On March 23, the first 21-day lockdown in India was announced. It marked a time of reckoning for the publishing sector; we were confronted with all the vulnerabilities in our publishing model.

Those included our overwhelming reliance on advertising as the primary revenue source, our dependence on government advertising that constitutes a significant share of total advertising, the perils of maintaining cover prices at abysmally low rates, and the near absence of subscription revenues from our digital assets.

Newspapers in India sell at a fraction of their production costs because publishers generate revenues from advertising. A significant share of advertising comes from government sources, and the total share of advertising from government sources can make up 30% to 40% of overall print advertising revenues.

This dependence on government advertising comes at its own costs, as governments can pull the strings with respect to critical coverage by newspapers, a dynamic that is often at play. It also created a publishing eco-system where readers receive content practically for free.

The context of magazines in India

In relative contrast, magazines in India enjoy a healthier subscription-to-advertising ratio, as the cover prices in most cases recover the complete cost of production and distribution. Yet, magazine publishing operates in an eco-system that is largely informed by newspaper publishing.

Magazines get a fraction of government advertising compared to newspapers. Newspapers dominate the distribution channel, which includes newsstands and morning delivery centers, and have grown exponentially in last two decades while their nominal prices remained stagnant.

Magazines, on the other hand, have had to increase cover prices. Average cover prices of leading newsweeklies and newspapers in United States, Europe, and even emerging economies show that magazines to newspapers price per copy is a multiple of two or three. But in India, this multiple is as high as 12. As a result, magazines in India are far more expensive than newspapers.

While the size of magazine and newspaper sectors in most economies is comparable, that’s not the case in India:

When these figures are put against the comparative readership of newspapers and magazines in India, the asymmetry in economics of publishing becomes even more apparent. The Indian Readership Survey 2019 found the total readership of all newspapers in India was 425 million, while magazine readership was 87 million. So, while magazines have a total readership that is more than 20% of newspaper readership, the size of the industry is less than 1%.

Post-pandemic equalisation

In this respect, the COVID-19 lockdown and subsequent shift in economics of publishing could provide an opportunity for re-imagining magazine publishing in India.

Advertising will not return soon, certainly not to the pre-COVID levels. Governments resources will be stretched with healthcare services and likely will cut their advertising spends. And the surge in digital consumption of content is likely to remain high. So, publishers of both newspapers and magazines will have to figure out an operational and strategic plan that acclimatizes to lower ad revenues, lower physical sales through traditional newsstand channels, and larger demand of digital content.

This is where magazine publishers in India can create an opportunity for greater relevance. Over the last few months, most publishers have moved toward a paywall for digital content — something that should have been done much earlier.

In India, the advertiser has always been at the center stage of publishing. Since newspapers were literally being given away for free, publishers could get by with serving content that didn’t necessarily meet the highest standards of quality. (Readers’ lament with the quality of journalism in India is a well-known reality.) But since they bought the publication at throwaway rates, the model flourished as advertisers, including government, financed news production and distribution.

At the same time, magazines have had to increase cover prices gradually, dedicating greater energies toward reader engagement. This has forced magazine publishers and editors to keep readers at the center of their publishing, thinking far more than newspapers have had to.

Newspaper readers at center stage

With the implementation of paywalls across news Web sites, we could be moving to a new paradigm that levels the playing field between newspapers and magazines. In a paid online model, the reader must be at center stage of publishing decisions. A publisher’s competition is not just another similar Web site, but all content that is served by Google and Facebook.

Publishers must ask critical questions: What is our editorial niche? What is the exclusivity and depth in our content so it cannot be easily substituted by free content from another source? How sticky is our readership? And so on.

These questions inform offline publishing as well but are far more critical in the new digital paradigm. Magazine publishers in India have been forced to grapple with these questions for a longer while now, and so this digital transition can be more seamless for them.

Historically, magazines have nurtured deeply engaged communities of readers aligned around sharply defined niches. Whereas newspapers generally cater to a large readership base offering a content mix that is widely spread but usually thin in depth, magazines can operate with relatively smaller niches, offering them deep content in subject areas of interest.

The paid online model is geared toward rewarding publishers that offer content with exclusivity and depth, such that it cannot be readily substituted by Google search. Magazines therefore need to keep strengthening this approach, building and engaging online readership, and create higher affinity to pay for content engagement.

Leveraging changes in content, distribution 

The expanding digital content eco-system, with a boom in content streaming services as well as telecom companies becoming content platforms themselves, offers new opportunities for magazine publishers in India to collaborate with these channels and create content in new formats, leveraging on the richness of their content and the deep trust their brands usually enjoy with their readers.

The over-the-top (OTT) streaming media services are hungry for new content. Magazine brands can curate, co-produce, or partner with either these networks or production agencies to create such content. Already, some magazine brands have taken steps in this direction. Conde Nast has been co-producing lifestyle shows for Indian TV channels as well as OTT networks, the most popular being a celebrity lifestyle show called “BFFs by Vogue.”

Earlier this year, our publishing house, Delhi Press, produced a crime show for Tata Sky, under the banner of our Manohar Kahaniyan magazine. The show is a collection of dramatised short films based on crime thrillers published in the magazine. Besides OTTs, there are content syndication and licensing opportunities with telecom service providers and online content aggregators to help publishers accrue value on their content. The new emerging content landscape offers many innovative opportunities.

Discovering distribution synergies

Beyond this, there is need and opportunity for magazine publishers in India to develop a collaborative publishing framework with respect to physical distribution. The distribution channel in India has been weakening for the past few years, with erosion in volumes of sale as well as an overwhelming domination by newspapers. At present, most publishers maintain their own distribution network, however big or small.

Unlike in many western economies, there are no stand-alone distribution companies that collectively take up the logistics of magazine supply chain. The result is a wasteful and inefficient distribution, with lots of duplication of work at the publisher level. There needs to be collaboration amongst publishers to ensure that the vast network of agents, retail stands, and morning newspaper centers are optimally serviced.

Historically, Indian magazine publishers have had a much higher percentage of retail sales compared to subscription sales. With weakening networks, publishers need to emphasise building subscription sales. One reason behind low subscription numbers has been the inefficiency of Indian Post in ensuring delivery. This is an area where publishers can collaborate and either impress upon Indian Post for better service delivery, or collectively figure out another logistics partner.

Our own internal studies have indicated that readers have a high propensity to pay for subscription if it is sold to them at least effort on their part and if delivery is guaranteed. So, there is a huge scope to build subscription sales. The Association of Indian Magazines is already working to create such a collaborative framework.

Collective bargaining for digital publishing

Finally — and this is where all publishers (magazine and newspapers) need to collaborate with respect to the overall framework within which digital media operates in India — publishers need to come together.

As digital is an increasingly more important play for publishers, and since the conventional ad-led model is not working, publishers need to work together to articulate a collective bargaining framework to negotiate better terms of engagement with search engines, social media, and digital media aggregators, especially Google and Facebook. This is a raging issue in most of the world as publishers are becoming more assertive about getting a fair share of revenues that digital media accrues on the back of serving content produced by them.

There are other associated issues such as checks being put in place to manage the menace of fake news, better insight into data on end users, exclusivity of breaking news produced by original news outlets, and so on. Indian publishers are already engaging with these issues, but this is an opportune time to up the ante — both with the tech giants as well as the government by asking for an appropriate regulatory mechanism.

In an April essay titled “The pandemic is a portal,” writer Arundhati Roy observed that, “historically, pandemics have forced humans to break with the past and imagine their world anew.” She writes the current pandemic “is a portal, a gateway between one world and the next,” and says it is up to us if we “choose to walk through it, dragging the carcasses of our prejudice and hatred…” or we can “walk through — lightly, with little luggage, ready to imagine another world.”

While Roy was talking about deep societal fault lines, the lesson is no different for other realms of life, including the way we imagine publishing.

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