In India, the slowdown is sparing few. Barring the mobile-telephony and the healthcare businesses, industry at large is reeling under the impact of the global economic recession. India’s media sector, so far relatively unscathed by the credit crunch is now coming under the scanner and the country’s scribes are feeling the pressure.
On Thursday, leading media-industry monitor contentSutra announced that the country’s largest newspaper The Times of India has mooted pay-cuts for its approximately 8,000 employees. What the article has noted may yet to be verified, but the pressures of the economic downturn on India’s newspapers has been evident for a few months now.
From November last year, close to every English-daily in the country has enacted a recruitment freeze across their editorial sections and from most indicators, the ban is expected to stay in place till at least the third quarter of the next financial year.
However, these observations fly in the face of statistics, which continue to define the Indian media (and entertainment) industry as amongst the most robust in the world. According to a PricewaterhouseCoopers report, the country’s print media is projected to grow at a CAGR of 14 per cent from US$ 3. 06 billion to US$ 5.77 billion by 2012.
This, the report notes, will be on the back of growing literacy that has resulted in India emerging as the second largest newspaper market in the world. Further, newspaper sales in the country increased 11.2 per cent in 2007 and 35.51 per cent in the five year period and newspaper advertising revenues in India were up 64.8 per cent over the previous 5 years.
But what the statistics fail to divulge is the sentiment of insecurity that is flooding the country’s newspaper offices. In the last few years, banking on the economic boom that was washing over India, many newspapers attempted to extend beyond their traditional reach by establishing new editions in the country’s smaller towns and cities. Though these editions, as stand alone entities, are self-sustainable, the diminishing rates of return on many of these investments are sending newspaper owners into a tizzy.
The money isn't coming-in not just for the newspapers but also those who advertise in their pages. Advertisers, who, too, have benefited from the healthy growth of the Indian economy, are now cash-strapped. Not only are their businesses flagging but the credit crunch has translated into quickly diminishing liquidity pools for many. The crisis might not be all-pervasive yet, but the noose is slowly tightening.
Foreign newspaper, might now, reconsider entering into the subcontinent. If indeed, they have had any such thoughts in the recent months.
What do you think?