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Cost/Price Sensitivity of Customers
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How Generational Differences can explain the Corporate Governance Issues in Infosys
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Outdoor Advertising – Billboards, Buses, Cabs, Subways and Walls
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The internet macro-environment
Introduction An organization is often influenced by the environment they work under. There are several factors which influence such as customers, suppliers etc of the micro environment can be controlled to a certain extent by the organization. The nature of micro environment is very much dependent upon macro environmental factors. The macro environment consists of […]
While the newspaper industry is failing around the world, it is thriving in India. Whereas newspapers worldwide are facing dwindling readership because of the advent of internet media and mobile media, the situation is the other way around in India where access to the internet is still not as pervasive as in the West.
Further, newspapers worldwide cost more (on a purchasing power parity basis) whereas in India, they cost much less. The reason for this is the fact that newspapers in India are made from recycled newsprint, which means that the paper you read, and sell to the scrap dealer eventually makes it way to the paper mills where it is recycled. This means that the cost of the newspaper purely based on the newsprint is cheaper in India. Apart from this, the Indian government subsidizes the newsprint products, which means that on an average, newspapers in India cost less than your average expense on a cup of Tea. In the west, the situation is opposite to this, as newspapers are not subsidized for their newsprint expenditure as well as the fact that recycling of newspapers does not translate into the same recycled newsprint being used for further printing.
If we take the firs aspect that was mentioned above, the penetration of the internet and more recently, mobile smartphones and other digital gadgets is so pervasive that many people prefer to read the news online or on their Smartphones and gadgets. On the other hand, in India, many people lack access to the Internet and though the mobile revolution is well and truly underway, smartphones are still expensive by Indian standards. Therefore, the only way for people to catch up on the news apart from the TV is through newspapers. Apart from this, the fact that many regional newspapers thrive in India where the number of regional languages runs into the dozens means that for many people in towns and the rural areas, the newspaper remains the primary source of information as even now the regional TV channels do not cover all areas.
Newspapers in India are also read widely because of the fact that advertisers have realized that they are the dominant mode of reaching out to the masses and therefore, it would be prudent for them to spend their advertising budgets on newspapers.
We have discussed the advent of the internet, the cost of newsprint, and the presence of regional language readers as the reasons for the contrasting situations in India and the West. The other aspect is that newspapers in India are delivered free of cost to the doorsteps of the readers unlike in the West where the delivery charge is separate.
Further, the newspapers in India in recent times have become more like brands rather than news outlets as media houses like Bennett and Coleman that own The Times of India group increasingly position their offerings as brands that can be consumed in the same way one would consume other goods.
In other words, the shift in emphasis from treating the newspaper as a source of news and views to one that merges the news with the advertorials means that the readers are no longer simple purveyors of information but rather consumers who have brand loyalties and preferences in terms of content. These are some of the reasons why the newspaper industry in India is thriving whereas the newspaper industry around the world is failing.
Finally, this article has covered the reasons for the contrasting situations without debating the pros and cons or the merits and demerits of the business models of the media houses in the west and in India. These need to be discussed as well and they would be covered in detail subsequently.
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