Being in a B-School has a few (but not many) advantages. One of them is that you get pretty cheap Newspaper and Magazine subscription offers. One such offer that we got yesterday was for The Hindu Business Line. Rs.180 for 6 months which works out to 1 Re per day. When I used to subscribe before MBA it used to be at an average of 4 Rs per day. So when they can give 4 Rs paper for 1 Re, I thought why can't they distribute it for Free?
It isn't that bad an idea as it looks like though.
1) Anyway the Newspaper publishers earn majority of their revenue from the advertisers and not through sale of News papers.
2) Other Media Businesses like TV, Internet and Radio distribute content to users for free.
3) They can attract a large number of readers or at least buyers or takers by giving it for free.
Still it is a pretty bad idea. Otherwise it would have been already implemented.
1) In TV, Internet and Radio the distribution cost to each user is almost zero. Charging the users will only drive them away. In Newspapers and Magazines it is different. Printing each Newspaper and distributing it is costly and there is cost involved for each user.
2) If it is given for free. Everybody will start subscribing, whether they read it or not. So how many copies to print? far too many.
3) On what basis will advertisers know to how many audience are their advertisements reaching? Not straight forward. A separate survey needs to be conducted to find out how many people actually read them. So this will not be a favorite channel for advertisers. You don't collect money from readers and now you have driven the advertisers away. With both the revenue channels being closed, giving News papers for free makes sense only for charity purpose.
4) To make a print that many number of copies a large number of trees need to be cut. So much of paper waste is generated. Distribution becomes a massive exercise. So it doesn't make sense even for charity purposes.
5) When you charge a price that is higher you are conveying the advertisers that users don't mind paying that price to read the content. Or the users are savvy.
I tried to find numbers on the share of advertising revenues and sales revenue of the total revenue generated and expenditure details on printing, distribution, staff and so on. But there are hardly any listed News Paper company to give those details. Now the next question is why aren't News Paper companies not Public?
Here in the UK, newspapers are free. People pick them up in the underground train stations in the morning and dump them back at the designated "recycling" spots :)
ReplyDeleteAgreed this will not work in India for sure :)
Thanks for the information, I didn't know about this. Yes, it won't work here. You know how people will handle anything that is free ;-)
ReplyDelete