While the sector will witness a growth from last fiscal, it has yet to reach the pre-pandemic levels and will only touch 75% of the FY20 revenue mark
The print media sector in India will reach only touch 75% of its fiscal 2020 revenue mark despite witnessing 35% on-year growth this fiscal, on a low base in FY22, according to CRISIL report. The sector clocked Rs 31,000 crore as revenue in FY20, with 70% of the revenue coming from advertisements and the remaining 30% being accounted for by subscriptions. Print media posted a 40% decline in revenue last fiscal amid the first wave. The same is expected to reach Rs 24,000-25,000 crore in FY22.
“The second wave has impacted ad revenues in the last quarter, as it correlates strongly with economic activity. We expect ad revenues to recover from the current quarter as economic activity revives,” Nitesh Jain, director, CRISIL Ratings, said.
As per the report, sharp cost rationalisation measures and digitalisation of content will lead to a revival in profitability to 9-10%. Meanwhile, the bottomline will grow despite the 20-30% rise in newsprint prices over the last six months. The credit profiles of large print media companies will be resilient, cushioned by healthy liquidity and strong balance sheets, while for the remaining ones, liquidity management will be crucial, shows an analysis of CRISIL-rated companies that account for 40% of the sector’s revenue.
As for subscription revenue, the sector is witnessing a structural change amid a shift in consumer preference towards digital news, from physical newspapers. This seems to be more prominent for English newspapers, which have a higher share in metros and tier-1 cities, where digital adoption is also higher. The English newspapers are focusing on monetisation of content by putting premium news behind paywalls and pushing digital subscription along with print subscription.
Meanwhile, the non-English newspapers witnessed relatively resilient subscription revenue even in the first wave because of their strong roots in the hinterland. Due to this, the overall subscription revenue loss in FY22 will be limited to 12-15% of the pre-pandemic level.
Furthermore, the report highlighted that unlike the experience in Western countries, print media will remain popular in India on factors like low cover price, ability to deliver original and credible content and people’s habit to read physical newspapers.