After selling newspapers almost for free to kill competition, build up circulation, increase advertising rates and making a killing, Indian publishing houses are in the middle of a major crisis.
First rising oil prices took newsprint prices to new highs. Then the rupeer-dollar exchange rate played havoc with suplies. Later, the slowdown hit advertising (which accounts for 85 per cent of the income) with signs of a turnaround still not visible.
Result: the cover prices of newspapers today barely cover for the cost of the newsprint on which the paper is printed, and in the words of N. Murali, the managing director of The Hindu, “the bubble is about to burst“.
Publishers are now talking of incrementally increasing the cover price of newspapers every few months to take it all the way to Rs 6 or Rs 7 per copy per day. The question is, will consumers used to having a paper delivered for dirt-cheap prices, oblige?