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Major heads of income in media
- 1. Major heads of income Submitted By :- Swati BAMC – Final Yr. 20160440002
- 2. Introduction As the world of media moves beyond its traditional boundaries, media operators need to broaden their thinking about potential revenue sources. In a connected world, the possibilities transcend the classic advertising, sales and subscription models. Of course a key aspect of potential revenue streams is the value creation that merits payment. While the general categories of value added by media have not changed, their relative importance definitely has. To understand potential revenue models, you must also be clear on the distinctive value add of your media offering.
- 4. Circulation This is the money brought in the cover or retail price of a magazine or a newspaper. The revenue that comes in after deducting trade margins and the cost of unsold copies. The ratio could change depending on a no. of things like language, price, and frequency.
- 5. Advertising About 80% of publication revenue come from advertising and the rest from the circulation. This again could vary by language, frequency, price, market etc. it addresses. The best way to look at ad growth is to look at both advertising rates and volumes.
- 6. Subscription Inspired by publication like Readers Digest and magazines like Outlook and A&M launched high profile subscriptions scheme. Earlier these were treated as a revenue stream. The fact is that most subscriptions schemes are subsidised with free gifts. While they do bring in cash, they also involve a huge cost of more copies to be printed and transported. Subscription schemes are really about buying circulation. That is unless the magazine is actually making a profit on every copy sold and spent to subscribers which it does not. Most subscriptions schemes are used to ramp up circulation no. and then used to demand a higher rate from advertiser.
- 7. Brand extensions There are several ways in which a magazine or a newspaper can expand the same brand to top into differently revenue streams. Events to programs, CDS, seminars, roundtable, syndication of content. This is specially true for specialised magazines or papers. “For us they all started off by helping the print brand grow. Now they contribute to the top line and bottom line.”, admits Shyam Malhotra, director of cyber media, a specialist technology publisher firm.
- 8. Online Medium/Internet Most Indian newspapers and magazines do have a presence on Internet. Although many don’t even think there is much the Internet can do. The net is a very hyped up medium. It is not a threat to print media, it is a threat to T.V. because access time is entertainment time. Newspaper are part of routine. The no. for revenue and cost and therefore, margins vary depending on several factors.
- 9. Position Publication that are no. 4 or 5 in a market are usually the worst off. In Kolkata, the market leader, Telegraph gets the lion’s share of ad revenues directed at the city because of its top position.
- 10. Language Most leading publications languages like Malayala Manorama have a high circulation. That means extremely high printing costs. Typically, even top language brand can’t change more than, say one- third mandate amount of wages to be paid to journalists.
- 11. Niche v/s Mass Circulation revenue for the niche magazines as a percentage of total revenue could be much higher than the usual 10-20%. The price insensitivity also makes niche magazines less dependent on advertising revenues.
- 12. Conclusion At the core of the framework is the concept that the more value added the more revenue that can be generated. While most newspapers offer the same types of revenue-generating formats from classifieds to subscriptions, in order to successfully benefit from them, it’s important to know which are valuable to users.