Why are there no free dailies in India?

By , agencyfaqs! | In Media Publishing | May 29, 2006
Despite the fact that newspapers in India are the cheapest in the world, why is it that we don't have any full-fledged free daily? agencyfaqs! seeks an answer

'Mumbai Mirror' is distributed

free along with the main edition of 'The Times of India' ('TOI'). Similarly, the Mumbai based daily, 'DNA', was distributed free in the city's air-conditioned buses for the first few months of its launch. And, of course, you can pick up some of the major dailies for free at domestic airports.

A few years ago, even Mid-day had tried its luck with a free daily, when it launched a community newspaper, Metro, which were distributed free in different localities in Mumbai with a separate edition for each place. This was launched with an aim to bring in small time advertisers, who couldn't make it to the main edition.

But leaving aside these few instances and the fistful of small-time local players such as 'Neighbourhood Flash' and 'Ontrack Suburb', India is still to get a full-fledged free daily. Estimates suggest that there are around 25 million copies of free dailies being distributed around the world.

The lack of free newspapers is especially surprising when you consider that Indian newspapers are the cheapest in the world - cheaper by far than any newspaper in the developed world or even developing countries like Pakistan. In fact, many English dailies are sold for as low as Re 1 or Rs 2 - practically free, you could say. The initial subscription offers of 'DNA' and 'Hindustan Times' ('HT') in Mumbai, during their launch period, further reduced the cost of the newspaper to around 50 paise for an average issue.

When Indian newspaper publishers are offering their dailies dirt cheap, why is that till date, we haven't got a full-fledged free daily?

According to Lynn D'Souza, director, Lintas Media Group, the current model of low-priced dailies is a result of competitive pressures, rather than a deliberate attempt to develop a unique business model.

D'Souza says, "The model in India is to charge a low subscription cost and to tie up with advertisers for good consumer promotions, plus to offer huge incentives to the trade."

She points out that the free dailies that exist abroad genuinely operate on a different business model, from the type of editorial they cover to the costs they incur on reportage, etc.

Indian media experts are unanimous in the belief that the quality of newsprint and the editorial content of the free dailies in Europe and North America are poor in quality, which might not be acceptable to either Indian readers or advertisers.

Other senior media planners such as Ravi Kiran, CEO, South Asia, Starcom MediaVest Group, are of the opinion that the mindset of Indian advertisers and media planners work against free vehicles when it comes to newspapers and magazines.

Kiran cites the example of magazines such as 'Filmfare', which have been badmouthed by the industry in the past because they offered a premium the value of which compared with the cover price of the magazine. "This mindset is really sad since they do not apply the same logic to free to air TV or radio!" exclaims Kiran.

It is said that free dailies do well in markets where the cost of a newspaper is at par or more than a can of soft drink. It also works in markets where the retail and classified sectors are well developed.

ND Badrinath, director, client services, AC Nielsen, which is into media research, concurs with the same.

He says, "The ratio of advertising and subscription revenue for an Indian newspaper publisher is 80:20. And this 20 per cent subscription revenue needs to be compensated by advertising revenue, which can come from a rise in classified advertising."

But he says, "Classified advertising is still to pick up in India. Indian consumers still rely more on word of mouth rather than classified advertising, unlike the trend in other developed countries."

But does this mean India cannot sustain a free daily model?

Bhaskar Das, executive president, 'TOI', doesn't see it happening in the next five years, not even in the case of 'Mumbai Mirror', which is being distributed free now with the 'TOI'.

Das points out that it wouldn't be correct to slot 'Mumbai Mirror' as a free daily. Rather, 'Mumbai Mirror' complements the 'TOI'. Above all, it is also sold as a standalone newspaper at the newsstands.

The biggest hindrance for a 'free' business model, according to Das, is the existence of the 'raddi' (scrap) market. He explains, "Unlike other developed countries, there is a value for 'raddi' in India. Keeping copies of free dailies at pick-up terminals such as a railway station or a bus terminus will not ensure that the dailies reach the readers. And having our own distribution network to ensure that the dailies reach the readers' homes is not financially viable."

"This in turn makes it difficult to identify the readers of a free daily, which will again create the wrong illusion for advertisers. That's why such a business model has a huge logistical problem in India."

Das adds, "By distributing the 'Mumbai Mirror' free along with the 'TOI', we can at least ensure that the daily is reaching the existing 'TOI' readers." "It's a strategic decision," he quips.

But not everyone is so pessimistic, at least not those on the advertising front.

Kiran of Starcom is hopeful that there is a potential for free newspapers in India. "As the established newspapers stagnate or shrink in their readership, and as key audience segments such as the youth are lost to other media, newspaper publishers will be forced to launch free titles to appeal to the non-readers of traditional dailies."

According to him, there is a lack of proper future focus among publishers.

Currently, many publishers are boosting their revenue by launching additional editions and increasing their ad rates periodically. But very soon, as Kiran of Starcom, says, these two initiatives will stop working.

D'Souza of Lintas is positive that India could have some free dailies a few years from now, especially in the metros and mini metros. She is of the opinion that the growth of the retail sector will drive the growth in free dailies in India.

She says, "These free dailies will be supported by these growing number of shopping malls both in terms of advertising revenue and solving the logistical problem of being a distribution centre of free dailies as opposed to the current news agent system."

2006 agencyfaqs!

© 2006 agencyfaqs!