The party is over

BY hoot| IN Media Business | 17/11/2008

What are the manifestations of a growing media recession? Postponed launches, dropped supplements, shrinking advertising, cancelled ads. And more.

THE HOOT surveys the scene.

February wasn¿t so long ago. That is when two English business papers launched Hindi business dailies and two Hindi papers announced their business daily launches. Around the same time the Outlook group launched Outlook Profit. Its publisher made a memorable statement to Agencyfaqs, "With markets pulling a rabbit out of the hat almost every day, I believe this is the perfect time to dedicate a magazine to the country¿s financial boom."

But that was February. Earlier this month, according to Mint, the same publisher was sending out a circular to the Outlook stable staff suggesting belt tightening for hard times ahead, and redeployment of excess staff in each team. And the magazine dropped two supplements which used to be distributed free with it, City Limits and Envy. India Today used to distribute supplements called Pink, Auto and Spice Solo with the main magazine. All of these have been dropped. As have two supplements which it used to distribute with its Bengali edition.

Back in February Dainik Jagran¿s business daily venture with CNBC TV18 was on the cards. Today it no longer is, and the CEO hired for the project has departed.

Business Standard¿s Gujarati paper launched in February from Ahmedabad and Mumbai with an ad line which said that over 35 per cent of stock market wealth was held by Gujaratis. Earlier this year, both editions shut shop. This paper, the Economic Times, The Times of India have all cut pages. The Times of India has squeezed sections into the main paper. This week Mint has made its supplement Campaign a part of the main paper. You just have to look at around to see the weight loss publications across the board are displaying.

Welcome to a new period of sobriety in the Indian media market. Journalists take note, no longer can you switch jobs with ease, with a salary hike each time. At Forbes, which was supposed to come from the TV18 stable, more than a dozen high priced journalists are twiddling their thumbs because its launch has been postponed. As has been the launch of the new magazine from the RPG group that Sandipan Deb was supposed to bring out. Sakal¿s multi-edition plans have not seen the light of day yet either. DNA Bangalore having hired, has postponed publication and is now heard to be doing a 14 December launch. We will have to wait and see if that goes ahead.

Because, in an advertising-led industry, where are the ads now going to come from? TV bouquets brought on new general entertainment channels—over the past year we have seen the advent of three: 9X, NDTV Imagine, and Colours. Now the latest analysis from Hong Kong-based media research agency Media Partners Asia puts the revenue growth projection for broadcasting firms at 17 per cent in 2009 compared to 26 per cent in 2008. It says the short-term climate for these three new entrants "will remain difficult." (Business Standard.)

Advertising grew at 22.1 per cent in India in 2007. MPA thinks this will slow down to 17.1 per cent this year, and 12.1 per cent in 2009. Profit margins of broadcast firms, it predicts, will drop. Agency Faqs meanwhile reports that broadcasters are contemplating reducing the carriage fees paid to cable operators for better placement of channels. It named E24, News24, INX Media, Sony Entertainment television and UTV among broadcasters which told Afaqs.com that they were reviewing what they paid out in this category. The website quoted "a company insider", to say that INX Media will implement a 40-60 per cent cut in the existing carriage fees.

All this is in addition to the woes caused by the film workers¿ strike, which has channels running reruns because no fresh episodes are being canned.

Company results for the second quarter for listed media companies are not cheery, NDTV reported a net loss of Rs 119 crore, HT Media¿s profits were down by 49 per cent. Sun TV Network, the highest valued TV company with a market cap of Rs 6234 crore reported a modest rise in profits. TV Today¿s profits were down from the last quarter.

TV news as well as entertainment companies are losing value sharply in the stock market, more so than print media companies, with the exception of Midday multimedia whose market cap was just Rs 69 crores. Sun TV Network was down to 162 today from a 52 week high of 442. TV Today was 62 against a 52 week high of 199, HT media touched its 52 week low today with 60, its 52 week high being 266. NDTV¿s stock was at 87 against a 52 week high of 511. In terms of market cap newspaper companies like HT Media and Jagran Prakashan had far stronger market valuation at 1417 crore and 1406 respectively, than NDTV at 513 crore, and TV Today at 334. The strong TV news company was IBN18Broadcast with a valuation of Rs 1324 crore.

And what are the individual straws in the wind which point to grim times ahead?

Papers like the Hindu and Business Standard have resorted to allowing ad positioning that they did not permit before, such as half jackets eclipsing the normal page one.

A new niche publication experienced its first advertisement cancellation—a regular ad which appeared until then in every issue, was pulled out. And the same company cancelled 500 copies which they were taking of the magazine.

The chief financial officer of an education company said he had not paid his agency for advertisements released.

UTV has decided to move offices of two channels from Noida to Mumbai, presumably to save costs.

And IANS reported on November 6 that a 32-year-old journalist, fired from his job by a Hindi magazine a few days ago, committed suicide at his home in Delhi. "The police said they found no suicide note but quoted the distraught family as saying that Chanderkant was under stress since being sacked. The dead journalist is survived by his wife and two children."