What's the digital future of print in India?: Harjiv Singh

The internet is about to dynamically change the publishing landscape in India, just as it has in other markets around the world

The newspaper business in India is booming. Late last summer, Foreign Policy magazine quoted a government article, estimating the total number of circulating newspapers in India (in English and regional languages) at more than 62,000.

Newspapers might seem to be in their heyday; but, if you'll pardon the pun, the writing is on the wall. The internet is about to dynamically change the publishing landscape in India, just as it has in other markets around the world.

According to internetworldstats.com, as of November 2008, India had 81 million internet users, a penetration rate of 7.1 per cent; and as of March 2008, just over three million with broadband connections. A 2009 study by Akamai Technologies reported that India "has an average internet connection speed of just 772 Kbps, compared with the global average of 1.5 Mbps."

Those numbers may seem small now, but widespread broadband adoption is inevitable. The question is: when will the digital transformation take place? How much longer will the print model continue, and where? And will Indian publishers be able to create a profitable model for online consumption of news content, just as it has with its print antecedent?

The mass switch to online news consumption in India has already started. A recent study by comScore (a marketing research company) on the consumption habits of Indian internet users reports that the traffic to online news sites has reached a record 15.8 million -- an increase of over 37 per cent from last year. This figure also represents almost 44 per cent of the total online population of India.

Young consumers, especially those who read English, are rapidly migrating to online news sites. The chart depicts readership growth with a sampling of popular online news outlets in India.

Most of these users are getting their news online for free. Once the "free" barrier has been breached for a particular product, it's very hard to turn people into paying customers. Chances are someone else will have to pay the bill for online news, such as advertisers. Otherwise, the very nature of publishing might have to change, with "publishing" companies offering online content for free, in an effort to build their own brands to sell other products and services.

That leaves the advertising model. Right now, advertisers still prefer online publications' digital cousins. Many digital outlets have slashed the prices they charge for advertising, deriving smaller fees from a greater number of advertisers. The online display advertising industry is expected to clock Rs 430 crore, according to a study by the IAMAI (Internet and Mobile Association of India); while the education and print media sectors anticipate 76 per cent growth in ad spend.

As more readers put aside their newsprint for smart-phones and computers, however, the pricing power of print publishers will likely decline. Further, many industry watchers wonder whether online advertisers will ever be able to command the rates that print outlets do now.

Speaking of smart-phones, the average tele-density in India is approximately 44.87 per cent, which translates into 525.65 million mobile users, (source: Shri Gurdas Kamat, communications minister of the state of Orissa), substantially higher than the 35.8 million (source: comScore) broadband subscribers. A government programme to provide broadband connectivity to all 2.5 lakh gram panchayats in the country by 2012 may help address this disparity.

There remain, however, barriers to online access for the masses. According to a study conducted by IAMAI and IMRB International, based on the data of a sample Indian population, 11.7 per cent of surveyed audiences said the access costs at cyber cafés were high; 8.9 per cent stated that there were no good cafés near their residences; 5.5 per cent said dial-up was too expensive; and 5.4 per cent said they simply needed more guidance.

Yet, the real challenge exists in rural areas. Many rural residents are unable to read news online, because it is unavailable in their regional language. There is also a vast disparity between the rural and urban tele-density. Recent government statistics report that tele-density in rural areas is 18.97 per cent. In urban areas, that figure is 101.38 per cent (as some people have more than one mobile connection).

Not surprisingly, therefore, print predominates in rural areas, with increasing circulation numbers for popular regional dailies such as Dainik Bhaskar. It's estimated that DB Corp publications are read by about a quarter of India's population, suggesting that there's still a sizable market for print media.

Ultimately, publishers will need to 'think globally, but act locally'. Originality and localisation of news and other information content will be essential to building and maintaining an audience. Technological advances will undoubtedly enable new forms of distribution, but content relevance will determine reader loyalty.

(The author is co-founder & CEO, international, Gutenberg Communications.)