It seems like you just can’t miss Deccan Chronicle’s advertising blitz in Bangalore. In case you don’t live in Bangalore or are too much of a safe driver to look up at the hoardings, here is what the hoardings look like:
If you want to imagine how your news articles are going to look, take a look at Mouli’s blog. Indian Express seems to be up to the challenge. Their hoardings read “I don’t want Shakespeare to write my news.”
Having fewer words (or less words if you are a DC reader), makes a lot of economic sense. I was taking a look at some stats the other day and I found that more than 90% of DC’s revenue comes from advertisements. That would explain how DC is able to price its paper at Rs. 1 in Chennai where the incumbent Hindu charges Rs. 3.25. You can read more about this here.
If this strategy is indeed so successful and Deccan Chronicle is not really dependent on the revenue from newspaper sales, you might wonder why they charge anything for their newspapers at all. After all, the advertising rates are a function of the newspaper circulation and giving it away for free should obviously increase circulation. To most of us this seems natural since we are used to reading stuff on the internet for free because it is supported by advertising. But why do newspapers never seem to be able to go below a certain threshold when it comes to price?
The answer lies in a concept in economics called Moral Hazard. What it means in this context is that when a newspaper is priced close to zero, people will start picking up copies just for the re-sale value of the newsprint it is printed on. This, in turn, means that some of the consumers interested in buying DC for its content will not be able to pick up a copy because thera are only a finite number of copies. This is bad news for the advertisers and they will no longer be willing to pay as much for the same ad space.
An easy way to increase circulation quickly is to price at the lowest price point possible – just above the cost of scrap paper. And that’s exactly what DC is doing! And they are using increased circulation to sell more ads, leaving less room for the content. Fortunately, price is not the only thing that determines a person’s choice of newspaper although it clearly is a factor. There is definitely going to be a trend (among the new entrants, at least) to start following a similar strategy.
Clearly, this moral hazard problem does not exist on the web. Interestingly, things like a page’s search engine ranking and hence the revenue from advertisements on a page depends on the quality of the content to a much greater extent.
Taken together, do these facts mean that the primary medium for higher quality articles is going to be the web? Can you imagine a world where you read blogs for “serious” content and newspapers for “non-serious” content? Do let me know your views.
Photo: Courtesy Sans Serif
4 Comments
Narendra,
Neat post alrite!
Coming straight to the point, here is what I think… The future will largely be determined by these factors..
a) Price sensitivity versus Quality/content preference
b) How quickly the (misconceived?) idea about how a newspaper and a blog are, changes/evolves.
a) – What I mean is – to borrow your example – quite a few readers of The Hindu will continue to read The Hindu for reasons on the lines that its content and/or editorial quality is better than that of DC. These price insensitive customers, especially in the case of The Hindu pose a challenge to DC, whose only recourse is to simultaneously improve editorial quality/content to woo such customers.
Now, with blogs beginning to use advertising thanks to AdSense, even blogs should come under the scanner you use to compare newspapers (online or offline, irrespective).
b) – Now, there is still a customer base which prefers the physical newspaper to the online variant, and let alone this idea/preference changing, what else also matters is the following – The notion (misconception?) that a blog is essentially an opinion place, and a newspaper marries fact with opinion in a more acceptable manner still looms large (I assume!), and the blog vs news question can be answered by predicting how this notion will change or evolve over time…
You definitely got my birdbrain thinking
Cheers,
Vishwas
Seizonsha,
Good points.
While not all readers of The Hindu are going to switch to DC, some of them will. DC and other papers of its ilk seem to be hoping that these are the “right” ones – i.e. those in the 18-35 age group. That’s precisely why their ad campaigns are targeted at the SMS generation. According to DC, short articles with simple sentences make “quality” content.
Narendra,
I had not factored that marketing campaign in!
While it is rather unfortunate, DC and other papers, including the Times of India, recently gaining notoriety for advertorials and embedded marketing in news/editorial content, reality can only be accepted to be what it is..
If all this is not unstoppable, journalism may itself lose its relevance/respect…and then, maybe, as you have questioned, blogging may seriously threaten journalism (if it already hasnt enough!)….
Cheers,
Vishwas
Seizonsha,
I won’t go so far as to suggest that blogging (at least amateur blogging) will threaten or oust journalism. My prediction is that mainstream journalists and columnists will start using the internet as their primary medium.