Bright future forecast for the business of news

August 7th, 2008 - 12:45 pm ICT by IANS  

New Delhi, Aug 7 (IANS) The business of news in India, in the face of a virtual explosion in the media, has a bright and exciting future. More than a score of media business entrepreneurs, managers, editors, advertisers and investors came to this conclusion after a day-long seminar organised last week on the topic “The Future of News” organised by afaqs!, an advertising, media and marketing company.

The Indian media business has two main components - entertainment and news. While entertainment still rules the roost with advertisement and subscription payment revenues fetching it a whopping Rs.255 billion ($6 billion) a year, the news business is still quite large garnering Rs.164 billion ($4 billion) a year.

In recent years there has been a virtual explosion in the news media. With more than 50,000-60,000 print media news publications and as many as 67 news channels India has emerged as the world’s second largest news market after the United States.

In this country, some 99 million copies of newspapers are brought every day and are read by about 302 million readers. There are 67 news channels viewed through 115 million TV sets by over 575 million viewers. There are also 55 million Internet surfers and 1.2 million bloggers.

With the mobile phone revolution that is currently going on in India, the country already has the world’s second largest subscriber base of 275 million, behind China, and is adding 8-9 million subscribers every month. That means within the next three years nearly half the country’s population would be mobile phone subscribers.

This in turn is adding to the numbers of news consumers in India. One of the earliest companies and perhaps the only company providing news content through mobile handsets now, MyToday, has already hooked up 3.5 million subscribers since its launch in 2006 and is adding 300,000 subscribers every month and will hit 10 million in a year.

In the battle for time share, Indian consumers are now spending 50 minutes consuming news every day if you average the total time across newspapers, TV news and online.

In this scenario, where Rajat Sharma, chief of India TV, says “news has expanded” is there scope for further expansion of the news business? Don’t we already have enough? One of the key questions panellists at the seminar tried to answer was “News: How much is too much?”

The consensus answer was: It is definitely not too much. Although no one went into the question of the global trend of declining newspaper readership and the onslaught by the electronic and online media, T.N. Ninan, chief of the Business Standard Group of publications, said, “It’s an optical illusion. If you look at the English language newspaper readership of about 11 million, 75 percent is accounted for by just about five titles. The market is too concentrated and there is certainly space for more entrants.”

Ajit Balakrishnan, chief of, couldn’t agree more. “We ran a software to aggregate news headlines by crawling through newspaper, electronic and online news sites and were surprised to find that there is no diversity in the news headlines. They were boringly similar, not reflecting the kind of overall and ideological diversity that one expects in a country like India,” he said.

“Consumers are flocking to news and advertisers are flocking to news,” added Punitha Arumugham, chief of advertising major Madison India. So despite the so-called “massification of news” advertisers are not going to stop spending on news,” she asserted.

Shubhodip Pal, corporate communication head of global hardware giant Hewlett Packard, which is one of the largest advertisers in India, agreed wholeheartedly.

What about investors? They are usually the last ones to put their money on losing bets. “Investors are flocking to news too,” said Salil Pitale, chief of Enam Securities. And he should know as Enam has handled fund raising from the securities market for such media companies as Zee Telefilms, Sun TV and NDTV.

One of the world’s largest private equity funds Warburg Pincus had also reportedly invested Rs.1.5 billion by picking up a seven percent stake in DB Corp, owners of Dainik Bhaskar, Pitale said.

“The fact that irrespective of market conditions, media shares are trading at a substantial premium only goes to show the kind of faith investors have in news media. Media shares have a high price to earning ratio of 25 reflecting this premium,” he said.

At the end of the day, speakers concluded that while the news business as a whole certainly had a bright and prosperous future, it is the vernacular media and the mobile phone media that are likely to see the most action in the coming days.

Related Stories

    Posted in Uncategorized |