T.N.

Ninan: India's Newspaper Business is Not Disappearing Just Yet

Inflated newsrooms and the Internet caused the news business model to break down in the West
by TN Ninan | May 30, 2011 |

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T.N. Ninan An Award-winning journalist and one of Indias most respected economic editors, T.N. Ninan is editorial director of Business Standard newspaper. He was editor of the newspaper between 1992 and 2009. Before that, Ninan was the editor of The Economic Times and was responsible for establishing it as a leading financial daily. He has also been the editor of Business World magazine and executive editor of

India Today Did you know that the total share of the English news media in television is 0.7 percent of all
Image: Sanjay Sakaria/Businessworld

TV viewing in the country? Yes, thats much less than 1 percent.

T.N. Ninan, Editorial Director, Business Standard

News channels, across all languages, have only a 7.7 percent share. That includes business news, plus all the time that you spend watching the tribunes of the people: Arnab Goswami, Barkha Dutt,

Rajdeep Sardesai, Rajat Sharma and whoever are the heroes of Tamil, Bengali and Marathi TV news. What about the cricket World Cup finals in Mumbai a couple of months ago, with the home team playing and winning? The total TV audience size has been estimated at 67 million interestingly, thats barely 10 percent of the total reach of television (about 630 million). If you take the total TV universe, therefore, it is much bigger than the universe of newspapers, which are read by 325 million people every day. Also,

people spend only a quarter of the time on newspapers that they spend in front of a TV set. Multiply readers by time spent, and newspapers account for only about 12 percent of the total time spent on the two media. But TV news accounts for only 7 percent of all TV. So, believe it or not, the newspapers still occupy a bigger mindspace than news TV does. Even more important, established newspapers are much sounder businesses, being more profitable than even the leading TV news channels, which are being killed by excessive competition. Does anyone

believe that there is room in the market to sustain 120 news channels? Welcome to the capital of the worlds free (and growing) press. Newspapers sell twice as many copies in India as they do in the United States, and much more than they do in Japan. Unlike those markets, the newspaper business in India is also growing more titles, more copies sold, more journalists hired. What about the challenge from the Internet? Well, guess what... the total number of Internet users in India is about 90 million. And of that, only half have

broadband connections. In any case, when they surf the Net for news, where do they go? To the newspaper websites, of course! Yes, there are aggregators like Rediff and Sify, which offer content syndicated from the main content producers. You also have mail sites like Yahoo that offer news as a part of their package. But if youre into news, you want to go to the sites managed by the experts in the news business which means newspapers and TV companies. Why, even if you want to go into classified advertising, the leading real estate site in the country is magicbricks.com (run by

who else the Times group, of course). In short, dont assume that just because newspapers are dying in the US and Europe, the same thing will happen here or will happen five years down the road, when Internet usage grows. The truth is that newspapers in the US were asking for trouble for a long time, and they got it. The Los Angeles Times used to have 1,200 editorial staff, The New York Times about as many, and The Washington Post 900. Between the three of them, in their heyday, they had some 3,300 journalists, and sold a combined total of about 2.7 million copies. In

comparison, The Times of India has 1,000 journalists on its payroll, and sells 4 million copies. There was also the ridiculous pricing of newspapers. The New York Times, for instance, raised its cover price three times between 2007 and 2009, doubling in the process to $2 (about Rs. 90). For one days NYT, you can get nearly a whole months supply of the ToI. The amazing thing of course is that the paper that charges Rs. 90 for a copy loses money, while the one that charges Rs. 3.50 makes money. The revenue structure is comparable 70 to 90 percent of a

newspapers revenue, whether in the US or in India, comes from advertising. And the US spends a far higher proportion of its GDP on advertising than India does. Yet, most American papers have been losing money. That gives some idea of the bloated costs of American newspapers not just the number of journalists, but also the other costs, including those flowing from poor productivity.
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