The COVID-19 pandemic will result in an irreversible adverse structural shift to India’s already struggling print industry — not only in terms of financial loss, but also as it disconnects the established chain publications have enjoyed with readers over the years.
As we already know, print media in its current form faces an existential threat because of dwindling revenues and the high cost structure. Events like this only worsen matters for the business.
The shifts that are likely to impact the business models are:
Readers get used to accessing online content, which is coming to them almost free, and do not resume print subscriptions when the business returns to normalcy. Getting back the original numbers will be difficult. For most customers who have been loyal to the established publications over the years, the renewal of a subscription every month is automatic, as they are habituated to reading a particular brand of newspaper. No one would have even thought of discontinuing it, and this loyal base of customers take care of the current revenue stream to a great extent.
Yet this segment of the readership base sample alternate avenues in the digital medium in the current circumstances and may actively engage with some of the alternatives they discover. This is likely to pose a threat to retaining the existing customer base, and any amount of push to get the original subscription may not give the desired results.
Advertisers shift to an alternate medium, especially to the digital medium, which will further be accentuated as the numbers’ support and the results from the print medium (ROI) would be under question. Hence, there will be lot more pressure on yields, and they reach unsustainable levels like the telecom industry.
These two factors will put the print business under threat if the business model is not reengineered and reworked.
Does this mean end of the road for print? Not necessarily — if managements respond in a strategic manner with a clear understanding of how print can co-exist with digital and television. But it will no longer have the superior returns, revenue, and margin comfort it gave in the last decade.
Exploring an alternative business model
Some pointers and questions based on the current situation to rework on the business model are:
- Do publications truly have the data of readers in a manner it is required today, and do they have strategies to monetise that information the way an e-commerce company does? Why isn’t there any effort to leverage this strength to generate additional revenues from the loyal readership the publications enjoy?
- How many regional publications have worked on different coverage and presentation styles after digital news started proliferating through various platforms? How are publications adding value to the already commoditised news? Since there is no differentiation, readers don’t view it as adding value to them in any manner.
- Publications provide curated content, which is true. But are publications able to distinguish that from what is already available and to communicate in a manner that reader values and pays for it?
- For many years, print media sold advertising space based on the industry-defined parameters (as it was a seller’s market), but not so much on the market-determined parameters. As the shift to ROI took place and it turned out to be buyer’s market, the existing publications could not really come up with an acceptable model which would have been a win-win for both. The mindset shift from rate card/discounts to value-enabling engagement has to take place. This requires a significant shift in the thought process and associated management practices.
- Do publications have tracking parameters that are truly reflective of today’s business conditions rather than chasing just the number of copies at any cost, without a scientific link established to the response?
- Sustainable innovation is key to the future success of any business, and we have yet to see one from the print media that is based on future requirements and is self-sustaining. No wonder most aggregators thrive on the content generated by print media companies and enjoy sky-rocketing valuations, whereas the cost burden is on media houses.
This is not to say that all publications are in the same league, and certain possibly successful initiatives are taken by some publications (especially the English publications). It is probably a matter of time before others wear their thinking hats and reshape the industry, which otherwise enjoys tremendous clout and recognition among various sections of the society.
I am sure the industry will borrow a page from other industries that are also facing huge transformation challenges and will come out with flying colours.