The print media industry will continue to face pressure for the next two to three quarters, as per the analysts. Layoffs and salary cuts may become a necessity for many businesses to survive as they have added substantially to their capacities.
Relief on newsprint costDue to the current economic slowdown impacting the print media industry, the Government has announced special customs duty exemptions for the newspaper & magazine publishing industry. Till now, a custom duty of 3% was applicable on newsprint and 5% on lightweight coated paper. A special additional duty of 4 per cent was also levied, which has now been waived.
Newsprint prices, which constitute more than 70% of the cost of producing a newspaper, shot up last year by around 60-65%. The concessions announced by the Finance Ministry includes:
• Full exemption in customs duty on newsprint and glazed newsprint used for printing newspapers
• Full exemption in customs duty on lightweight coated paper used for printing magazines.These exemptions will reduce the price burden to some extent and so too the reduction in imported newsprint prices from its peak.
DAVP rates increased
• Information and Broadcasting ministry came to the rescue of small and medium newspapers by announcing a revised policy of releasing Government advertisements.
• It increased the advertisement quota of the Directorate of Audio Visual Publicity (DAVP) for small papers from 10% to 15% and for medium newspapers from 30% to 35%. Under the new policy, 35 per cent of DAVP advertisements in rupee terms will be given to regional and other language newspapers against the existing limit of 30%.
• Under the new policy, all ministries, departments and subordinate offices of the Government of India can issue tender notices directly to empanelled newspapers at DAVP rates.
Hike in cover price
Print media industry desperately needs to increase their cover price, but the only reason for pegging the cost at ~10% of the cost of production is due to the fear that no one will buy them because rival papers may become cheaper. Hence, they are heavily dependent on advertisng to take care of costs and generate revenue. Recently, many newspapers revised cover prices.
Hindustan, Dainik Jagran and Amar Ujala raised their cover price in Meerut and Dehradun to Rs 3 from Rs 2.50. Similarly, in Bihar and Jharkhand, Dainik Jagran, Prabhat Khabar and Hindustan raised their cover price by 50 paise to Rs 4. The cover price of Hindi dailies in UP and Uttarakhand are expected to go up to Rs 3.50 and those in Rajasthan to Rs 3. English dailies, too, have raised their cover price in many markets, though Delhi seems to be unaffected as of now but for The Hindu which raised the price from Rs 2.50 to Rs 3.
The economic downturn appears to have taken a severe toll on the Indian print media industry. It's bleeding, given the conditions across all platforms. We believe that with dipping Ad revenues due to the slowdown and high cost structure, the print media industry will continue to face pressure for the next two to three quarters. Layoffs and salary cuts may become a necessity for many businesses to survive as they have added substantially to their capacities.
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