Amid case studies of optimistic market expansion and advertising excellence at last week’s INMA South Asia Conference in New Delhi, the underlying question facing Indian publishers was sobering: Is India destined to follow the path of U.S. newspapers in terms of declines in circulation, advertising, and disinvestment in print?
The question took on greater significance with the rapid drop in the rupee’s value vs. the U.S. dollar – important since 65% of Indian newspapers’ newsprint is imported and purchased in U.S. dollars.
This was the constant chatter in the INMA conference’s hallways.
In presentation after presentation, Indian publishers put forward reasons the U.S. path was not inevitable:
- Unlike Western counterparts, there is significant “headroom” for print newspaper growth in second- and third-tier markets throughout India.
- Advertising as a percentage of GDP is at least half of what it is in Western markets and continues to rise.
- Literacy and population will continue to grow in the decades ahead, and rapid upward mobility along class lines will make the printed newspaper indispensable for the aspirational middle class looking upward, not sideways as in much of the rest of the world.
- Because of the uniqueness of Indian society, there is an intense hunger for knowledge – especially among the fast-changing rural parts of the country.
- The regionalisation of India is growing, not shrinking, affecting everything from politics to newspaper strategy. What is changing in rural India is different than digital India or higher-income India. Rural India is growing faster than urban India, thanks to the connectivity of roads, TV, and more. We are seeing the equalisation of aspiration.
Then there are business model comparisons.
For example, classified advertising was still 25% of revenues among U.S. newspapers in 2010 vs. only 5% of revenue in India. As another example, the business model for newspaper home delivery is uniquely cheap in India. So, the Indian mountain is different than the American mountain.
The world knows India’s print newspaper circulation continues to grow, yet we might not know the nuances. Since 2008, regional daily circulation is up 12%, English newspapers are up 3%, and “Hindi + regional” circulations are up 15.8%.
It is difficult to focus on a digital future amid so much print success.
Rama Bijapurkar, a market strategy consultant and author of the upcoming book We Are Like That Only: Understanding the Logic of Consumer India, pointed to global truths about change that suggest India does not necessarily have to follow the U.S. path:
- The races that companies ran yesterday are not the races they run today. For example, the world Microsoft conquered in the 1980s and 1990s had no headwinds from Android or mobile devices or even desktop competitors. It is a completely different race today.
- If you know Coca-Cola is being banned today in the United States, you don’t give it to your children today so it gets banned later in India.
- Per-capital income in China will soon be equal to Poland. But China will not be Poland.
In short, an evolved India is not necessarily an evolved Europe or United States, Bijapurkar argued. India is not the United States 20 years ago.
“We have to write our own future and not borrow someone else’s future,” she said. “The responsibility for the new model has to stay with us.”
Straight-line vs. disruptive thinking
I processed and parsed these arguments for the past week in many meetings in Mumbai and New Delhi, punctuated by the INMA South Asia Conference. I was constantly asked what my outsider eyes see in India.
Indian publishers see two ways of visualising what the next decade looks like:
- Straight-line thinking.
- Disruptive thinking.
The “straight line” sees continued growth in print thanks to demographic headwinds, albeit slowing growth that is inevitable. The straight line sees Outlier India, which is so different than the rest of the world that it can slow down global forces.
Everyone wants the straight line because it’s the easier, predictable path based on the skill sets of today’s workforce. And most of us like the idea that we’re different.
As one speaker put it, everyone wants an India where water flows uphill.
Shaping the straight-line mindset in India are the growth paths pursued. The past decade has seen the English-language dailies invade each other’s turfs in Delhi, Mumbai, Chennai, Calcutta, and other “first-tier” urban markets.
The non-English “language” newspapers have invaded each other’s turfs in “second-tier” and “third-tier” markets. Now we see language newspapers targeting first-tier markets and English newspapers targeting second- and third-tier markets with either English or language products.
The common theme during this decade of invasions? Print.
The kinetic energy from these invasions has unleashed innovations in print advertising formats, a sales and marketing orientation among the publishers, a door-to-door subscription canvassing process, new ways of viewing assets, and a relentless pursuit of growth paths and “the next big thing.”
The regional-language newspapers have created hyper-local fortresses to keep out the audacious national invaders.
There is still “headroom” for print in the form of new territories to conquer and monetise, and I sense a scramble to find “the next big thing.” As I’ve observed for many years, Indian publishers are industrious and always find a way.
Yet there was a parallel universe during my visits last week. In this universe, Disruptive India is staring at the consumer tsunami of:
- Leaping from low-end 3G access to 4G, providing connectivity speed.
- Hand-me-down secondary markets for tablets and smartphones that can bring digital access to news and information to the masses faster than Tata.
- A fragmented, schizophrenic golden era of segmentation in which there are many more Indias than ever before, playing into micro-targeting customisation that only digital can bring.
There is an incredulous belief from digital advocates in Disruptive India that newspaper publishers are slow-walking multi-media, culture change, and innovation beyond print. The world is changing, so they say, and, no, water doesn’t flow uphill in India!
The shape of the digital tsunami may be different and the speed with which it will wash ashore may be slower, but it is a tsunami all the same.
This, some worry, is the Achilles heel of legacy publishers in India.
We don’t even need to look to the future to see the diverging worlds of print and digital in India. A McKinsey study recently showed 50% of Indians below the age of 35 prefer Internet as their main news channel, whereas only 10% of people over 45 embrace the Internet the same way.
Indian publishers are acutely aware that, despite having the best brains behind them, Kodak failed because it didn’t see the change coming with digital pictures. Borders didn’t see how people’s habits were changing in buying books. And Sony Walkman couldn’t foresee the shape of “music on the go.”
So how to balance print and digital in this unique and interesting market? How to maximise headroom in print while being ahead of the digital curve? What is the smart, uniquely Indian approach?
While European, North American, and Asia/Pacific peer publishers are integrating print and digital, my sense in India in 2013 is that the cultural wall between the two worlds is too great to integrate in the current environment.
Companies can present an external hybrid face and can piece together multi-media solutions for advertisers. Yet the work of creating a platform-agile workforce is only now coming into focus.
How to conceptualise print and digital in India
Since hope is not a strategy, here is how I would approach print and digital in India (distilling so many conversations):
- Digital away from the core: I would treat digital as an away-from-the-core development activity that needs its own space to fully develop away from the dominating print culture of newspapers.
The print culture in India is more acute than anywhere else in the world, even in the print heydays of the 1970s and 1980s. Thus, there should be a different management remedy.
There are models in North America where this should be done within a company (Toronto Star) or outside of the legacy company (Deseret News). Regardless of where it is placed, digital needs space to grow among Indian publishers.
- Create cultural bridge that makes print and digital ubiquitous: There needs to be a cultural integration bridge developed, along with a timeline: leadership, management, and human resources that can seamlessly operate with print and digital as ubiquitous.
In a straight-line environment, one can imagine a long bridge. In a disruptive environment, this bridge may need to be shorter than Indian publishers prefer.
- Integrate: At some point, integration of print and digital will happen in the right cultural environment and with the right workforces. Consumer habits and how the advertising community buys will force your timeline.
In other words, print and digital’s integration is not a question of “if,” but “when.”
Meantime, I believe it’s important that Indian publishers separate out and prioritise the digital opportunities. There is too much talk of “digital” as an umbrella term:
- Online video: Online video has insane potential for content-rabid Indians. I visited with a Mumbai-based television company that is already seeing measurable disruption from consumers fleeing the TV screen to the second and third screens of laptops and tablets. Legacy newspaper publishers can play in this space and learn from TV counterparts.
Most publishers are where global innovators like Fairfax, Schibsted, and Bonnier were in the 1990s, and they spent a decade experimenting and learning. Indian publishers have two to three years before the combination of 4G and cheap tablets transforms the market into a video haven with rich rewards for advertisers.
- Mobile: Mobile is online, and online is mobile in India. The desktop Internet is more of an office function than a home function.
An Ernst & Young executive told INMA that legacy media can cover 40% of rural India, but only mobile has a chance to reach the remaining 60%. With advertisers increasingly seeking micro-targeting, mobile is the priority development channel for publishers.
Prioritise where the money is in the digital space. Advertisers are only true to eyeballs, and budget decisions are shifting in favour of digital. Online video and mobile are the low-hanging fruit for news publishers in India.
Rajiv Verma, CEO of the HT Media, referenced Alvin Toffler’s seminal book, Future Shock, when putting the impact of technology in historical context: “The shock has become stronger than what he conceived. Consumers are going to be spoiled for choices. Information overload is magnified multiples of multiples. What will remain relevant for newspapers is this: Do readers trust the brand?”
Verma told the INMA conference in New Delhi that the big mistake among Western publishers was that their siloed environments fought the advent of digital media instead of embracing it. He suggests that Indian publishers embrace the paradigm of “and” rather than “or” with print/digital.
The global trends will push Indian publishers to digital. In a straight line, that means decades; in a disruptive environment involving 4G and low-cost mobile devices, that means a few years.
The only questions are about timing, disruptions, and how best to manage the transition in a uniquely Indian context.