Indian newspapers receive further support

08 July 2009

NEW DELHI: The Indian government has extended the duration of its current "stimulus package" for newspapers in the country by a further six months, as the medium's ad revenues continue to decline in the economic downturn.

Recent forecasts from ZenithOptimedia and GroupM both predicted that total adspend levels will rise in India this year, but Webchutney expects print ads sales in the country to fall by 16.5% in 2009.

In February, the national government announced it would increase the rate it pays for newspaper ads by 10%, and also waived the normal 15% agency commission it charged on these executions.

While outlining the country's latest budget, Pranab Mukherjee, India's finance minister, said that "since print media is still passing through difficult times, I have decided to extend the stimulus package for another six months."

However, when the original proposals to provide "special relief" to the newspaper industry were passed, it was argued the Directorate of Audiovisual Publicity (DAVP), which places ads for the government, paid around 90% less than commercial clients for ads.

Ravi Dhariwal, chief executive officer of Bennett, Coleman & Co, which owns The Times of India and Economic Times, said the DAVP's rates remained "way below" the normal figure.

This means the "stimulus package" is of limited use, as "only if the ad rates are revised and linked to the rest of the market rates would the government ads be worthwhile for the print industry."

Colvyn Harris, ceo of JWT India, similarly stated "the truth is that a 10% to 15% hike or reduction turns out to be nothing but a notional benefit."

Annie Joseph, secretary general of the News Broadcasters Association, also argued that the limitation of financial support solely to print media was "discriminatory" against the broadcast sector.

Apurva Purohit, president of the Association of Radio Operators of India added that "nothing has been done to address the revenue loss suffered by the industry because of the economic slowdown."

Data sourced from Televisionpoint; additional content by WARC staff