Will quarterly data make publishers more short-term in their thinking, a la television? Expectedly, opinions differ.
The noise is deafening. Every time the Indian Readership Survey or IRS figures come out, there is a deluge of ads claiming the number one position in a market, a genre or a city. This, then, is a good time to ask the question — do quarterly readership numbers make sense?
The answer is an ambiguous ‘No’ from publishers and a clear ‘Yes’ from advertisers, media buyers and research agencies. “Quarterly reporting of numbers makes sense only if there are huge shifts in newspaper reading habits.
Otherwise, it just puts more pressure on the print industry,” says Jwalant Swaroop, COO publishing, Lokmat Media. The Rs 386-crore company publishes, among other titles, Lokmat, the Marathi daily which is among India’s 10 most read publications.
Take a look at the accompanying graphic. There is very little variation in the readership numbers of the top 10 publications on a quarter to quarter basis. If the same data was plotted on a six-monthly or yearly basis, the variations show up more sharply and could actually induce an increase or decrease in ad spends. These are critical. Advertising brought in roughly 80 per cent of the estimated Rs 18,000 crore the print media industry earned last year. The rest came from the money readers paid to buy a newspaper.
PROS & CONS
The low level of variations is precisely why quarterly data is good, says Bharat Kapadia, founder of email@example.com. Kapadia is the former head of Lokmat and Divya Bhaskar, among other publications. His point is that the Indian print industry is not stagnant or declining, like that in the West. It is a growth story, with lots of action. There are new launches, brands, editions being done all the time. “A six-month look throws up too many fluctuations. On a quarterly basis, the fluctuations are not as sharp,” says he.
A S Raghunath, an independent print media consultant, gives an example. He points to Bihar/Jharkhand, which has seen several brand launches in the past year or so. In markets like these, a quarterly view is of immense value. That, says Suresh Nimbalkar, senior vice president, Hansa Research, is the main reason why the quarterly approach is useful. “Earlier, if a publisher or an advertiser wanted to assess the performance of a launch, they would have to wait for a year or six months.” Hansa Research is the agency doing the IRS.
So, for language publications, which are seeing the highest growth in revenues, readership and circulation, a quarterly approach probably helps. In mature genres like English, their usefulness can be questioned.
Internationally, though, all readership reporting is quarterly, says Kapadia. Is there a danger of breeding the same short-term thinking that ails the West, the quarterly reporting of financial numbers? Already, publishers are cribbing that every tiny drop in readership becomes a reason for advertisers to renegotiate contracts. This increases uncertainty and makes revenues unpredictable. “We don’t use quarterly variations as a negotiating tool, as much as we do to understand the readership trends,” says K Satyanarayana, vice president, R K Swamy Media Group. “Forget the advertisers and agencies; I think, quarterly reporting is good for the publications. It helps them plan their growth strategies, based on the trends and learnings from the market place,” says he.
The ‘market is dynamic and we need to monitor it more frequently’ argument makes a lot of sense. However, there are some inherent dangers in high-frequency measurement, not just on the revenue side but also on the content creation side. A short-term orientation has led to falling standards of content, especially on news channels. There is a demand now that rating agencies release monthly data, instead of weekly, for news channels.
Are newspapers, then, in the same danger? Will the reduced frequency of readership data put pressure on newspaper editors to do anything and everything to get eyeballs. Varghese Chandy, senior general manager, marketing, Malayala Manorama, doesn’t agree. “Unlike the TV guys, content teams in newspapers don’t bother about readership surveys. In television, even actors keep tabs on the ratings,” says he.
On TV, it is easier to track how many people were watching a show and for how long. Ad rates are fixed on the basis on cost per rating point. As competition has grown to 650 channels and counting, the rates have fallen and operating margins in the TV business are half of those in the newspaper business. The bottom line: In a hyper-competitive market, too much transparency is usually a drag.
Take the internet as another example. Too much data on a real-time basis has meant that advertisers pay only when the clicks happen. Display advertising gets the worst rates on the internet.
In print, ad rates are fixed on cost per 1,000 people reached. Outside of some basic demographics, it is impossible to know what a person read in the 25-odd minutes he spends on reading newspapers everyday. Of the three media, therefore, print is the best placed when it comes to ad rates and margins, because data frequency is not high. Why, then, would any publisher want to change that?