Why Indian newspapers would soon be competing with your Wi-Fi router?

“There is still hope for traditional news organizations if we can make some courageous choices and recognise our own flaws.” – David Skok
As per FICCI-KPMG Indian Media and Entertainment Industry Report, 2013, India is one of the largest newspaper markets with more than 107 million newspapers circulated daily, that accounts for more than 20% of all dailies circulated in the world. The market potential is even bigger – the penetration of newspapers into the literate population of 579 million is at 30 % only.. While the global print industry business trend, especially in US and UK, were on decline, India had a promising growth story. Few points to consider:
• “The fortunes of the print industry in India are increasingly tied to those of the advertising industry, which in turn is correlated with nominal GDP growth.
• “Despite the fact that regional languages command better readership in comparison to English, advertisers have had a higher preference towards urban geographies with English newspapers catering primarily to SECA/B households as target audiences. Though the top six metros constitute only 30% of the total consumption of goods and services, roughly 60% of the media spend is diverted to these top 6 cities.

This report indicates that the top six cities and its English newspaper readers are the at the core of print media business in India. By suggesting these cities as core markets, I do not intend undermining the importance of tier II cities. These markets will certainly grow but the core markets comprising of 6 metro cities will present a different set of problems/challenges in varying strengths.

Challenges in Newspaper consumption in core markets

Prof Clayton M Christensen of Harward Business School who developed the theory of disruptive innovation suggested that newspaper organisations can effectively add more and more years to their lives by considering their audiences first. Knowing your audience is great. However, not going beyond the stated statistics and missing the opportunities of helping the audience in his ‘jobs’ (where your newspaper could be of help) could be of detrimental consequences.

Your audience today look forward to your newspaper every morning and he/she likes to be ‘with the newspaper’ while he/she prepares to get ready for work. Well, general knowledge you would say! Yes, but the trouble is that this ‘with the newspaper’ idea may slowly be changing its platform: not through the door step, but with the internet signals through the wi-fi router! No, but we are not losing any readers…..well, correct yourself – you are possibly not losing your buyers but are certainly at risk for losing readers. And at the core of this readership development is ‘engagement’. Let us look at few engagement challenges and opportunities which newspapers companies should consider and build upon for strategic longevity of this business.

Right of Way is not good enough: At an average household, the numbers of devices that can connect to internet are on a rise. It’s common to find people logged in on multiple devices- laptop, tablets et al. Therefore, right of way is a shared thing today. The question is not about whether the newspaper will be read or not….. the real issue here is, will the newspaper be the first to interact with the reader? One of the ways companies can build this up is through focussing on the extant newspaper distribution models. The objective could be to “be there before your reader wakes up” and establish the “First Right of Way”. Let your reader know that he can start his day with his newspaper and at his own pace!

Newspaper Distribution Models: Newspaper distribution in India is a very cost-effective mechanism that is fairly complex and is understood in the context of priorities of the newspaper companies. Companies need to expand these individual priorities horizons to converge on a common canvas: How to make the channel efficient in handling distribution? There are several questions that need to be answered such as: What is the state of distribution business? Are there opportunities for technology adaption? What are the pain points? What are the issues around resources? Landscapes of the cities are changing with residents increasing in high rise buildings. What are the unique challenges and opportunities?

It’s important to recognise that in our country, one of the key strength that this industry enjoys is a very low cost shared distribution model. By that logic alone, companies need to protect this and develop the channel with a common agenda- First Right of The Way.

Value creation at Distribution Channel’s Bottom-of-the Pyramid

One of the ways companies can identify and capture value at the channel’s BOP is to engage with them on a business-to-business partnership. What I am suggesting here is that companies need to make the channel realize its true business potential by partnering with distributors and newspaper vendors. Potentially, they could be a great aid to innovative selling ideas to advertisers who are looking out for ‘fragmented reach’.

Clearly, these opportunities need to be tapped immediately. Industry needs champions who can junk conventional and prohibitive ideas and build a collaborative platform to harness the true potential of value creation opportunities embedded in one of the most mundane, taken-for-granted aspect of business- the distribution channel. As for audience, they are not obliged to wait. Therefore, if I do not receive my newspapers at 6.30am, well, I may continue buying the newspapers, but for my reading I am going to reach out to my Wi-Fi router!