MUMBAI -
India's newspaper readership happily grew over the
past year, according to the country's annual
National Readership Survey (NRS) 2006. But it also
found that magazine readership is down, television
viewing is up and, controversially, Internet
growth has slowed.
The largest media
exercise of its kind in the world, the study
sample involved an unprecedented 284,373
house-to-house interviews in 7,000 cities and
towns and covered 535 publications
- 230
daily newspapers, 305 magazines - all to provide
data critical to India's US$2.8 billion
advertising industry.
The survey revealed
that daily newspapers continued to grow while
desperately battling turf threats from the
electronic media. They had 203.6 million readers,
a 12.6 million addition since 2005. Eighteen
dailies crossed the 5 million mark, but just one
of them is in English, The Times of India (7.4
million). Suffering acute poaching of marketing
and editorial talent by newcomers such as Daily
News and Analysis, The Times of India's readership
ranking dipped from No 9 in 2005 to No 11.
The biggest surprise was the relatively
small rise in Internet usage, with NRS reporting
users growing from 7.2 million to 9.4 million,
with Internet homes showing a questionably small
growth from 1.3 million to 1.5 million.
"The NRS survey seems to have
underestimated Internet-users growth in India,"
Vijay Mukhi, president of the pioneering Internet
Users Club of India, told Asia Times Online. "The
more accurate number would be double of last
year", to be about 14 million.
Mukhi,
among the first to get an Internet connection in
India in the mid-1990s, listed reasons Internet
users are far more numerous than claimed in the
survey: "The increase in laptop owners, with many
laptop users having a wireless 'Net connection;
increase in telephony usage with providers such as
Skype, video conferencing, downloading of music,
videos, ring tones and so on. There is a quantum
jump in Internet usage. The problem with such
surveys is they tend to see Internet usage as
being elitist."
Realistically, India's
online market ought to reflect trends across the
border in China, where online advertising
surpassed the print media last year.
Shanghai-based iResearch estimates that China's
online advertising market could reach 4.6 billion
yuan ($578.6 million) in 2006, up 48% from 2005,
and exceed $1.9 billion by 2010.
Most
Indian advertisers, including medium-sized
agencies, hesitate to recognize Internet value. "I
see the Internet as still in a nascent stage in
India," said Abhijit Bannerjee, managing partner
of the Mumbai-based Wavelength Communications
(current annual billings at $2.58 million). "If I
spend Rs10 crore [$2.1 million], my Internet spend
would be just Rs5 lakhs [$10,787]." ("Crore" is an
Indian term meaning 10 million, while "lakh" means
100,000.)
Bannerjee says the advertising
community has to go by the NRS figures, with some
media planners cross-checking numbers with the
alternative Indian Readership Survey (IRS). The
problem is that industry insiders accuse almost
every top publication of manipulating circulation
figures. "We know they do it," said Bannerjee,
"but without proof, who can nail them?"
A
common ruse is to have two or three fake
distributors picking up 50,000-60,000 copies from
the printers ("who knows where these copies get
dumped?" wondered Bannerjee), with the fraudulent
figures duly picked up in circulation audits.
Another trick is to include institutionalized
circulation, the anonymous non-paying readership,
through making free copies of newspapers available
in educational institutions and in public places
such as airports.
However, the print
media, the survey found, are being overrun by
satellite television. TV viewership was placed at
230 million, a 23-million jump from 2005. With
more than 200 TV channels and quality talent in
short supply, India's TV professionals are also
making hay, with top soap-opera stars reportedly
being paid $1,000 for a day's work.
Salary
costs turned out to be the downside of media
growth, according to the Associated Chambers of
Commerce of India (Assocham), an apex industry
body with 100,000 companies and professionals as
members.
"Among the media firms the
overall rise in the net profit for the quarter
under review is merely 4%, whereas the figures for
the rise in staff costs was over 29%," said the
Assocham report. "Balaji Telefilms [India's major
TV soap factory] faced a severe rise in its staff
costs of over 251%. Firms like Cinevistaas, UTV,
Zee Telefilms, Mid Day Multimedia and TV Today saw
huge drops in their net profit, partly because of
enhanced expenses on employees."
This is
offset by the trend of Indian advertising
filmmakers grabbing outsourcing work for overseas
clients. Tribal DDB, the digital marketing wing of
India's communications major Mudra, recently won a
million-dollar account to manage British Telecom's
(BT) global business-to-business online
communications. Percept Profile won communication
strategy duties for Nissan LCV, and top agency
Ogilvy & Mather turned out award-winning work
for Perfetti, an Italian confectioner. The global
advertising outsourcing market is estimated at
$280 billion.
"Tribal winning the BT
account shows the coming of age of the Indian ad
industry's strategic and creative thinking," said
Madhukar Kamath, chairman of Mudra.
Kamath, also vice president of the
Advertising Agencies Association of India, whose
members account for almost 80% of the Indian
advertising business, felt that "perhaps the first
wave of the outsourcing contracts is for the jobs
that are location-neutral".
The warning comes
from an Assocham report saying China, the
Philippines, Malaysia, Singapore, South Africa and
Australia are seriously challenging Indian
agencies. Mahendra Sanghi, president of Assocham,
releasing the report "Outsourcing in Advertising:
Is India the Destination Next?" this year, said
these countries offer a better infrastructure and
a single-window clearance.
(Copyright 2006
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