Student Edition   Industry Edition  


These are exciting times for the media with the sector growing at a rate of 18 percent a year. The changing economic backdrop has intensified this thirst for news, as people search for information about how their lives are to be changed by new policies and new trends. More important, it has generated the ad revenue to pay for the expensive process of gathering and transmitting news. A large-scale liberalization of the telecommunications sector in the early 1990s made it possible for companies to establish the necessary infrastructure, and digital developments and the falling price of satellite technology have accelerated the proliferation of channels.

India is going from a developing economy into a developed one, and the media are leading that change. Spending on TV spots is expected to increase by nearly 12% in 2005, almost twice the global average of 6.7%. And ad spending in print is expected to grow as much as 25% this year, to $2.1 billion, compared with 3.8% growth worldwide.

There's also plenty of new investment money sloshing around. Last year, New Delhi changed rules barring foreigners from the sector, allowing them for the first time to hold up to 26% of Indian news media companies. That has led to a wave of investment. In the past 18 months, Indian media ventures have raised about $300 million in foreign funds, and an additional $250 million is expected soon.

Money is pouring in from the public as well. IPO announcements by media companies have received a tumultuous public response. Four IPOs have already been announced this past year and three more, including one by the Express group are scheduled. Most recently the Hindustan Media IPO, promoters of The Hindustan Times group, was over-subscribed three times, while earlier the NDTV IPO was oversubscribed 17 times.

That extra cash means more competition is on the way. Even as Zee TV helped launch DNA, print-media stalwarts are aiming to get into TV or expand into new regions and languages. The Times of India is planning Times Global Broadcasting, a venture with Reuters Group PLC, while Hindi-language Dainik Jagran has joined forces with the Irish Independent to launch Channel 7, a nationwide Hindi-language news channel. Calcutta paper Ananda Bazaar Patrika is a partner in the Star News venture, and South India's highbrow English daily, The Hindu, is planning a Bombay edition.

With so many players, there's bound to be a shakeout. The country is already awash in newspapers: Some 55,000 publish in two dozen languages, and nearly 2,000 of those are dailies, according to government statistics. Although most are tiny local-language operations, the biggest are substantial by any standard. Dainik Bhaskar has 18 editions and a combined circulation of 1.7 million, while The Times boasts eight editions and total circulation of 1.3 million. DNA, meanwhile, aims to attract 350,000 subscribers in Bombay, which already has a dozen dailies. And while ad spending on news channels is growing fast -- it's expected to hit $160 million this year, up from $10 million four years ago.

Inevitably, consolidation of media holdings will result in a shakeout. The smalltime journalist from a small town who doubles up as an advertising agent will be replaced by the highly paid, full-time scribe. Crummy, hole in the wall operations, so long a hallmark of local media, will give way to shiny, glass and chrome, corporatised buildings adorned with modern art. One only has to look at the spiffy DNA offices in Mumbai and new Express building coming up in Delhi to realise how dramatically, and suddenly, the image of the Indian media is changing. Inevitably, it will be the survival of the financially fittest; those who can undercut ad rates and evolve complicated pricing strategies.

Archives | Current News
Amity Edumedia. All Rights Reserved.
Powered By AKC Data Systems (India) Pvt. Ltd.
Private Policy | Disclaimer