Saturday, 25 June, 2011

The larger Indian newspapers from the production point of view

The still fast growing newspaper industry in India is apparently unique in its behaviour. Whereas in trying to understand the entirety and variety of newspaper publishing, I recently described this behaviour as complex, many others actually see it as fairly structured and not so complex.

Ten years ago, from the production point of view, we used to think that there were only ten large newspaper groups in India and at most these would grow to about 20 with the inclusion of the major vernacular dailies in addition to the major English language publishers. We did not reckon on various factors such as several regional groups going national —­ such as the Deccan Chronicle group or the Dainik Bhaskar group. We did not think that so many new newspapers would start up and survive. And above all, although it was theoretically possible and the numbers were staring us in the face, it was difficult to grasp that the vernacular dailies would grow as fast as they have. We also underestimated the unlocking of value that is possible by throwing newspaper ownership open to public investment and to foreign direct investment.

One of the reasons that our perception of the future was a bit clouded was that we looked at growth from the production side and for us a large newspaper group meant one that needed or could afford to buy an imported 4 x 2 press for printing 70,000 copies an hour. We underestimated the vernacular publisher’s ability to leverage the digital infrastructure and to use it to capture newer cities and towns with numerous printing plants based on ever-improving and very affordable 2 x 1 presses. The fact is that 4 x 2 presses are very expensive to buy, install and operate for newspapers that need to print only 150,000 copies from a single centre and that too with many edition changes.

Fortunately for Indian newspapers the 4 x 1 presses (four broadsheet pages across and one around) were developed and have been much cheaper to buy and to operate. Apart from a smaller capital investment, they require less space and for our high number of localised edition change, since only one plate needs to be changed instead two, are economical in operation. Colour and the expansion of colour pages also become a natural and more tractable proposition.

Five or six years ago, experts in the industry estimated the demand by Indian dailies for approximately two hundred towers in the 4 x 1 format — provided the price was right. In the past five years, eighty 4 x 1 towers from manroland, Goss, KBA, Mitsubishi and Seikan have been installed in Indian newspaper plants. And another 45 are already on order from Manugraph, manroland, Seikan and TKS for installation by 31 March 2012.

Two things have improved the prices of 4 x 1 presses for Indian publishers — Firstly, the contraction of the newspaper industry in the developed countries since the financial crisis of 2008 and the increasing preference for new digital media. The second is that Indian newspapers have inspired several manufacturers to make this new configuration machine for the first time — and provided that the price is right, they have been ready to be the first customers of these new presses. In one case, an existing manufacturer of a 4 x 1 has come up with a new idea for making this format work more economically in Indian conditions. By encouraging innovation and willingly becoming the testing and proving ground, Indian newspapers are driving the 4 x 1 press market that will benefit newspaper publishers around the world.

Looking at newspaper growth from the 4 x 1 production point of view, it now seems that number of Indian newspaper groups that will need these presses is not merely 20 but more likely 40 to 50. This growth will happen most likely in the next five years as the competitive action shifts to the vernacular dailies. Consequently the demand for 4 x 1 towers by Indian newspapers will have to be suitably revised.
                                    —  Naresh Khanna (February 2011)

No comments: