Newspaper Ad Spend In USA & What India Can Learn

There’s a lot that the newspaper industry in India can learn from what’s happening in US

The newspaper industry globally is in deeper mess. According to recent data released by the Newspaper Association of America, total newspaper ad spent fell another 7.3 percent in 2011 to reach $23.9 billion, getting to a low that was last seen in 1984. This data was seen despite the overall growth in media ad spent by 0.8 percent last year.

Yet what has proven to be the biggest disappointment is that the rate of decrease of spending in the last year was faster as compared to 2010 and stood at 6.3 percent. And it is the print edition of newspapers that are suffering the most. Print ad revenues reduced a whooping 9.2% last year. Even classified ad spent fell by 11 percent.

However there was a bit of good news in the horizon as well. Online advertising on newspaper brands was up 6.8 percent reaching a total of $3.2 billion.

Experts have been talking about this decline in newspaper ad spent for years. What they were desperately hoping was that the rate of increase of online revenue would match this rate of decline. However that has not happened, leaving newspapers more worried than ever about their future.

This lack of ad spent in newspapers has been observed in most of the developed world. India, compared to these figures of the US or the rest of the developed world, provides a very different picture. In India, the print industry grew by 8.4 percent from 2010 to 2011 i.e. from Rs. 193 billion it grew to Rs. 209 billion (all figures from the FICCI-KPMG India Media and Entertainment Industry Report 2012).

Even advertising revenue grew 8.7 percent while circulation revenue grew 3.7 percent. Thus unlike many global markets, India continues to show a growth in the newspaper industry every year. With literacy levels going up and more people being added to the target audience of newspapers, this healthy growth is expected to continue another five to ten years.

courtesy: http://www.mediavataar.com

The Indian newspaper industry it seems has nothing to worry about. That is surprisingly not the case.

In many other things, like information technology, India has had the opportunity to leap frog to the advanced technology rather than struggle with creating it. A similar opportunity is staring at the face of the newspaper industry.

Globally, since the last half a decade, newspapers have struggled to retain their foothold in the changing times. With most people shifting to reading their news on newer devices like tablets and even smart phones, this decline will be further intensified. This has forced the industry to adapt to the changing times. Many have made mistakes but some clear patterns of what the industry should do to survive is emerging.

Thus the smart Indian newspaper would be the one who would not wait for the situation to get dire. Instead looking at where newspapers are going globally, they will be ready when their time comes. They’ll have invested in the infrastructure required to be ready for the future. Indian print industry is thus in the midst of exciting times, where they can learn from the mistakes of their global counterparts and avoid getting into the mess they have gotten into.

Indeed in the next couple of years, this will no longer remain a choice, but will become a kind of necessity and the one who will adapt the quicker, will not only survive, but thrive.

End of advertisement-free viewing for HD viewers !

Broadcasters are trying to recover investments in setting up HD feeds, say media experts

Television audiences in India may soon find themselves at the receiving end of the battle brewing between broadcasters and advertisers over selling inventory on the high-definition (HD) feeds of their existing channels, bringing to an end the almost ad-free viewing experience they currently enjoy.

Broadcasters are to soon begin showing commercials on HD channels, according to ISA. ISA regards the HD feed as another distribution channel similar to direct-to-home (DTH) or cable without any difference in programming or show timings.

“An advertiser is already buying commercial time on the same programme at the same time on standard definition. Besides, in most developed markets, broadcasters do not book ads separately for standard and high definition feeds.”

said Bharat Patel, chairman of ISA, which has 200 advertisers as members.

Although broadcasters agree that most of them carry the same content on two feeds, they say that the channels are distributed separately and hence need to be treated thus.

The dispute isn’t bringing much comfort to consumers who are already complaining that ads are not restricted just to the free-to-air standard-definition channels and also carried by those that are pay. HD subscribers are further irked by the prospect of commercials because they currently pay twice the normal rate for the privilege of watching higher-resolution pictures. The HD set-top box costs double the SD box and subscriptions are costlier as well.

“If HD channels start airing commercials, then I want a reduction in my channel subscription,”

said Ashish Tiwari, a Mumbai resident.

Ankul Barar, who lives in Delhi, said,

“If broadcasters are going to air ads then, since we pay a premium on these channels, we may as well have just one ad break in one hour —like when we go to watch a film in a cinema hall.”

Shailaja Bajpai in Bangalore is angry at the thought of ads interrupting her viewing on channels she pays more for. Still, she spends most of her time on Discovery HD, which plans to remain ad free.

“Discovery HD content is entirely different from programming on Discovery in standard definition. The HD feed is not meant to carry ads,”

said Rajiv Bakshi, vice-president, marketing, Discovery Networks Asia-Pacific.

Other channels aren’t planning to keep ads away from HD.

Media experts said broadcasters are also trying to recover their investments in setting up HD feeds, which cost more to transmit as they occupy greater bandwidth. Besides that, HD programming is also more costly to make.

(courtesy: Aminah Sheikh & Mint)

Trai for Better Telly: But why stop at limiting ads on TV channels?

Some might welcome the Telecom Regulatory Authority of India‘s (Trai) proposals to limitadvertisements on the telly. Watching the idiot box often seems like catching an occasional glimpse of a programme amid the cacophony of ads. Revenue, after all, is God for channels.

And Trai might just leave them cussing all the way out of the bank. One can imagine someone at Trai, taking a break from drafting the consumer verification norms, or the spectrum auction guidelines, or the rural telephony subsidy directives, turned on a TV set, and felt more rules were needed.

Here are some additional modest proposals: if improving the TV-viewing experience is really on Trai’s priority list, it shouldn’t stop at limiting the number of ads aired per hour. A limit on the decibel levels in TV discussions comes to mind – anchors who exceed the limit can be banned from the airwaves or be forced to broadcast the quietest of their rivals instead.

Let’s also set an upper bound on the amount of screen real estate dedicated to graphics, charts, news tickers and screaming headlines. And rules for how many ‘windows’ any channel can use during a group discussion – say, two for entertainment and sport, three for general news and under half a dozen for business news. And let’s restrict the number of times ‘Exclusive’ or ‘Breaking News‘ can be used to once a day.

Trai suggests scheduling of ads only during interruptions of play on live sporting events – but why stop there? Why not schedule ads only during the boring parts of live news events? Viewers would also appreciate smaller logos of broadcast sponsors – could Trai mandate that they be smaller than the main newscaster’s head? Throw in a restriction on the number of times sportscasters can mention their sponsors, and this policy would be much improved. Savvy, Trai?(courtesy: Economic Times.)

proposal to cut ad time irks TV channels

Advertising advertising

Advertising advertising

Irritated by those frequent commercial breaks between your favourite programme on TV? The Telecom Regulatory Authority of India (TRAI) has taken note of viewer irritation and has come up with a proposal to regulate the duration, frequency, timing and audio levels of advertisements.

But broadcasters are not amused by the proposal to put limits on advertising, contained in the telecom and broadcasting watchdog’s consultation paper on issues related to advertisements on television. They fear their main source of revenue will be badly hit.

Mr Paritosh Joshi, CEO, Star CJ and Director, Indian Broadcasting Federation, said, “TRAI has no business to meddle with the duration of ads. The objective of each channel is to make profits and it should work on the principles of free market.” TV channels get 60 per cent of their revenues comes from advertising.

But TRAI says that broadcasters are ignoring current rules. TRAI in its paper points out that free-to-air channels should not carry ads exceeding 12 minutes an hour (this includes 10 minutes of commercials and two minutes of self promotions) and pay channels not more than six minutes of ads per hour. For live telecast of sporting events, ads should only be carried during actual breaks. These limits exist in the current rules, but are observed more in the breach.

TRAI has also pointed out that news and current affair channels cannot run more than two scrolls at the bottom of the screen, occupying a maximum of 10 per cent screen space. It also says that ads should not in any manner interfere with the programme use of lower part of screen to carry captions, static or moving alongside the programme

SELF REGULATION

Ms Mona Jain, CEO, Vivaki Exchange, feels that some channels do require regulation in the way they screen ads. But the industry favours self regulation.

Mr Joshi said, “Channels will exercise self regulation as they know that consumer eyeballs will go away if they were to show more ads and less of content.”

“While there should be a guideline and cap on ad durations, broadcasters are sensible enough to know where to draw the line and not to go overboard,” said Mr Jehil Thakkar, Head – Media and Entertainment, KPMG.

WILL AD RATES GO UP?

If the TRAI proposal goes through, will it force channels to raise ad rates? Ms Jain of Vivaki says, “Channels will want to make up for money lost due to reduced air time. But to raise rates, one will need to have commensurate increase in ratings.”

Ms Jain also points to innovations that some channels have done to make the audience stay during the ad breaks, by putting a stop clock on that shows how long the break is going to be.

She says, “Channels need to figure out how to make viewers stay during the breaks to increase rates.”

Analysts such as Pinc Research say that it is unlikely that broadcasters would allow the proposal to be implemented. TRAI has asked stakeholders to send their comments to its proposals by March 27. (courtesy: Business Line)