Sunday, December 10, 2006

Is it time for circulation to de-grow?

I know a lot of print space sellers. Some of them are friends.
And those who are still in the business are doing well, making serious money, holidaying abroad.
And close to burn out.
Because, as they grow older in the business, the weight of the business rests on their shoulders.
Because it is, virtually, the only source of revenue for print products, considering the ridiculously low price of newspapers and magazines.
TV has distribution as a second revenue stream.
Put in other words, the consumer pays for the content.
Which the consumer refuses to do in the print paradigm.
Which gets me thinking. The same human being, the same consumer, is willing to pay for content in one medium and unwilling to pay for content in another?
What is this guy? Some kind of whacko?
Or is he simple and predictable, it’s just the print media that reads him wrong?
Will he pay Rs. 30 for a copy of India Today instead of the Rs. 20 he pays today? Will he pay Rs. 40? Rs. 50?
How many buyers of India Today will drop out if Aroon Purie jacks up the price to Rs. 50?
Ten per cent? Twenty? Thirty? Fifty?
And suppose it is as high as fifty percent; is Malcolm Mistry, the man who has the responsibility of filling the magazine with advertising week after week, a happier man?
And what happens if The Times of India is priced at Rs. 10 per day? How much will they lose in circulation? Fifty percent? Sixty? Seventy? Fifteen?
And suppose it is fifty percent, would Bhaskar Das be a happier man?

It depends, primarily, on two stakeholders: the consumer and the advertiser.
It depends on how reliable, authoritative, relevant and trusted the consumer perceives your content to be. Which is the simple truth in any product category: the consumer pays a premium when he believes that brand delivers a premium product.
It depends on the media owner’s answer to this question: while we have built a brand for the advertiser, are we a brand or a commodity vis-à-vis the consumer?
It depends on how the media planners and buyers and advertisers deal with the new circulation and readership numbers. Which, today, come from ABC and NRS and IRS.
Which they take with spoonsful of salt.
And in a number of cases, as the publications do not subscribe to ABC, they are left with just NRS and IRS.
Which, as history teaches us each year, is full of holes.
So why not bite the bullet if you have a product that you believe delivers value to the consumer? And raise the goddamn cover price?
Don’t gamble and endanger a product you might have taken decades to build. Don’t endanger the well being of the thousands who depend on your paycheck.
Do it as the Udipi restaurants across the country do. No disruptive changes in the prices, just keep nudging them upwards.
And, each time you raise the price, analyse the impact. Every six months, reduce the advertising rates.
Yes, reduce them, in keeping with the loss of circulation and readership.
You keep doing this till you have your balance. And a significant portion of your overhead comes from content, not advertising. And your dependence on the advertiser is significantly reduced.
And now, start increasing the advertising rates.
Because by this time, you would have more involved, more loyal consumers than you have at present. Who will significantly revise time-spent figures on the next NRS and IRS. Who will notice the advertising and who will have the propensity and the income to buy the products and services advertised.

I know, I know, I live in Utopia.

But it will happen. And when it happens, I will be able to say to all of you: I told you so.

1 comment:

Ranjan said...

Frankly I'm no fan of media and advertising industry. True, they spend their time and energy in fooling "fools" who lap up media news and advertising.

But I see some thoughts behind yr blog and wd love to learn more abt media and advertising.

Do u think the net will be the most important media in times to come?