Chennai: A growing crop of Chennai magazines on food, weddings, local social clubs, expatriates and movies is jostling for advertising from jewellery stores, hospitals, hotels, clothing boutiques and restaurants that prefer these cheaper niche avenues to the high-priced space in the national print media.
But as the advertising income of even Chennai-centric publications shrink with increased competition, revenue options such as events that generate sponsorship money could hold the key to survival.
There are at least 18 such local-content, monthly magazines in the city and adding to that list in 2010-11 are publications such as Wedding Vows, free-mailer food magazine Malli (Tamil for coriander), Chennai Realty and Parents Circle. The magazines—largely on-the-ground versions of in-flight magazines with glossy pictures and text similar to that used in advertorials—seem to be an economical choice for small and big businesses targeting the English-speaking, upwardly mobile population of the city.
Magazines on news stands at Landmark store in Nungambakkam in Chennai. Sharp Image/ Mint.
“Today, the south Indian woman has crossed boundaries of being conservative, yet, after a party she may head back home at 11pm, unlike her Mumbai counterpart who may make that move only at 2am,” says Chennai-based Sujit Kumar, a former marketing professional who started Just for Women monthly magazine in 2007.
Kumar, whose target audience is middle or upper middle-class south Indian women in the 18-44 age bracket, says the publication has a circulation of 32,000 copies a month— 20% of it coming from subscription and the larger chunk from news stand sales— across Tamil Nadu, Kerala, Karnataka and Andhra Pradesh. In the coming months, he plans to launch a food magazine.
Malli, published by Kayce Food Pvt. Ltd, with a circulation of nearly 8,000 and four-year-old Galatta Cinema, run by zoology graduate Shakthi Girish and her husband Girish Ramdas, started out as websites and later branched out into print. At least four magazines plan to go pan-India in the next 12-18 months.
“The amount of media consumption is going up in Chennai,” says Ashish Pherwani, associate director at accounting firm Ernst and Young’s media practice. “This is the ideal time to launch new magazines in the market.”
Labelled as one of the fastest growing cities in the world in 2010 by Forbes magazine, the capital of one of India’s most literate states has turned out to be the biggest generator of jobs behind Delhi and Mumbai (according to the Ma Foi Randstad Employment Trends Survey) thanks to global automobile, cellphone and computer hardware making companies using the city and its outskirts as a manufacturing hub.
This has stoked the city’s spending power, increased the inflow of expatriates (hurt by the jobs slowdown overseas), spurred more luxury hotels (the Hyatt Regency and Hilton opened in the city over the past year) and lured pizza chains, clothing boutiques and jewellery stores on the lower levels of commercial and apartment blocks that have replaced bungalows.
There are currently around 1,000 high-end residential units being developed within the city, says Sanjay Chugh, owner of Skylines property consultants. He added that though neighbouring metros like Bangalore take the lead in terms of supply, Chennai has registered a 30-40% growth (in price) compared with the information technology hub. The developments along the city’s East Coast will add to this tally and fuel retail growth.
In short, the urge for competing retailers to shout out to their customers has increased. As the niche magazines charge 15-20% of what leading national magazines targeting similar audiences charge, these local-content and colour visual-filled, 40-70-page periodicals have proven to be an economical advertising vehicle.
A quarter page advertisement in a national daily costs Rs 1-2 lakh, while these magazines charge less than one fourth of that for a full-page ad according to one of the advertisers, B. Abhinandan, director of Chennai-headquartered Brown Tree, a retail chain selling dry fruits and organic food that has spread to Bangalore. He spends around Rs 40,000 a month for advertisements in two city-focused periodicals —lifestyle magazine Ritz and expatriate-special Culturama.
“A lot of people pick up these magazines in waiting areas at spas and restaurants and it reaches the audience we want to attract,” says Mir Ali Reza, executive director of Tamil Nadu-based dental clinic chain Dentistree, another advertiser.
But can these small-entrepreneur-backed and advertising-revenue-dependent niche magazines—which cost anywhere upwards of Rs 70-90 per copy to print and are priced at Rs 40-100—be a challenge for top sellers such as Femina, which recently launched a Tamil-language edition.
“This is good news for me, because it tells me from a reader perspective and especially from an advertiser perspective they are looking for magazines such as Femina Tamil, which are high on quality and content,” said Tarun Rai, chief executive of Worldwide Media, which publishes Femina, when asked about increasing competition. But he added that national magazines have a brand equity, which advertisers view differently than other niche magazines.
The increased competition and reduced budgets of advertisers hurting from higher interest rates and other cost pressures, are exerting a downward pressure on ad rates. This means that if magazines don’t cover their capital costs within 6-12 months then they are unlikely to survive.
“It’s like an imploding star that breaks into several fragments before it gets sucked into the black hole,” says Ramjee Chandran, of 11-year-old Explocity Pvt. Ltd, whose fortnightly city guides business broke even in 2008.
Chandran had to shut his two-year-old Chennai lifestyle magazine 044 (the city’s telephone area code) earlier this year after newer rivals undercut his advertising rates, according to sources close to the company. Ramjee says 044 had a monthly circulation of 20,000 at the end.
Magazines overall account for possibly 4% of the total ad pie, which is estimated to be around Rs 18,000 crore according to an Ernst and Young’s analyst.
One option for niche magazines, which account for a fraction of the overall 4%, is to reduce the dependence on advertising—only 20% of revenue comes from subscriptions— through events, says Ernst and Young’s Pherwani. Even national magazines earn about 80% of their revenue from events, according to the consultant.
Ritz recently teamed up with car maker Audi for an award function in the city that will contribute a good chunk of revenue this year, said editor Aruna R. Krishnan.
“Subscription revenues are under pressure and the risk of competition for ads between the niche magazines themselves is high,” Pherwani says. “Alternative revenue models will hold the key.”