In India, much of the available information about the media industry, such as details of viewership, circulation, and editorial and business practices, is fragmented and incomplete. Partly as a result, there are few rigorous surveys or studies of the media.
However, there are some publicly available data sets that can be productively mined for insights. For this year’s media issue, we extracted data from two sources: the Department of Advertising and Visual Publicity, or the DAVP, and the Ministry of Corporate Affairs. We used these data to explore some trends in government advertising spend, and in newspaper revenue at five of the country’s largest dailies. The results of the DAVP analysis suggest that the government’s advertising spend is heavily skewed towards targeting a small, elite section of the population. The MCA data, meanwhile, suggest that commercial interests, such as expanding investment portfolios and advertising revenues, may dominate editorial considerations in some of our leading publications.
1/ THE DAVP SPEND
THE DEPARTMENT OF ADVERTISING AND VISUAL PUBLICITY, which falls under the Ministry of Information and Broadcasting, oversees the central government’s entire advertising spend. It allocates money for publicity about programmes such as Swachh Bharat and the NREGA; announcements about new infrastructure projects; health campaigns; recruitment notices for the army and educational institutes; and a host of other initiatives run by central government ministries. It doesn’t, however, handle state advertising budgets, or the central government’s significant expenditure on tender advertising or public-sector-undertaking advertising. Industry estimates for the combined spend under these other heads are several times higher than the DAVP spend.
The most extensive data available from the DAVP pertains to its print spend. For the 2013 fiscal year, which ended on 31 March, it included details of spend by publication—specifying the amount spent, space bought in square centimetres, and place of publication—for around 4,750 publications. The department’s print spend for fiscal year 2012 was Rs 401 crore, out of its estimated annual spend of “approximately Rs 700–750 crore.”
We looked at spend across different metrics—in election years, by language, by region and by publication—and found that the DAVP money seems to aimed primarily on reaching the elite—specifically, English-speakers located in the country’s centres of political influence.
BY ELECTION YEAR
The last year for which DAVP data are available is fiscal year 2013. In the six-year period before this—beginning in fiscal year 2008—the DAVP released advertisements worth Rs 1,960 crore to around 5,300 publications (Figure 1).
The pattern of spending over time reveals a link to the country’s electoral calendar. In these six years, the highest spike in spending growth occurred in the 12-month period ending on 31 March 2009, just before the country voted in general elections (Figure 2).
The spike preceding elections occurred at the state level, too (Figure 3). Andhra Pradesh, Haryana, and other states that went to polls in April 2009, saw a peak in spending leading up to elections, and a drop in the following year; the same was true in Assam, Kerala, and other states that went to the polls in April 2011.
This pattern, at the national and the state level, suggests that though the DAVP is supposed to spend money in the public interest, the budget may well be used as a political lever by those in power at the centre.
BY LANGUAGE
As per its norms, the DAVP aims to balance spending across publications with, among other factors, different circulations and coverage areas, and in different languages. Approximately 15 percent of the mandated ad spend of every ministry or department should go to small newspapers (defined as those with circulations of up to 25,000 copies per publishing day), 35 percent to medium-sized ones (between 25,000 and 75,000 copies) and 50 percent to big ones (above 75,000 copies).
In allocating money to publications in different languages, the DAVP must spend 30 percent of its budget on English papers, 35 percent on Hindi ones and the remaining 35 percent on papers in regional and other languages. If any ministry wishes to deviate from these norms, it is required to provide “full and detailed justification” while placing its order, which should then be communicated to the Ministry of Information & Broadcasting “for information and necessary action.”
But, over the last six years, the DAVP hasn’t quite adhered to this policy. English-language publications commanded 37.7 percent of the spend; Hindi publications received 33.4 percent (Figure 4). Further, although one might intuitively expect that the share of spending allocated to each language should be proportional to the share of the Indian population that speaks it, this hasn’t been the case (Figure 5). English received 37.7 percent of the DAVP’s money although only 12.2 percent of the population speaks the language (by the 2001 census numbers, the latest available). Every other language received a smaller share of spending than warranted by the proportion of the national population that speaks it.
BY STATE
Delhi received the greatest share of DAVP money, followed by Maharashtra (Figure 6). Overall, the spending is top-loaded: the top ten states by spend (Delhi, Maharashtra, Uttar Pradesh, Andhra Pradesh, Tamil Nadu, Rajasthan, Gujarat, Madhya Pradesh and Karnataka) received 77 percent of the budget. The remaining 23 percent was distributed between the other 25 states and union territories. A radar plot of 14 states’ share of advertising money and their respective shares of the national population, and the difference between them, shows that in many states, such as Maharashtra, Rajasthan and Tamil Nadu, the advertising share was close to the state’s population share (Figure 7). In Bihar and Uttar Pradesh, the gap widens—both have a far greater share of the population than the proportion of advertising money they received. In Delhi, the gap widens in the opposite direction—though it is home to only 1.4 percent of the population, it received more than 27 percent of the DAVP spend.
BY CITY
Delhi hosts the country’s highest number of publications (3,817), and also received the greatest share of advertising money—Rs 530 crore over the past six years (Figure 8). Mumbai followed at a distant second (446 publications, Rs 129 crore). Lucknow has a high number of publications (2,568) but received a relatively small share of the advertising budget (Rs 22 crore). Overall, the list of the top ten cities by advertising share was dominated by metros and state capitals; together, they accounted for 57 percent of the total advertising spend.
However, in terms of the number of publications (Figure 9), Delhi is the only major metro in the top ten. Eight of the top ten cities by the number of publications hosted are in north and central India—Ahmedabad and Hyderabad are exceptions. Surprisingly, the metros are not the most expensive cities to advertise in (Figure 10), though they are present in the top ten. Secunderabad is the most expensive city to advertise in—at Rs 130 per column centimetre, it is almost twice as expensive as Mumbai. Thrissur is second on the list, at Rs 101 per column centimetre, followed by Delhi at Rs 72.
BY PUBLICATION
In the six-year period between fiscal years 2008 and 2013, the DAVP released advertisements worth Rs 1,960 crore to around 5,300 publications (Figure 11). Of these, the Times of India received the most money (Rs 193 crore), while Chhattisgarh Jwala received the least (Rs 1,557). Strikingly, the third-highest recipient of money from the DAVP, which falls under the Ministry of Information and Broadcasting, was a publication of the same ministry—Employment News,a weekly published in Hindi, English and Urdu out of Delhi, and with a declared monthly circulation, across all languages, of 16 lakh. Many regional publications that are in the top ten by circulation, such as Malayala Manorama, Daily Thanthi and Lokmat, are ranked much lower by their advertising share (Figure 12).
Measured by the maximum cost per column centimetre in any one year, the most expensive publications to advertise in make a surprising list (Figure 14). None of the top ten publications by circulation were in this top ten; rather, the publication that commanded the highest annual average cost for space was Punjab Kesari, at Rs 5,445 per column centimetre in the fiscal year 2009.Next was Aj, a Hindi-language broadsheet headquartered in Varanasi, where it cost Rs 4,130 per column centimetre to advertise in the same year. DAVP figures for Delhi suggest that the Indian Express receives far less government advertising money than the Times of India and the Hindustan Times. (Figure 13).
2/ THE MCA FILINGS
EVERY COMPANY, whether or not it’s listed on a stock exchange, is required by law to file a financial statement with the Ministry of Corporate Affairs each year. This covers a range of documents—including an annual report, a balance sheet, a profit-and-loss account, and shareholder and board resolutions—and information about shareholding patterns, and equity infusions and transfers.
We analysed the MCA filings of five major newspaper publishers—Bennett, Coleman and Company Limited, or BCCL; HT Media; DB Corp; Jagran Prakashan; and Kasturi & Sons—to see how they are faring at a time when, across the world, print publications are struggling to survive. Of these five companies, the leader in most aspects—circulation, revenue, growth and other metrics—is BCCL, which publishes the Times of India. BCCL also leads the pack in devising business strategies, which others then adopt. While these companies have staved off financial crises so far, some of their strategies—such as acquiring equity in other companies—raise vital questions about the changing nature of journalism, and their editorial independence.
GROWTH
Between 2011 and 2014, all five media houses showed growth in revenues for each year, with their flagship publications serving as cash cows, or steady generators of revenue (Figure 1). They also all showed a healthy cash flow from operations, which is a good indicator of a company’s financial health, its ability to expand its operations, and potentially pursue growth in other fields. BCCL was the clear leader, with cash flows representing 34 percent of its revenue of Rs 5,150 crore in the fiscal year 2013, and 25 percent of its revenue of Rs 5,660 crore in 2014 (Figure 2). Both these percentages were significantly higher than those of leading companies in other industries in 2014, such as Infosys (19 percent) and Hindustan Unilever (13 percent).
REVENUE STREAMS
All these companies made substantially more money from advertising than from the sale of their publications (Figure 3). To compare growth in revenue streams between 2011 and 2014, we assumed a base revenue of one hundred for each publication and plotted the percentage growth for each year (Figure 4). We found that although advertising brought in the major share of revenue, its growth has been less steady than that of revenue from sales of publications—the fiscal year 2013 was particularly slow for advertising, with HT Media posting negative growth. Over this three-year period, BCCL hiked the cover price of the Times of India by 50 percent, from Rs 3 to Rs 4.5, in this period, suggesting that it sought to compensate for sluggish growth in advertising revenue by boosting revenue from sales.
PRIVATE TREATIES
In recent years, all these media houses have begun picking up equity in other companies, with BCCL investing the most money (Figure 5). In some cases these are straightforward investments, with the media companies paying for equity; in others they are barters, with the media company receiving equity in return for advertising space—deals known as private treaties. These deals, which are classified as non-current investments, are often criticised for testing, if not breaching, the wall between the editorial and business divisions of a media company.
Since 2004, BCCL has made 523 equity deals with other companies (Figure 6). Real estate dominates its investment portfolio, with technology and health following (Figure 7).
PAYROLL
By law, companies are required to declare the names and salaries of all employees who earn above Rs 60 lakh a year. However, a company can claim an exemption from this rule: it can, after receiving clearance from the designated government authority, omit this information from its annual report, claiming that not doing so would make the physical copy of the report unwieldy in size. (Shareholders should still be able to access the information by request.) Even though publishing these salaries online would allow companies to maintain a high degree of transparency without bulking up their physical reports, HT Media, DB Corp and Jagran Prakashan did not do so, and used the exemption clause to release only limited information.
In the case of BCCL, whose salary numbers are available, the emphasis on the business side of the company is clear, with the top echelons dominated by non-editorial staff (Figure 10). Of the 81 BCCL employees whose salaries for 2014 were disclosed, only nine were journalists. Even without including the salaries of the group’s proprietors, the Jain family—Vineet, Samir and their mother, Indu; Samir’s daughter Trishla and her husband, Satyan Gajwani—business salaries still comprised 89.5 percent of this part of the payroll.
Most of these companies have controlled employee cost by moving towards a contract system of employment (Figure 8). Employee costs at Kasturi & Sons, which more widely followed the wage board system, were higher than 30 percent of revenues for both the years under consideration.
