Market dynamics-local and national, subscription, advertisements. Advertorials, events, sponsored

programs, In-program advertisements.Anirban Bhattacherjee (2013-2015)

Mode of revenue generation- in media organisations.

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Both the offline and online news providers are in the midst of substantial transformation and that the traditional means of funding operations are no longer as viable as in the past.

In the past newspapers and other news organizations engaged in a far larger range of commercial activities than then they do today.

The initial gathering and distribution of news was paid for by emperors, monarchs, and other rulers who needed information for state purposes. Later, wealthy international merchants hired correspondents to gather and relay news that might affect their businesses.

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When news became a commercial product, newspaper publishers subsidized the operations with profits from printing books, magazines, pamphlets, and advertising sheets, income for editors from shipping and postal employment, profits from operating book shops and travel agencies, and subsidies from communities and political and social organizations.

Today, however, news organizations are struggling to maintain themselves and develop digital operations by primarily focusing on the two revenue streams they have known in recent decades: subscriptions and advertising

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Subscription and readership are 2 different parameters.  A single newspaper is read by multiple people, hence the readership is much higher than circulation.

The figures were released recently by Indian Readership Survey conducted by theMedia Research Users Council (MRUC).

PRINTRevenues from sales of advertising

pay for the bulk of the costs of newspaper production. That’s why the reading public pays so little for its newspaper.

There are two types of newspaper advertising – display and classified. A display advertisement is a written message, often accompanied by an illustration or photograph, which can be placed in any section of the newspaper. A classified ad refers to those advertisements that are separated into specific classifications and located in one or more sections of the newspaper.

PRINT. There are two types of display ads found in the

newspaper – national and local. National advertising usually refers to products that are promoted on a nation-wide basis, such as automobiles and brand-name products or retail chains. Local advertising is used to promote local, regional or national products. The ad is written, however, to appear in the local market.

When placing a display ad, the advertiser is charged by the amount of space the ad occupies in the newspaper. The price of the space varies with certain factors:

Newspaper circulation (the larger the circulation the higher the price charged)

Size of ad Use of colour Guaranteed position in newspaper Day the advertisement runs Advertising frequency

PRINT Classified ads Classified ads are not written by

creative service departments, but by individuals wishing to advertise goods and services available or needed.

When placing a classified ad, advertisers are usually charged by the line. As a result, classified ads are brief. The price varies with the number of insertions desired and the particular days chosen. For example, the unit cost of an ad may decrease if it is run all week. On the other hand, a premium could be added to the cost if a high circulation day is chosen, such as Saturday.

PRINTDoes newspaper

advertising work?  Google’s own research

shows that 56 percent of consumers researched or purchased products they saw in a newspaper. Google also says that newspaper advertising reinforces online ads: 52 percent are more likely to buy products if they see it in the paper.

PRINT Business Card Ad A business-card ad is a small rectangular newspaper ad that usually

has a relatively thick outside border. The ad is about the size of a typical business card or slightly larger. Business card ads usually contain the name of a company, a little about the company's offer and products and a blurb that may differentiate a company from competitors: "Serving the great Cincinnati area since 1969." These ads may be placed near the classified section or in whatever space the newspaper publisher designates for them. They are frequently grouped together.

Coupon Ad A coupon ad can be highly effective because the consumer can

save money on a company's product or service. They are geared toward services or products that people use frequently. Coupon ads can be any size, but publishers usually keep the size fairly uniform throughout the newspaper.

Circulars Circulars are the glossy inserts that come tucked inside a

newspaper. They are frequently printed by a third party and shipped to a newspaper's printing centre, where they are inserted into the paper. Because of their expense, circulars are most commonly used by national chains who can advertise in a variety of markets.

PRINTLegal Advertising

Legal advertising generally appears in or near the classified ads. Legal ads contain information that is required by law to be made available to the public. The information is usually of a specific and professional nature. Notices to creditors, name changes and information about public hearings are typical of this type of advertising. Any individual placing legal advertising will generally do so with the advice of an attorney.

PRINTJacket

advertisements. All the newspaper

will be covered in this customized jacket on which 4 sides of full page branding is possible. Jacket is made of hard paper and hence provides high visibility to the brand.

PRINT TOI.Another advertising first for The Times

of India: Three jackets in one edition-

“This is the sign of buoyancy in the economy. The advertisements reflect that the sluggish phase is over, and advertisers are again coming out with their aggressive marketing strategies. The advertisements also show the belief that they have in our brand, The Times of India. The three jackets strategy was chiefly used in our Mumbai editions. However, in other editions too, we had plenty of advertisements.”-Rahul Kansal, Brand Director.

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PRINTSOLUS-

of or denoting the position of an advertising poster or press advertisement that is separated from competing advertisements: a solus position

PRINT.Advertorials- A term that combines the words

“editorial” and “advertisement”, an advertorial refers to a type of print advertisement designed to resemble editorial content. An advertorial is written in the form of an objective opinion editorial and may resemble a news story about a product or service. Like any other form of advertising, an advertorial is a paid placement in a magazine, newspaper, or other printed publication, but is a less obvious form of advertisement than traditional ads.

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RADIO India’s private FM Radio segment is expected to

generate revenue of around INR14 billion in 2012–13, with 245 private FM stations operating in 86 cities, and has been growing at a CAGR of 14% annually. 

The sector accounts for around 4% of the country’s total Ad industry. Globally, radio’s average share of the total Ad industry is between 5% - 10%.

Advertising revenues comprise more than 85%–90% of the total revenue generated by FM radio companies; non-FCT sales can contribute up to 20% of a radio company’s total revenue today.

On Mar. 25.2012, the Directorate of Audio Visual Publicity (DAVP) announced a quadrupling of advertising revenues for CR stations to Indian rupees 240 (4.5 dollars) per minute

RADIO HOW DOES A RADIO STATION EARN?On-air advertising- On-air advertising makes up a major part of radio

station revenue. Stations sell airtime to companies that wish to reach the audience with messages about their products or services. Spots vary in price depending on their length, the time of the day they run and the show during which they air. The positioning of each spot can also impact its value, with those aired immediately after the show moves to commercial and immediately before it returns commanding the highest prices. In some cases advertisements are read by on-air personalities in hopes that more people will pay attention when their favourite host is the one speaking. These spots tend to cost more than the traditional commercial.

RADIO EVENTS-Radio stations often hold special events,

sometimes on their own and sometimes in concert with advertising partners. These sponsored events serve the dual purpose of attracting new listeners to the station and bringing in extra revenue through ticket sales and merchandising. Many talk radio stations will hold annual cruises or gala dinners during which on-air personalities will mingle with listeners, give speeches and generally let the public into their world. Tickets can be at a premium depending on the venue and the guests, and the proceeds earned by the station can be substantial.

RADIOThe Big Rjs and the bigger shows! Radio stations are always on the lookout

for the next big on-air personality, in part for the ratings and ad dollars it will bring the station and in part because of the potential for syndication that a popular show offers. Radio stations are able to sell the rights to air one of their shows to other stations in exchange for big money. Other stations are eager to fill their airtime with well-known, popular shows and often will bid against one another for the privilege to do so. The bigger the show and the more markets it reaches, the more the host and her contracted station stand to make

RADIONews- Radio stations with a news focus sometimes

sell hourly feeds and direct news wire product to other stations around the country. The idea is to eliminate the need for every station to manage its own staff of reporters and news anchors to create an hourly broadcast and breaking news updates.

For example, NBC News Radio offers a national

radio service that features NBC reporters delivering individual news stories piecemeal and hourly newscasts available through integrated services digital network

TELEVISION

The Indian Television sector is the third largest in the world in terms of the number of TV Households and has become the preferred advertising medium in India during the past few years. The television sector has been growing at between 12-15% in recent years resulting in an increased share of advertising compared to other advertising media. The TV industry is currently estimated to be worth USD 6.5 billion.

TELEVISI

ONThe television

industry in India, as elsewhere, consists of three basic internal stakeholders:- Distribution- Channels- Content and Rights

TELEVISION

Distribution- Despite reaching 150 million

households, the overall TV penetration in India remains low at 63% and is growing steadily in line with economic growth and disposable income. The share of Cable and Satellite based distribution continues to be most popular mode of distribution accounting for 80% share among TV households. Direct to Home (DTH), currently accounts for a smaller share but has been the fastest growing mode and holds promise.

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Television channels- India has seen proliferation in the number

of channels over the last five years with over 825 active channels, but revenue is concentrated in a few and profitability in the hands of even few.

Those popular channels which have been carried by analog cable have generated high TV viewer ratings and a consequent dominance of ad revenues.

Digitization is expected to even the playing field somewhat and to improve the economics of minority and specialist channels. The channels which were at the mercy of LCOs, post digitization will be able to reach their end user and offer niche content for both subscription revenues and targeted ad revenues

TELEVISION Content and Rights- Low cost content production has been the focus of

most of the television channels. Most content has been produced in house by TV channels and there are few large size external content production houses in India.

Outsourced TV content usually accounts for about 4-5% of the television industry size. The growth has mainly come from the recent proliferation of channels. The production budgets for Hindi and regional fiction shows are lower compared to international standards.

However, low advertising revenues on account of poor viewership and in other cases high carriage fees paid to LCOs to be part of the analog band has resulted in severe competition and low margins for the broadcasters as advertisers get enough choice to shop around for great bargains. As a result, broadcasters have had no option but to restrict content costs, the only aspect which is well within their control.

Rise in non-fiction shows like reality shows, cricket and films are the only exceptions to this trend due to their high popularity among viewers. 

TELEVISIONThe Newer Avenues-(1) Format selling Format selling is when a

show concept is sold typically in geography and is then adopted. For this the broadcaster gets a piece of the pie. Indian Idol and Kaun Bangea Corepati are example wherein Indian companies have purchased formats

TELEVISION

Syndication Syndication is the selling of content

usually in a new geography or an alternative platform within the same geography. Therefore if a show like Hum Paanch is available on a Kingfisher flight (and Kingfisher has paid for this content) or if Hum Paanch is sold to a broadcaster in Nigeria who then runs the show on his channel then a broadcaster typically earns revenues from the same.

TELEVISION Mobile streaming of content There are about a total of 100 million TV screens in

India. While there are about 500 million handsets. Therefore, even if 20% of these handsets have capability to stream TV content then the number of TV screens and Mobile TV screens are equal. MTNL and BSNL already has the capacity to stream TV and with 3G coming in mobile TV has seen a growing interest.

The implications of Mobile TV would mean: significant revenue from subscriptions, ability to command higher advertising revenues (as the number of viewers would increase) and there would be major implications on viewership data. Sports, news and music channel would benefit the most as they are the genre best suited for a small screen and a user who is on the go. With VAS revenues amounting to close to 15% of revenues for a telecom player, it is a reasonable surrogate to suggest that consumers are willing to spend.

TELEVISION

Online streaming of content Rajshri is the leading Indian

firm which streams online content and Hulu is the international player known for its online streaming. However, each of these are supported by advertising and there been limited if any success on being able to charge users for content. The areas where streaming of content looks likely are sports and news.

TELEVISION

Pay per View (PPV) Till about a year back PPV was

being touted as the next big thing. But, even post DTH hitting the 20

million mark the use of PPV remains limited. But what is causing the optimism to sink even further, is the fact that there is almost minimal use of the free movies given as part of the DTH subscription, leading people to believe that if the free movies are not being watched (only about 5-10% of usage is reported for the free movies/content given away by DTH) then the chances of getting people to pay is almost nil.

TELEVISIONMerchandising Across the board the largest

problem with merchandising was the issue of piracy and lack of legal action against the same.

MTV has experimented with merchandising of MTV and Roadies with limited success. Disney has had some success of their characters but are more of an international phenomenon which is imported and therefore have been monetized

TELEVISION

Subscription - DTH only channels These can be divided into 2 broad areas: (1).Wherein a broadcaster decides to be available only

on the DTH platform and not on the analog/CAS platform. In here while there might be a possibility to charge in the future, currently such channels are more FTA (Free to air) wherein they have existing content and simply put it.

(2). The other way a few companies have been approaching this is to consider the platform as a delivery mechanism and make the channel a service and then charge for such content. Topper, which is available with TATA Sky is one such example. Topper provides tuition like service for students from standard ninth to twelfth. So they have contract with teachers whom they record and then using the TATA Sky platform broadcast. It turns out to be a relatively cheap option for consumers and due to the scale involved each consumer has to pay a lot lesser. This is a concept which can be extended and therefore can be monetized.

SPONSORED PROGRAMMES New Delhi Television (NDTV) is carrying forward its de-risking strategy

of reducing dependence on advertising revenues. Higher revenues from programme sponsorship had helped the news broadcaster report a small net profit of Rs 2 crore in 2012-13 despite weak advertising revenues, after two years of losses.

NDTV has now brought on board a channel sponsor and a channel partner for its split channels NDTV Profit and NDTV Prime. NDTV has from tonight converted its business news channel NDTV Profit into a dual channel - NDTV Profit will be a business news channel from 9:00 am till 5:00 pm on weekdays and will thereafter convert into a lifestyle and entertainment channel NDTV Prime. Over the weekends, the channel will be entirely NDTV Prime.

The 2-in-1 channel will provide NDTV with two primetime segments, one during the market hours and the second in the evening.

Mobile phone maker Micromax will be NDTV Prime's channel partner for a three-year period, under a deal, according to sources, that's valued at a shade above Rs 30 crore. Micromax will gain huge mileage as its emblem 'M' will be replacing the character 'm' in NDTV Prime

IN-programme advertisements.

With almost every brand, churning out commercials with great storyboards, memorable punchlines and characters, visibility is a constant battle. Celebrities’ endorsing multiple brands also dampens the exclusivity and uniqueness of the product.

The most obvious approach in such a scenario is to catch the audience’s attention by creating opportunities in the untapped prime time segment – the serial itself.

Dawson’s Media revenue Model