Indian magazines are taking the ?supplement? route to test the market appetite for niche segments. In a new business model that has taken off in the magazine segment of the print sector, leading magazine houses like India Today group and Outlook group plan to hive off their supplements into independent magazines.
Introducing a supplement before launching a planned magazine for a niche audience gives these publishing houses enough time to check market response and induce habit formation among their readers.
The Outlook group, which claims an annual circulation of 11.2 million copies has already discontinued its supplement Envy, a magazine supplement in the genre of lifestyle as it plans to hive off the product into an independent magazine. The magazine that aims to be a blend of information on lifestyle, leisure and travel will hit the Delhi Airport from September 1 under the name Outlook Lounge. The Outlook group has tied up with Delhi International Airport Pvt Ltd to launch it as a monthly magazine, to be distributed free among air travelers.
President of the Outlook group, Maheshwer Peri concedes that next on the cards is another supplement City limits but refuses to call this idea a well planned business model. ?We wanted to offer more content to our readers, both in terms of quantity and genres. By offering extra specialized content, we are also targeting to expand our readerbase,? Peri said.
The India Today group?s supplement Spice, which was introduced with the main magazine in late 2005, was hived off into a separate entity and hit the stands a few months back, priced at Rs 50. In a recent interview to FE, Ashish Bagga, CEO, India Today Group said that the group intends to eventually hive off more of its supplements into standalone magazines. But he refused to divulge the timeline and further details. Currently the flagship magazine of Today group, India Today offers eight such supplements like Home, Aspire, Spice, Woman, Smart Money, Pink, Olympic, Auto, Simply series catering to various niche genres like career, health, personal finance, city specials etc.
The magazine publishing market in the country is expected to reach Rs. 3,800 crore in 2012 from an estimated Rs 1,900 crore in 2007. The advertising segment in this genre is projected to grow at a higher rate of 16% as compared to the growth of circulation revenues by 10%. The magazine advertising segment is expected to reach Rs. 3,000 crore in 2012 from the current size of Rs. 1,400 crore. COO of Lodestar Universal, Nandini Diaz feels that apart from providing a good sample to test the product in the market, such a model ensures a strong brand association for the new magazine with the established parent product like India Today and Outlook main magazine.
While planning ad space for brands and product, the supplement becomes important to media planners as it helps them reach out not only the subset of niche audience, for instance bike lovers through an auto supplement but the entire universe of established parent magazine at almost one fourth the cost of similar ad-space in the main magazine. A full-page coloured ad inside the main magazine costs around Rs 4,50,000 compared to Rs 1,00,000 for the same in the supplement.
According to Smita Jha, associate director, PWC, ?It is a tried and tested norm. Also till the new magazine becomes established, the parent group can rake in additional ad revenue by citing the circulation figures of the main magazine.?