exact reality of the Indian newspaper industry?

Newspapers as Aspiration Objects

Of course, there is an ‘Indian model’, with data from agencies like Audit Bureau of Circulations (ABC) and Indian Readership Survey (IRS). There are also other audits and surveys. It is just that people get excited by news from the US and they react to it, explains Vanita Kohli-Khandekar, media specialist and the author of the book, The Indian Media Business, which has sold over 10,000 copies.

According to Kohli-Khandekar, India is a very heterogeneous and very voluminous market and any model has to build that into itself.

“There are two factors that have kept India in a totally different growth trajectory,” says Kohli-Khandekar. “First is the concept of home delivery, which does not exist in most developed markets. In the US, for example, you have to go to a newsstand and buy a newspaper. The moment you start getting news online, you stop going to the newsstand.” This, of course, is not the case in India. We get the paper every morning, delivered to our doorstep.

The second factor is the fact that in India newspapers are objects of aspiration. “In India, there is a respect for the written word,” says Kohli-Khandekar. “A country which is just over 60% literate, in India, being able to read is itself a sign of achievement.” She illustrates this with an example of an uneducated working class man, and how he would react when he saw his children read a newspaper.

The long and short of this is newspapers will survive in India; it doesn’t matter what happens in the West. Literacy, electricity and penetration of media are some of the benchmarks through which we can gauge the market, says Kohli-Khandekar. “I once did a matrix, which looked at these factors – how literacy, or electricity can affect media penetration, and we found that the media that best works for India is the radio, which is cheap and does not need electricity, so to say,” she says. “Now, however, mobile phones have come on top as the media with biggest penetration, about 80 to 90%.”

In short, newspapers, with its written words and pictures have phenomenal possibilities. “My bet is television and newspapers in India are not going to die in a long, long time,” says Kohli-Khandekar. “We can argue in what format it would survive, but print will remain.”

Dealing with Digital

Why then is this kolaveri about digital onslaught? In the Frontline interview, Rusbridger explains, “Print is wonderful for some things. But the world we are in now is going to be very, very different, in which every aspect of life, not just media, is affected by digital. And it seems to me it’s inescapable. And so, to try and sort of cling on to this old world and pretend that somehow journalism is going to be exempt from this revolution seems to me not a wise way to think about the future.”

Rusbridger is right of course. Kohli-Khandekar argues that while newspaper publishers are screaming hoarse about digital, going online, they have actually done precious little to exploit the medium.

“Talking about newspapers, what are they actually doing in the digital space?” Ask Kohli-Khandekar. Apart from a handful of them, most players have not yet scratched the surface. Just putting up news stories online is not enough. In a dynamic platform like online media, there needs to be a constant engagement, which is certainly lacking in most online news portals. “It’s a long process,” says Kohli-Khandekar. “The newspapers should have started experimenting with the digital space some 10 years ago. For example, television is doing much better in digital than newspapers.”

The potential is enormous. For example, when online, looking for news, a newspaper reader usually gravitates towards the website of the said newspaper. A cursory look at Facebook reveals that while The Times of India page has 7,211,475 ‘likes’, the web-only news portal Firstpost has only 637,747 ‘likes’.

“I think the newspaper publishers have not yet realised how big this could become and how they should approach the space much more aggressively. For example, how many of the players play up their statistics for their websites, the way they do for their newspapers. They are getting traffic, but they are not marketing it enough,” she says.

There are too much data in the digital space. In this context, it is important to figure out how a newspaper publisher is going to build its brand. Newspapers like The Guardian and The Economist are the examples how old brands reinvented themselves in the digital space. And, they started more than 10 years back. These sites are independent entities, not a digital version of the printed product. This is the key, and Indian media houses are yet to find the way.

Kohli-Khandekar agrees that there are operational issues. After all, the Indian newspaper industry is used to work in a certain way. “And also, there are issues of focus. If you are getting the chunk of your revenue from one product, which is print, you will definitely focus on that,” she says.

Thus, we return to the earlier issue. Printed newspapers are doing well. This is one of the reasons why despite the fact that while all newspaper houses have online presence they have done nothing much to exploit the potential of the digital space.

Monetising an online product may be another issue. India, as yet, has not been able to create a market for paid digital content.

The most important reason, however, is the ad revenue. While brands may be flirting with the digital space, newspapers continue to bag more than 40% of total ad spending by the brands. This is the biggest after television, and the numbers are actually very good. On the other hand, digital accounts for more or less 10% of the total ad spending.

So, there is no crisis. Kohli-Khandekar says the Indian newspaper industry is a mature market. While there has been sustained growth in the past few years, sooner or later, the market is going to plateau. In this scenario, a new newspaper may find it hard to sustain, as the market leaders will try all their might to maintain their top position.

Number Games

This brings us to the issues of transparency in the market. Among the major players, both in English and in the regional languages, who is the No 1? What are the circulation figures? What are the readership figures?

The situation, at best, is despairing. Kohli-Khandekar says the market leaders find it very hard to deal with falling numbers. Everyone wants growth. But if it does not happen, they try to suppress the results. This is a trend, she says, will have adverse affect on the industry, as it stops the decision-makers from seeing the way the industry is mutating in the last couple of years.

“There is no respect for what the metrics mean,” says Kohli-Khandekar. “Take for example the circulation figures published by ABC. Everyone jumps in and out of the figures. If the figures are good, they will publicise it, if not, they will ignore it.”

Kohli-Khandekar says big newspaper houses have ignored the last few readership surveys. They are still using the old figures as currency to attract advertisers. This is simply because big players refuse to accept even a mild change in their figures.

She argues that the metrics, the surveys and audits are not there to serve the interest of the market leaders, but to reveal the state of the market. This is something that is not happening the way it should. She says even when surveys are authentic and foolproof, major players seem to reject them simply because the numbers do not reveal their expectations. She gives the example of IRS (Indian Readership Survey) 2013. “It was well done. It was statistically sound, the samplings were better, and the security was better so that nobody could fudge the data. Yet, the newspaper houses refused to accept the results citing statistical anomalies,” she says. Then there was an audit, which cleared the survey. Yet, newspaper publishers refused to accept it.

“I think they are not accepting the results because the data is now starting to show stagnation in the large categories,” argues Kohli-Khandekar.

Within this scenario, media agencies and ad agencies have come to play an important role. “Around 80% of the total newspaper revenue comes from ads and you are saying that you not going to accept the currency on which advertisers work? How can this work?” asks Kohli-Khandekar, adding, “It is dangerous when an industry refuses to accept the ground realities. Instead of focusing on the numbers, the newspaper houses should focus on the challenges.”

While the leaders refuse to wake up to the reality, the smaller newspapers want the data. They are the challengers. They want the IRS numbers to see how they are doing. Kohli-Khandekar says the big players’ refusal to back robust metrics is pulling the industry down. “This is the real crisis, not the internet,” she adds.

Vanita Kohli-Khandekar Explains/

The Tragedy of Metrics

Most publishers who are part of the Media Research Users Council (MRUC), which releases readership numbers, have been up in arms over a re-hauled readership survey that was published two years ago. The whole issue was settled through an audit, revalidation and finally an increase in sample size by the MRUC in April 2015.

However, most publishers are still sulking about losing their ranking in the annual ranking. Meanwhile, advertisers - after missing the metrics for two years - are moving on to TV, digital and other media. Much of the trouble, say industry experts inside the system, stems from publishers’ ego and some short-term tactical thinking. The last acceptable readership survey had shown stagnation in English print. The downward journey that print media in the rest of the world is going through, had begun in the profitable, growing Indian market. In the absence of current figures, advertisers use historical numbers. By stalling the readership survey, the top publishers can maintain the status quo on rankings.

Saving the Readership Survey

The readership growth of English print had slowed down to less than 1% in IRS 2012. Some top newspapers showed marginal declines. In the absence of current data, the advertisers, base spends on historical data, so the established ranking holds. However, smaller publishers, beyond the top 2-3 ranks, need readership to negotiate for better ad rates. The whole thing is a tussle between big and small publishers.

That is ironical. The MRUC was set up in 1994 to shake off the dominance of large papers in the erstwhile National Readership Survey. Now, it is more representative of all users - big and small publishers, advertisers and agencies. In 2009, it joined hands with the Audit Bureau of Circulations to overhaul the survey. The new IRS was released in January 2014. It showed that total readership was down from 353 million to 281 million people (restated to 301 million) and many biggies were displaced in the ranking. That is when all hell broke loose.

The Indian Newspaper Society denounced the survey. Dainik Bhaskar got a stay order on it. However, a 15-member revalidation committee cleared it. Using IRS 2013, along with one round of fieldwork from 2014, the MRUC released IRS 2014 this year. But, publishers still refuse to accept it. Their complaint? The data is dated, tamperable and the sample size is small.

Then the MRUC board decided to increase the sample from 235,000 to 300,000.

(Excerpted from the Business Standard, where Vanita Kohli-Khandekar publishes her columns.)

(This feature was first published in PrintWeek India.)

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