Cheenai: The next Indian city that’s likely to see a pitched battle for newspaper readership will be Chennai, with the publisher of the venerable daily, The Hindu, pitting itself against three entrenched incumbents with a new Tamil daily, the first time that Kasturi and Sons Ltd will produce a media product that’s not in English.
The publisher of the 135-year-old newspaper has hired K. Asokan, who ran Tamil weekly magazine Ananda Vikatan, to edit the new paper, which hasn’t been named yet.
A move into the regional language market makes eminent sense given the surging growth rates—the Tamil language print market is expanding at 38% a year driven by increasing literacy rates and younger readers, according to Sashi Kumar, chairman of the foundation which runs Asian College of Journalism in Chennai. That contrasts with an English-language market that’s seeing slow growth or declines—except for the leaders—as newspapers struggle to compete with TV and digital media.
What’s at stake is evident in the high-profile battle for readers taking place in the Bengali newspaper market between The Times of India group’s Ei Samay and Anandabazar Patrika’s Ebela tabloid.
“The vernacular papers are expanding owing to new readership while the growth in English dailies is plateauing,” said Sashi Kumar.
Kasturi and Sons’ Tamil newspaper launch, originally scheduled for this month, appears to have been postponed. Arun Anant, chief executive officer of the company, declined to give details. “We are yet to put a date on the launch,” he said.
The Times of India group may also be eyeing the same space, having already taken on The Hindu in its bastion of Chennai.
“We have been examining entering various regional languages and Tamil is one among them,” said Rahul Kansal, chief marketing officer of Bennett. Coleman and Co. Ltd, which owns The Times of India. He declined to say whether there was a timetable for this.
Higher literacy and rising disposable income has led to progressive growth in the readership of regional newspapers, Kansal said.
The Hindu group’s publication will enter a crowded Tamil newspaper market and compete with established titles Dina Thanti, Dinakaran and Dinamalar. These three papers sell about 3.7 million copies combined a day. Along with smaller Tamil papers, this adds up to about 4 million a day.
The three papers are all well-established contenders. Dina Thanti is owned by the family of the late B. Sivanthi Adityan. Dinakaran was acquired by the Sun group’s Kalanithi Maran in 2005 while Dinamalar is owned by T. V. Ramasubbaiyer.
Although print is declining globally, India is unusual in that newspapers are projected to expand 15-18% with the bulk of this growth coming from regional products.
“Little surprise then that Kasturi and Sons would like to take advantage of its experience, brand recall and value in the regional space,” said Sanjay Salil, a media consultant who helped Malayala Manorama set up its news channel in Kerala.
According to Arun Anant, “the high growth—advertising and circulation—in the regional language newspaper segment encouraged us to launch this initiative. We have a long-standing relationship with the country’s top advertisers and a powerful distribution network.”
Also, in the absence of the kind of price wars that have reined in rates elsewhere, Tamil newspapers raised their cover prices five years ago and now sell at between Rs.3 and Rs.4.
Also, some of the conventional wisdom about regional-language papers don’t seem to apply.
For instance, luxury brands such as Audi, Jaguar and Mercedes-Benz advertise in Tamil newspapers, something that wasn’t seen a few years ago. Nissan, Citibank, Lufthansa, Samsung and Sony are some of the other brands increasingly making their presence felt in the local-language dailies.
“The fact is that there has been a myth or a mindset all along that only English-speaking audiences can afford luxury products,” said Vijay Bobby, general manager, marketing, at Dinakaran. “Even though vernacular dailies were always suited to carry such ads, it is only over the last couple of years that the advertisers have realized this.”
In 2011-12, the advertising carried by the south Indian media outlets was estimated at Rs.21,190 crore. Of this, the print media had the second largest share of 29% after television’s 58%, according to a report by Deloitte Touche Tohmatsu India Pvt. Ltd and the Federation of Indian Chambers of Commerce and Industry (Ficci). This is seen growing at a compound annual growth rate 14% by 2016.
“Market dynamics have shifted from big towns to smaller places. This is where the sales volumes for most products categories are coming from,” said A.S Raghunath, an independent print media consultant. Besides, it is difficult to ignore the readership numbers of vernacular dailies. “Out of the top 10 papers in the Indian Readership Survey, nine are vernacular dailies,” said Raghunath.
Advertisers are aware of how the demographics work and the gaps in the market.
“The circulation of The Hindu and Dina Thanthi may be comparable in Chennai but the readership of the vernacular newspaper has grown by 30%,” said Antony Joseph, who heads the Chennai operations of advertising agency DDB Mudra.
On the one hand, Kasturi and Sons is tapping the growth in the Tamil advertising market but it’s also diversifying its risk in the face of competition from The Times of India in its backyard, Chennai, experts said.
According to Raghunath, The Hindu has negligible reach in smaller towns as its penetration in these areas is minuscule. Consumer response to its ads targeted at these regions would be poor, he said. “But with its Tamil newspaper it will be able to capitalise the advertisements in these markets,” he said.
Competitors aren’t too sure they have anything to worry about yet.
“While we cannot ignore the strengths of The Hindu, this is a new territory and we have to wait and see as to how well they will do and which slot they will be able to fill,” said Bobby of Dinakaran.
Dina Thanthi executives said they couldn’t make a judgement until the paper is launched.
“We have to see the product and its content to assess who it will target and therefore who gains or loses,” said Chandrasekaran, general manager of Dina Thanthi. “Ultimately, the market and its consumers will determine the product-worthiness of the brand.”
Bobby added that Tamil readers are used to a particular type of canvas in terms of editorial, layout and font. If The Hindu does something very different, it may not be as easily acceptable as these may be in a new English daily.
Incidentally, Kasturi and Sons sold a local English news channel it launched with NDTV to Dina Thanthi in October 2011 for Rs.15 crore as it didn’t do too well.
Meanwhile, some within the group are doubtful about whether Kasturi and Sons should venture into a new area as running a regional newspaper is not the same as running an English daily, and could leave it open to a different set of pressures.
When it is launched, the Tamil paper from Kasturi and Sons will be the sixth in the market.
“It’s not going to be easy to create readership and it will require time,” said 45-year-old P. Jayaraman, secretary of the Chennai Newspaper Distributors Welfare Association.
HT Media Ltd, publisher of Mint and Hindustan Times, competes with The Hindu and The Times of India in some markets.