A
spate of controversies in recent months with respect
to India’s media policy points to the problems related
to putting in place, in piecemeal manner, a policy
to regulate a multi-component industry that has experienced
rapid growth without being subject to an adequately
worked-out and broad policy framework.
Growth
of the Print Media
At
the centre of the media industry is the print media,
facing much competition for both audience and advertising
revenue from the rapidly growing television broadcast
business. However, despite predictions that the coming
of television and the new media would dampen, if not
halt, the growth of the print media, recent years
have seen its relatively rapid and unhindered expansion.
Circulation figures, though known to be unreliable
because of inflated claims by some newspapers, do
provide some indication of the orders of magnitude
involved. According to the Ministry of Information
and Broadcasting, the total number of dailies in the
country in the year 2000 stood at 5,364, having expanded
at a compound annual rate of 7.4 per cent between
1988 and 2000. However, not all these dailies report
their circulation, so that the total circulation figures
for dailies refer to a much smaller number. Thus,
in 2000, the number of dailies ‘related to circulation’
(or reporting circulation) stood at just 1,493 (which
was lower than the number registered in the base year
1988) and their reported circulation stood at 59.1
million.
The lack of complete reporting makes it extremely
difficult to arrive at an assessment of the growth
of circulation in recent years. Charts 1 and 2 show
that the ‘number of dailies related to circulation’
has not just grown at a much slower rate of 4.8 per
cent, as compared to the 7.4 per cent reported for
all registered dailies, between 1988 and 2000, but
that this number has fluctuated erratically over the
years. Hence, the rate of growth of aggregate circulation
figures of ‘reporting dailies’, which stands at 10
per cent per annum between 1988 and 2000, is not a
true reflection of the rate of expansion of actual
aggregate circulation.
A more representative, even if inadequate, reflection
of the pace of expansion of the industry may be the
average circulation of dailies. The problem here is
that the increase in average circulation figures over
time would be the result of two factors: changes in
the average circulation of dailies that have been
reporting their circulation figures throughout the
period under consideration; and the effect of the
average circulation of dailies that have begun reporting
their circulation figures at different points of time
within this period. Since it was probably the bigger
newspapers that reported their circulation figures
throughout the period, the growth in average circulation
of all reporting dailies, which works out to 5 per
cent per annum, is likely to be an underestimate of
the growth of aggregate circulation. What could be
stated is that the expansion in circulation would,
in all probability, be greater than 5 per cent compound
per annum over the period involved, and lower than
the 10 per cent rate of expansion of aggregate circulation.
Chart
1 >> Click
to Enlarge
Language
and Pluralism
The
real question from the point of view of the evolving
competitive structure of the industry, is the distribution
of this average circulation of 39,600 in the year
2000 among the reporting dailies. If a few dailies
account for a major share, which is also rising, dominance
is clearly growing. However, in a country with a population
that speaks and reads a large number of diverse languages,
it is not the distribution of aggregate circulation
among all dailies at the national level that matters.
Newspapers pertaining to each language constitute
a separate market segment, which in most cases, excepting
in English, is substantially restricted to a geographically
contiguous area.
This has two implications. First, there are limits
to concentration of readership with a few suppliers
at the national level, because of the substantial
degree of ‘diversity and pluralism’ resulting from
what one analyst has described as ‘the vast regional,
linguistic, socio-economic and cultural heterogeneity
of a subcontinent’. But this tendency towards pluralism
at the national level is muted by the differential
size of each language-market segment. Besides differences
in population size, sharp variations in literacy,
education and politically and socially determined
readership habits result in substantial variations
in newspaper and periodical circulation across states
and languages. In terms of the aggregate circulation
of reporting dailies, newspapers in Hindi with an
aggregate reporting circulation of close to 26 million
lead the pack, followed by English with a much lower
7.9 million, Marathi with 4.5 million, Urdu with 3.6
million, Malayalam with 3 million, Gujarati with 2.8
million, Bengali with 2.5 million and Oriya with 2.1
million. Circulation in all other languages is below
2 million.
Chart
2 >> Click
to Enlarge
Segment-wise Concentration
Second,
beneath the observed national-level pluralism, there
can be a substantial degree of concentration in each
linguistic and socio-cultural market segment. An expansion
either in the number of dailies in all languages or
in their total circulation need not mean greater pluralism
if within each segment one or a few dailies dominate
the field with a hefty share of the circulation. Unfortunately,
evidence to assess whether this tendency has been
operative is difficult to come by. But some preliminary
statements could be made based on a comparison across
linguistic market segments.
Since language-wise distribution of non-reporting
dailies is unavailable, the representativeness of
the ranking of circulation by language is not definitive.
But treating the ranking according to average circulation
of reporting dailies in each language as representative,
we obtain the ranks reflected in Table 1, which shows
that Bengali and Oriya lead the pack, followed by
English, Malayalam and Assamese.
Table
1 >>
Click to Enlarge
This average circulation figure, which is the end
result of the distribution of aggregate circulation
by language across the number of reporting dailies,
does allow some preliminary judgements on relative
concentration. What is interesting is that the relationship
between the average and total circulation of reporting
dailies in each language, as reflected in the rank
correlation coefficient (RCC), which stands at 0.26,
points to a relatively weak relationship between the
two (Table 2). This suggests that the distribution
among dailies of the total circulation is not directly
related to the total circulation in any language.
This despite the fact that there is a relatively strong
relationship between the rank of a language in terms
of total number of reporting dailies and its rank
in terms of total circulation (RCC of 0.89), which
seems to indicate that it is the number of reporting
dailies that drives the total circulation figure.
This apparent contradiction has obvious implications
for concentration of circulation by language.
Table
2 >> Click
to Enlarge
To capture this, Table 2 presents
a set of rank correlation figures, of which there
are a few that are worth noting. First, there is a
significant, even if not excessively strong, relationship
(RCC of 0.38) between the rank in terms of total daily
circulation of a particular language, and its rank
in terms of the share of big newspapers in total circulation
(where ‘big’ is defined as a circulation of 75,000
and above). That is, concentration of circulation
is higher in languages where circulation is larger.
Larger market size seems to be accompanied by some
concentration. Second, there is an extremely strong
relationship between the rank of a language in terms
of the share of big newspapers in the number and circulation
of dailies in that language (RCCs of 0.91 and 0.92),
and the average circulation of reporting dailies.
That is, the fact of concentration is illustrated
by the result that where the size of total circulation
relative to reporting dailies is high, a few big newspapers
dominate and influence the average circulation figure.
Third, there is a relatively strong negative relationship
(RCC of -0.45) between the rank of a language in terms
of the share of medium newspapers (circulation of
50,000 and above but less than 75,000) and its rank
in terms of average circulation. That is, wherever
there is a large number of medium-sized newspapers
relative to the total, average circulation tends to
be smaller because of a more equitable distribution
of the market.
These results can be taken to indicate that, underlying
the diversity and disparity implicit in the segmented
markets created by language, there is a basic tendency
toward concentration in larger markets among those
languages. Overall, barring exceptions like Hindi,
larger circulation is accompanied by greater dominance.
Fortunately, the diversity resulting from language
ensures that this concentration is substantially dampened
at the national level. The only instances where this
need not be true are the English language dailies
which command the third largest circulation among
reporting dailies, and Hindi dailies which, though
commanding an extremely large circulation among reporting
dailies, are also large in number resulting in the
fact that the rank of this market segment in terms
of domination by big newspapers is small.
The
Threat
from Television
It
is against this background that we need to assess
the threat posed by television to the print medium.
The growth of TV households and of those among them
with cable and satellite (C&S) connections has
indeed been rapid. The National Readership Survey
of 2001 estimated that 42.3 per cent of Indian households
were TV households and that, of these, 47.8 per cent
were C&S households. As noted earlier, despite
this, the gross and average circulation figures of
reporting dailies seems to suggest that newspaper
circulation is on the rise.
Chart
3 >> Click
to Enlarge
The real threat from TV, therefore,
is that it could steal a share of the ad revenues.
As is well known, newspaper revenues in India are
completely dependent on advertising revenue, since
the cover price is inadequate to cover the costs of
producing the paper. In the circumstance, if the advertising
revenues of newspapers are eroded by television, even
large newspapers are under a competitive threat. On
the other hand, if this erosion of aggregate print
advertising revenues is accompanied by a concentration
of available ad-spend among a few dailies in each
language, the tendency towards concentration could
be aggravated. Since advertising revenues are indeed
influenced by circulation, and since there is evidence
of greater dominance over circulation in markets with
larger aggregate circulation, such concentration of
ad-spend can actually occur and is corroborated by
industry insiders. This effect is all the more significant,
inasmuch as reports indicate that there has been some
decline in the concentration of advertising revenue
among English newspapers, resulting in a growth in
advertising revenue shares of the language dailies.
