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Traditional media don’t invest on digital as it’s a loss making business: Marketing Conclave

by Satrajit Sen

by Satrajit Sen

“Traditional media houses don’t invest on digital as much as they should. In BCCL (The Times of India Group), there is a separate company (Times Internet which owns Indiatimes.com) and that is loss making. So, as it is hard to make money online, it (digital) appears uninteresting for the people in traditional media,” said T K Arun, editor, The Economic Times. Arun was speaking at a panel discussion, titled ‘Digital Future of Print Media’ of the Marketing Conclave organised by Internet and Mobile Association of India (IAMAI) in New Delhi on 29 April, 2010.

Speaking further, T K Arun said that newspapers will not phase out in India in the near future. “The reason newspapers got extinct in the US was because they were highly-priced (around Rs 25 in Indian context). Whereas in India, newspapers are not expensive and that is why they will survive,” said Arun. According to him, another reason that newspapers died in the US was that not more than five newspapers there were good in quality, but there are a lot of high-quality content still found in many Indian newspapers and as long as they continue the quality, they will grow.

Presenting the US picture, Mitya New, managing director, Dow Jones India said that like in Asia, newspapers are live and kicking in the US too. “The circulation of Wall Street Journal has been growing around the world and we are also the leading newspaper in the US. We have grown in terms of circulation and revenue and newspapers are certainly vibrant in the Indian as well as the US markets,” added New.

However, Mitya New agreed that digital is also essential and newspapers, in present day scenario, can’t think of surviving without digital. “We have a subscription based model on digital and that is hugely successful. Our reason for going the paid content way is that you can’t give out high-quality content for free. We have a subscription based model almost across all our digital products including the mobile version,” said New. He further observed that subscription-based digital model is the way every print media house will have to take, so as to make their digital products profitable.

T K Arun of The Economic Times observed that the mentality of journalists to be print first might be an issue, but can be solved. According to Mitya New of Dow Jones, advertising has a good opportunity in both print and digital media as in the first quarter of this fiscal Dow Jones has seen an increase in the share of its online advertising revenue.

Presenting some advertising numbers, Divya Gururaj, managing director, Mediacom, said that print media’s share in India is decreasing as today 48 per cent of the total advertising expenditure is made on print as opposed to 60 per cent made 10 years ago. Whereas, currently digital media attracts three per cent of the total advertising budget but is expected to double in the next two years. “One of the reasons for this lower spends on digital is that the cost for reaching thousand people through TV in India is priced at Rs 171 whereas for digital the rate is almost double,” said Gururaj.

Divya Gururaj further said that there is a huge generational and behavioural gap that persists in today’s consumers. “The genes of post-90 kids are digitally wired and they are the Generation Y, whereas consumers of pre-90 are the Generation D, and they like to be more print-oriented. For the GenD entertainment is TV and information is print, whereas for GenY, both are on digital. Marketers should reach their target audience depending on which age group the product is meant to be,” added Gururaj.

According to Mohit Hira, president, Training.com, NIIT, by the end of the last financial year (2009-10), print spends by his organisation came down from above 55 per cent to about 35 per cent whereas digital spends multiplied in the same period. “NIIT’s Training.com business is marketed completely via digital as we are in the lookout of leads. Besides, 80 per cent of NIIT’s overall activity is done on digital. This is only because we are targeting youths and print is not the medium for them,” added Hira.

Putting his point forward, R Sukumar, editor, Mint, said that 10 years ago, there were 39 million internet users and now we are speaking about 55 million. “So, either the number is wrong or the growth is really slow,” said Sukumar.

Responding to that, Divya Gururaj of Mediacom said that 10 years ago, DTH had 2 million subscribers whereas now the number is 20 million. This is because a lot of people in India, who are illiterate, have jumped directly to DTH as there was not one fixed language of communication. “I think if digital also goes that vernacular way a lot of people will migrate to internet from mobiles,” added Gururaj. She further pointed out that print is still growing in India owing to the limited reach of the English language and lack of IT infrastructure but digital will grow in the future with improved biometrics and infrastructure.

According to Mitya New, the slow growth of internet access in India is disappointing and might be due to the poor infrastructure in the country. According to T K Arun of The Economic Times, power supply is a big constraint for internet to grow in India. Also, investments in this medium are not happening.

Arun further said that e-Paper readership is not being counted and hence the passive viewership of ads is not being reported. Responding to that, Divya Gururaj of Mediacom opined that publishers are still following the traditional marketing process in digital. “In digital, banners were all about internet advertisements two years back, but now there are so many options. However, the print gives limited options for innovations in advertising,” added Gururaj.

Though there was some difference of opinions among the panellists, all the panellists finally reached a consensus that adopting a hybrid model of print and online will be the way forward and thus both the media can co-exist. Mitya New of Dow Jones said that people, who want news in real time, won’t wait for the newspapers and there is the need for being present in both the mediums. Agreeing to that, TK Arun of The Economic Times said that people read newspapers for the perspectives and views on the news that they have already read on internet and here comes the need to co-exist.

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