Thursday, March 13, 2008

Fast growth disguises challenges

I have become increasingly convinced in recent months that print publishers in China and India have a problem: they are growing too quickly. When ad pages are still growing, there is less incentive to take some of the tough decisions being faced by their counterparts in the US and Europe.

However, despite the active environment for new magazine and newspaper launches in both the Asian giants, they are not immune from the underlying changes in the ways in which media is used. Once those changes begin to take hold, they will face challenges just as great as those trying publishers elsewhere in the world.

I was relieved to see that I am not alone in this view when I read the comments of India Today CEO Ashish Bagga over on I encourage you to read the whole thing but the jist of his point is:

“though print is growing, if you look at the advertising projections for the next 10 years, sure, it’s going to grow, but its it going to grow the way it grew? There are other media forms, including mobile, and telco’s are looking to address the advertising potential. Advertising revenues for print are increasing, but it’s increasing at a decreasing rate. The moment you reailze that gross margins are 25 percent, 23 percent, 20 percent - what’s the trend? If we don’t sow the seeds of investment for the next generation, we have a problem on our hands.”

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