Mumbai: Marathi dailies have embarked on a price war in Kolhapur, Pune and Aurangabad in an effort to boost circulation and, consequently, use this to garner a larger share of advertising.

Photograph by Abhijit Bhatlekar; graphic by Yogesh Kumar/Mint

Lokmat, Sakaal, Pudhari and Punyanagari have cut back cover prices since January to boost circulation and attract advertisers.

In Kolhapur, Sakaal, published by Union minister Sharad Pawar’s nephew Abhijit Pawar’s Sakaal Media Group, slashed its cover price from Rs3 to Re1. Pudhari, run by Pudhari Publications Pvt. Ltd, now sells at Rs2 compared with Rs3 earlier, while Lokmat and Punyanagari have dropped their cover prices from Rs2 to Re1. All the price cuts have come in the past six weeks.

Sakaal and Punyanagari have also lowered prices in rural Pune and Aurangabad. Lokmat, too, costs Re1 in Pune now, against Rs2 earlier.

Lower cover prices means losses in subscription revenue for the newspapers, estimated to add up to Rs50 crore this year.

It also means the publications boost circulation, which could help them grab a larger share of the advertising market for Marathi dailies, expected to grow by 25% this year, according to a publisher who did not want to be identified.

Janardhan Pandey, business director at media agency Mudra Radar, said print ad revenues stood at around Rs650 crore in Maharashtra, without counting capital Mumbai. “With Mumbai, the number would touch Rs1,000 crore," he said. “Even advertisers stand to benefit from this kind of cut-throat competition. As circulation moves up, there’s better reach delivered and better deals (cost-wise). It’s a win-win for advertisers."

Satyajit Sen, chief executive, Zenith Optimedia Pvt. Ltd, said revenue lost due to subscription hardly affects publications. “Subscription is a very small part of their overall revenues. But the challenge would be to keep up the market share," he said.

Reduced prices are already making a difference in circulation figures.

“We will soon touch 20 lakh copies nationally," said a Lokmat executive. “At last count, we had crossed 15 lakh copies as per the Audit Bureau of Circulation." Lokmat has 17 editions, including Mumbai, Pune, Kolhapur, Aurangabad and Nagpur.

Pudhari, which currently sells 500,000 copies, expects to add another 150,000 copies with the price cut and its recent launch in Mumbai.

Executive director and managing editor Yogesh Jadhav said the newspaper’s losses in Pune—accruing from selling more copies at a lesser price—were lower than those of Sakaal. “Sakaal sells at Rs2 in Pune city and comprises 28 pages. We give 20 pages for Rs2."

Pravin Shingote, publisher (Mumbai), Shree Ambika Printers and Publications, which prints Punyanagari, said Sakaal and Lokmat had initiated the price war, forcing it to follow suit.

The newspaper currently has editions in Mumbai, Thane, Nagpur, Pune, Kolhapur, Nashik, Aurangabad, Jalgaon and Akola.

But while publishers and advertisers make hay, the price war has effectively halved vendor commissions, which stand at 30% of the newspaper’s cover price.

The Pune Newspaper Vendors Association is up in arms against Lokmat. Its president, Pramod Parulekar, said the 3,000 vendors in the market were not distributing the newspaper.

“Vendors across Maharashtra are suffering a shortfall in margins because of reduced cover prices on Marathi dailies. The problem is not related to Lokmat alone. But it’s up to each vendor association (in each market) to take action against the newspaper," said Parulekar.

The association has demanded a price revision, suggesting differential pricing—which varies from day to day—in the meantime.

But a Lokmat executive said, speaking on condition of anonymity, the issue had been sorted out with vendors in Pune and the newspaper was being distributed.

Uday Jadhav, chief operating officer of Sakaal Media Group, said price cuts had been effected after talks with vendors’ bodies to minimize losses. “We guaranteed that their shortfall was temporary and that they should cooperate."

Sakaal was now considering going back to its original price in markets such as Aurangabad, he added.

Price cuts are effective only in the short term, said Anita Nayyar, Media Planning Group’s chief executive for India and South Asia.

For instance, Dainik Bhaskar increased its share in the Rajasthan market by slashing its price, she said. Nayyar also emphasized the need for publishers to sort issues out with vendors.

“In certain cases, the publications try and make it up to the vendors; they reimburse the losses. Otherwise the strategy could backfire and distribution could be affected," she said.