The Indian news publishing industry is currently in a precarious situation, grappling with escalating input costs that are straining financial sustainability. As publishers strive to navigate these turbulent waters, many are advocating for an increase in advertising rates to mitigate the financial pressures they face.
In a recent discussion, Mohit Jain, Chief Operating Officer of Bennett, Coleman and Co. Ltd (Times of India Group) and Vice Chairman of ABC, articulated the pressing need for a reevaluation of advertising rates to keep pace with rising costs. Jain noted, “The industry is under severe inflationary pressure, driven by the rupee’s depreciation, higher newsprint costs, and rising fuel prices. Advertisers across categories—ranging from dairy and FMCG to automobiles—have passed on these escalating input costs to consumers through price hikes. Publishers are facing similar pressures and urgently need a corresponding revision in advertising rates.”
Jain emphasized the necessity of a 15-20% increase in advertising rates to offset skyrocketing newsprint and distribution expenses. The enduring value of credible news environments remains intact, yet the costs of producing and delivering newspapers have risen significantly.
M V Shreyams Kumar, Managing Director of Mathrubhumi and a seasoned voice in the industry, echoed this sentiment. He asserted, “The economics of print publishing are becoming increasingly unsustainable without an upward revision in ad rates.” Kumar pointed out that steep increases in crude oil prices, newsprint costs, and currency-related volatility have compounded the challenges for publishers. He urged advertisers to engage in a serious conversation about rate revisions, demanding at least a 25% increase to help cover rising costs associated with credible journalism.
Despite several appeals, publishers have noted that major advertisers have largely remained non-committal regarding these proposals. Jain and Kumar both stated, “We have been seeking a rate increase for some time, but advertisers have not responded yet.” Nonetheless, print media continues to attract significant national advertisers across various sectors such as FMCG, automobiles, consumer durables, retail, real estate, education, and financial services.
Sujata Gupta, Secretary of the Digital News Publishers Association (DNPA), underscored the reasonableness of publishers periodically reassessing their commercial pricing amid rising production costs. However, she noted that any decisions regarding ad rates are made independently by individual publishers, influenced by their specific market dynamics.
The demand for higher advertising rates is not a novel issue. The Indian print industry, generating over ₹20,000 crore in advertising revenue, has experienced subdued growth over recent years, despite traditional high fixed costs associated with newsroom operations and physical distribution. The current inflationary cycle has only widened the gap between operating costs and advertising yields.
Publishers articulate that newsprint remains one of their largest expenditures, with prices closely linked to global supply chains, shipping costs, and currency fluctuations. As Jain indicated, any depreciation of the rupee against the dollar significantly raises the cost of imported newsprint, alongside inflation in fuel costs that disproportionately affects newspapers with extensive circulation networks.
In light of these challenges, publishers argue that if advertisers regularly modify product prices to offset rising input costs, similarly, media companies should be entitled to adjust advertising rates when production expenses escalate.
However, the conversation is not straightforward. A marketer, who preferred to remain anonymous, highlighted that advertisers weigh any potential rate increase against reach, readership, impact, and the broader landscape of digital, television, outdoor, and retail media. This intricate dynamic has been further complicated by the hiatus of the Indian Readership Survey since 2019.
From the advertisers’ perspective, the pressure to optimize media spending is palpable. Factors such as increased scrutiny of marketing budgets and a heightened emphasis on measurable outcomes are reshaping advertising strategies, even as print remains primarily associated with trust and premium content.
The dual challenge for Indian publishers lies in needing to sustain crucial revenue from print while contending with rising physical production costs. Meanwhile, the digital landscape grows increasingly significant, albeit fraught with volatility and evolving consumer behavior. As they strive for financial stability, many legacy news organizations continue to view advertising, particularly print, as a vital revenue stream.
The overarching debate concerning advertising rates also raises pivotal questions about how advertisers value news media in an era where the cost of credible journalism continues to rise, and the economics governing newspaper distribution are becoming ever more challenging.
In another concerning development, the Government of India has reduced rates for widely used digital advertising formats by nearly 50% over the past eight years, the latest revision being in December 2024. The decline in Cost Per Thousand Impressions (CPTI) for banner ads under Group A publishers illustrates the widening gap between government-imposed rates and the realities of a rapidly changing digital advertising market. A frustrated publisher lamented, “Despite repeated concerns, we were unable to persuade the government to revisit the pricing framework.”
The complexities of the current advertising landscape underline the necessity for a constructive dialogue between publishers and advertisers. As the news industry navigates these economic challenges, the outcome of this discourse will be instrumental in determining the future sustainability of credible journalism in India.
