Time to review traditional cover price model?
S K Khurana

Economic slowdown affecting every industry around the world hasn’t spared the newspaper-publishing segment. Many newspaper companies in the US and Europe are now struggling for existence as graphs of their advertisement revenues have declined unbelievably low. Cost cutting is the first and foremost measure every recession-hit advertiser has taken up to douse heat of this crisis. Today this ill-fated economic calamity eventually finds its path into the Indian newspaper industry where publishers as well as other players like equipment manufacturers and consumable suppliers began to feel the pain. So is not the right time to review over the whole model of the process to find the reasons behind this tragic cause in the industry.

As a first initiative, the marketing model strategically focusing on ‘cover price’ of newspapers is profusely required to review. It’s an obvious fact that there is hardly any commodity based on similar pattern. After all, there’s always a limit to subsidise a product unless it has been regulated for the masses by the state itself—where profit is not the motive as it is structured towards public welfare. In this regard, newspapers are doubtlessly to reach the masses and to keep them update with the latest information. But still it has to be priced in a way that at least the production cost of basic inputs is covered.

Concerning the apprehension in the industry, I agree with the notion that the increasing of cover price will in turn bring down circulation drastically. Well, with the cover price of newspapers averaging around Rs 2, we find many readers subscribing to multiple dailies. But it also leads towards national wastage. On the other hand, advertisers get confused on the rosy pictures shown by various media houses. Most of the time, advertising in newspaper A or B or C doesn’t give them clear-cut justification.

Recently, at the silver jubilee celebrations at Anna University’s Department of Printing in Chennai, The Hindu managing director N Murli warned against persisting ‘distorted cover pricing’ while talking about the fall in advertising revenues. I also have the opinion that with the review and increase of cover prices, advantage will be manifold—wastage will come down, readership will increase and content shall surely improve. And when all this happens, advertisers will also get good mileage even if circulation (genuine?) is not as large as that of low cover price editions.

Effective initiatives on ‘cover price’ may act as an efficient factor to remove growth impasse in India where increasing literacy rate as well as purchasing power may assure stability in readership, even if the cover prices are quadrupled. So, do review and find out whether we are on the right track to continue the existing model with that low cover pricing!



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