Media slowdown: ABP goes for price hike

Media behemoth ABP Pvt Ltd which runs The Telegraph and Anandabazar Patrika has decided to raise cover prices of its Bengali daily and newly launched tabloid E bela. The price hike is in the range of about 25% which would be effective from September 9.

The move comes from the media giant on the back of rupee’s freefall as importing newsprint for the newspaper is hitting margins hard. 40% cost of any newspaper primarily accounts for its newsprint, said D D Purkaystha, managing director and chief executive officer at ABP Pvt Ltd. Over a million tonnes of newsprint is imported per annum by media companies operating in the print arena.

India’s biggest media house Bennet Coleman and Company Ltd which runs The Times of India and recently launched Bengali news daily Ei Samay is playing it safe and not going for a hike in its cover price as of now, according to a circulation official of the group. A TOI insider said holding on to current price was primarily on the fears of loosing out on circulation. The cover price of Ei Samay was slashed by almost 50% to Rs 2.50 in April to compete with market leader Anandabazar Patrika. The Hindu run by Kasturi and Sons Ltd has also undertaken price hike in select markets.

Terming the current economic gloom worse than India’s 1991 financial crisis Purkaystha said, “This is inevitable. All successful Bengali dailies would eventually have to raise prices because newsprint has become way expensive as the rupee continues to be feeble,” he said.

Sounding concerned about the dip in circulation of E bela, he said, “When the economy is in such a state, it is least likely that people would subscribe to multiple papers. If needed, one might have to cut down on the number of pages going forward.”  E bela has a circulation of over three lakh copies, he indicated.
 

Advertisements, a key vehicle for generating revenue, are also having to pass through a rocky road as companies are continuously squeezing their spends on advertisements. The Times of India has already raised its rates for advertisements in the paper.

Many news dailies and magazines have been cutting on the number of pages recently and a number of magazines have shut shop. ABP group’s business magazine Businessworld is also on the block for sale.

The scenario in television channels is no different. Network 18 laid off about 500 people a month back while NDTV Profit also went under massive restructuring. The 12 minute ad cap an hour regulation by the Telecom Regulatory Authority of India is giving a tough time to television channels. The matter is however sub judice now.

According to Purkaystha, a revival in the industry is not on the horizon before 2015 and revenue growth would be under pressure, which is likely to result into a muted annual hike for its employees across the verticals.