With the issue dated April 15, 2002, the weekly general interest magazine Outlook has increased its cover price from Rs 10 to Rs 15. Alongside, Outlook has added four new sections to the magazine. These are Lifeline (a one-page section on medical sciences), State Scan (a two-page section), Personal Finance (one-pager) and International Slipstream (a one-page section on international news).
"We have been holding on to the same price for a very long time. It was time we revised the pricing," says R Rajmohan, vice-president, Outlook, which was launched in October 1995 with a print run of 50,000 copies. "For the six-years-plus magazine, the price hike was long overdue," assesses Gopinath Menon, vice-president, TBWAAnthem. Explaining the reason, Menon says, "The growth in advertising revenue, especially in the recent past, has not been too encouraging and it made business sense to increase the cover price. It is time that media brands dictated a price for their offering. Till now, the cover price of magazines has not really been the main revenue earner as it is always the advertising revenue that more than offsets the losses incurred with increasing circulation."
The magazine, it seems, is fighting on two fronts to tackle declining revenues. Besides increasing the cover price, it has increased the card rates as well. According to an industry source close to agencyfaqs!, Outlook's ad revenue last year dipped by approximately 10 per cent. Which may be one reason why the magazine decided to up its advertising rates by 18 per cent this year (April 1, 2002), compared to last year's (2001-2002) 14 per cent. Whereas, the magazine's biggest competitor India Today plans to increase the card rates by 10 per cent starting May 1, 2002.
Considering that almost 60 to 70 per cent of the magazine's revenues come from advertising, the Outlook brass is hoping a price rise will help arrest the decline in revenues. As a Delhi-based media analyst puts it, "Owing to the overall state of the media industry, poor revenue generations have put the publication under pressure." But opinions differ on whether the gambit will pay off.
According to TBWAAnthem's Menon, Outlook has made the right move. "Since Outlook has always been subscription-skewed, I do not know how it will affect the subscribers who subscribed two years ago. On the whole, it's a good move as forced sales will taper down." Samarkant Kukreja, media director, Maximize India, does not share Gopinath's enthusiasm. "This is a big gamble. In terms of quality, India Today and Outlook are on par. So if an equally good product is available at two-thirds the price of Outlook, it's easy to say India Today will stand to gain." Kukreja adds, "The publication is obviously betting on its loyal base of readers for whom price is not an issue."
This criticism does not disturb Outlook. For the magazine, it is a bold and gutsy move to 'keep up its style'. "Outlook was launched as a weekly, priced at Rs 10. It made every other magazine sit up, take notice and change their strategies. At the cost of being immodest, we dare say that we have been trend setters in everything that we have done at Outlook - price, periodicity, production values, metro editions, path-breaking stories," retorts Rajmohan.
And his optimism is based on a reader feedback survey conducted in January 2002. "What came out of the survey was that 90 per cent of our readers were regular readers, while the remaining 10 per cent were casual readers. We are confident this 90 per cent will stick despite the increase in price. Outlook readers are youngish, upmarket and not price sensitive, and they believe in the quality of the magazine," says Rajmohan.
Outlook's move has brought India Today under the spotlight. The big question is: How will India's largest selling general interest magazine react? Media folk feel India Today will follow suit. A feeling corroborated by history. "Historically, India Today has been responding to changes spearheaded by Outlook," says a senior media planner. When Outlook was launched in 1995 as a weekly at Rs 10, India Today was a fortnightly priced at Rs 15. By June 1997, India Today had changed to a weekly and slashed its price to Rs 10 from Rs 15.
Menon feels India Today stands to gain more if it decides to increase its price. "India Today enjoys almost double the circulation base of Outlook. It should not let this opportunity pass by. A price rise may result in a drop in circulation in smaller towns as India Today is not so metro-skewed and depends more on stand sales. But this drop in circulation should not be a deterrent as media planners park their money based on readership numbers, which, I believe, will not slump proportionately."
Menon's reasoning is based on the following numbers. According to ABC figures for the period July 2001- December 2001, the circulation figure of Outlook stands at 2,47,000 while that of India Today for the same period stands is much higher at 4,41,000. The subscription base of Outlook for July-December 2001 it is 1,18,000 and that of India Today, for the same period, is 1,47,716. In terms of readership too India Today enjoys a big lead. According to NRS 2001, Outlook's readership stands at 1.6 million, and that of India Today is 5.7 million.
So, whether Outlook's gamble will pay off will be clear in six months' time. What will be more interesting is to see whether this move by Outlook will trigger off a magazine war like the one we have seen between Outlook and The Week in Mumbai last year. © 2002 agencyfaqs!