• OUTLOOK ARENA
  • VIEWS ON NEWS
  • JANUARY 6, 2010

The other brother in the Print industry

We often see a lot of stories woven around the 'two brothers' theme on our TV sets or in magazines. One brother achieves a great deal of fame and fortune. The other brother only manages to live in his shadow. Rarely do all siblings achieve equal prominence.

Ironically, the script seems to have played out within the media and entertainment industry itself. Some segments have achieved far more prominence than the others. Take the case of the Indian print industry.

Not just newspapers

India has a readership base of over 250 m. That makes it the second largest print market in the world. It can be segmented into newspapers, magazines, special interest publications, directories such as (yellow pages, exporters' guides and city guides), custom publishing and printing solutions. However, the newspaper segment, the famous brother, receives all the attention. But it looks like soon the other segments will soon carve their own place under the sun. Here's why:

  • Economic growth: Strong economic growth will lead to a greater demand for trade magazines, directories and guides catering to manufacturers and service providers. Increased sophistication in the way businesses are run will also aid demand.

  • Changing lifestyles: Readers now spend to pursue their diverse interests. That's due to changing lifestyles and greater disposable incomes. As a result, there is growing demand for special interest publications. These focus on specific needs of particular segments of the population.

  • Growing urbanisation: As per 2001 Census, about 28% of the Indian population is urban. There will be greater urbanisation and a continued rise of the middleclass in the future. As a result, a greater share of the wallet will be allocated towards publications.

  • Room for growth in ad spends: Non newspapers segments are typically more dependent on advertising revenue than subscription revenue. Indian advertising spend as a % of GDP stands at 0.34%. That is significantly lower as compared to other major economies. In fact, as per the FICCI PWC Report on the media industry, 2008, the world average is around 0.98%. Hence there is ample room to grow for the sector.

  • Higher shelf life: Advertisements in such media as magazines, directories, special interest publications have a higher shelf life than TV or newspapers. That makes them ideal candidates for advertising by providers of niche and luxury goods and services.
  • Liberalisation of foreign investment: 100% foreign direct investment in the publication of scientific magazines, specialty journals and periodicals is now permitted. Printing of facsimile editions of foreign journals in India is also now permitted. That significantly lowers the costs of servicing foreign journals in India.

Little wonder then, we believe the best days of the non-newspaper print sector in India lie ahead.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407