Wednesday, August 24, 2005

 

Newspaper-War Correspondent: 24/08/05

War Contained in Mumbai?

Latest reports from the battlefront suggest that the TOI is feeling the heat in Mumbai, even though the summer season is passing.

Recent media reports hint at the possibility of ad-rate tariff competition intensifying between the three major players now in Mumbai- the TOI, the HT and the DNA. This development should give the southern newspapers a little more time for manoeuvre before the media war spills into their backyard. Although print media circles are still agog with rumours of the impending entry of the TOI into Tamil Nadu, it may be safe to assume that this development is unlikely in the near future.

As I've argued earlier, however, the best defence for papers such as The Hindu may actually be offence- i.e. start planning your expansion northward!

Article from the Business Standard

A fight to the finish: Advertisers, vendors and consumers emerge winners in Mumbai’s print media war.

One month after Mumbai’s eagerly awaited media war began with the entry of two new English language dailies, the story is going around that an advertising agency professional kept a Times of India ad sales executive waiting for 30 minutes!

The story is told with relish, as for years the reverse (ad agency executives invariably waited to see TOI’s response team) was true of the Mumbai market, since The Times of India from the Bennett, Coleman stable, has been a virtual monopoly in India’s richest city.

With the Mumbai forays by Hindustan Times and Daily News & Analysis (DNA—promoted by the Dainik Bhaskar group and Zee), the city’s advertising industry happily anticipates the increased level of competition.

“Media planners are generally thrilled as two strong publications have entered the Mumbai market almost together,” says Nayan Desai, head of print media buying at Lintas.

Adds Suraj Suvarna of media buying firm Carat, “Competition is welcome. We would be happy if a paper has even half the circulation of TOI. We’re recommending DNA to clients with smaller budgets.”

Lintas’ Desai, however, does not buy the argument about a change of attitude at TOI. It still holds nearly 80 per cent share in Mumbai’s Rs 1,500 crore print media market.

Besides, advertising in HT and DNA will take time to pick up in the absence of readership survey numbers. But Farokh Balsara, head of Ernst & Young’s media practice, believes that “HT has done well. It has targeted Delhiites in Mumbai to sell to and is offering advertisers a Delhi-Mumbai package.”

Predictably, HT and DNA’s ad rates (Rs 800-840 sq cms) are almost half of TOI’s. So, has the market leader softened its rate card?

On the contrary, on August 15, TOI hiked its per square cms tariff from Rs 1,200 sq cms to Rs 1,500 square cms besides making it mandatory for those buying a national package to buy its tabloid Mumbai Mirror at an additional Rs 100 per square cms.

But senior executives at media buying agencies claim that the rate increase is only on paper and TOI is offering generous “incentives” to its larger clients.

HT’s circulation in Mumbai is still small though — industry estimates suggest that HT sells between 75,000 and one lakh copies, compared to TOI’s 5.1 lakh.

Though officially DNA claims to sell 2.95 lakh, trade sources estimates vary wildly from 1.5 lakh to 2.25 lakh copies a day. Says Dainik Bhaskar (that’s co-promoting DNA) director Girish Agarwal: “We are rocking in Mumbai.” Despite several attempts to speak to them, HT Media Ltd and Bennett, Coleman executives did not offer their official comments.

Both HT and DNA are trying to capture the Mumbai market through line sales, the subscription route and news stand sales. HT offers a year-long subscription for Rs 398 which works out to barely a rupee per copy.

Observes Lakshmi Narasimhan, director CTG, from media buying agency GroupM, “HT’s is a good strategy. Readers are locked in for a year and a base circulation is ensured.”

The new papers may not exactly be flying off the news stands, but pricing seems to have worked in their favour. On the stands, HT costs Rs 2.50 while DNA comes for Rs 2 compared to TOI’s Rs 4 per copy (with a free copy of the group’s new tabloid, Mumbai Mirror).

Executives in the DNA camp claim that TOI’s news stand sale has dropped by 35,000 copies as a casual buyer prefers to pick up the Rs 2 paper.

Adds Ashish Pingle, who runs a couple of Wheeler stalls at platforms, “Readers seem to like DNA and it’s not only because of the price.” Says Rajesh Jain, national director, ICE , KPMG, “DNA’s strategy is to push through distribution and pull the consumer through hoardings. We need to give the experiment with the vendors some time to see how it works.”

The companies are battling it out on the distribution front amidst much mudslinging. Charges of buying out vendors to ensure they do not pick up rival newspapers are flying in all directions.

Both DNA and HT are offering vendors a one rupee commission. To counter this, TOI is offering Rs 1.75 since Mumbai Mirror is distributed free with the paper.

After years of depending on TOI, newspaper vendors and agents, like advertisers, find they have a choice. Some have bagged contracts from HT to sell at traffic signals while others are getting incentives from DNA to source subscriptions. Any vendor who can locate a potential subscriber gets Rs 6.

In a bid to earn more, vendors are straying from their assigned territories. They also claim that competition has softened TOI — “it actually takes back unsold copies now”. Trade sources also claim that TOI has increased its print run to make sure there is no shortage.

Media buyers believe that from a content perspective, the new papers are still evolving. HT, they say, has not shown its “political” character yet. Says Narasimhan, “It will take time for the personality of the brand to emerge, but DNA is nicely packaged. It hasn’t lived up to its huge expectations though.”

Sandip Tarkas, head of Media Direction, believes that “The Times of India is refreshingly different from what it was six months ago. Other than more colour and a free 48-page Mumbai Mirror thrown in, it’s become more readable. ”

So, is Mumbai’s print media market overcrowded? “Confusing — yes. Overcrowded — no,” says Tarkas. Mumbai city consumes just 75 per cent of the English newspaper copies that Delhi does and not many households are 2-3 paper homes. “I think the Mumbai print market can easily support this level and more,” says Tarkas.

Points out Girish Agarwal : “If Gujarat’s advertising market could grow 35 per cent after Divya Bhaskar’s entry, Mumbai must grow at least that much if not more.” Adds Jain: “The operating market will expand because customers will demand better products.”

And, therefore, more players will be attracted to the market. Unlike in the past, when newspapers failed to take off, this time round the players have deeper pockets.

But is there a clear winner in round one of Mumbai’s media war? “You can’t predict the outcome of a one day match after the first over,” says Tarkas. However, first round shows that TOI is a very strong brand in Bombay — “a fact we knew already”, he adds.

But as advertising in the new papers trickles in, TOI will have to run hard to retain its numero uno position. The verdict then is that the winner, so far, is the consumer.

Friday, August 19, 2005

 

Indian Media Boom Continues Unabated

Cui Bono: Who Benefits from the Media Explosion in India?

As the article from Indiantelevision.com (below) suggests, television and print media initiatives are on a steeply rising curve in the country, especially with FDI regulation laws in print media being relaxed recently. Fierce competition has already begun, mostly in Mumbai and the south for the print media (see earlier blog posts) and nationally for the upcoming 24-hour news channels.

As is usually the case in free-market capitalism, one would logically expect the consumer to benefit as a consequence of cut-throat competiton. However it is not clear that this outcome will be attained, given that price wars abound as newspapers resort to 'raddi economics' to show artificially boosted circulation figures (again, refer to older posts).

As Sardesai (below) and indeed many before him have argued, the survivors of this internecine media war will be determined by media houses' ability to differentiate themselves from the competition. And, as I have suggested before, for newspapers such as The Hindu, which have built up a century-old reputation for credibility and seriousness, the means to differentiation might be in the realm of news analysis and localisation. Having said that, this is also a time of expansion in the industry, and no institutional player can therefore afford to limit its geographic spread and regional ambitions.

In this context one does wonder what strategy, if any, The Hindu is contemplating, as it watches its competitors making bold forays into the FDI domain and facing each other head on in different theatres of war.

Article from Indantelevision.com

MUMBAI: News is here to stay and the market still has the capacity to absorb new entrants in a sector that has been witnessing explosive growth - and that applies to both print and television. That was the pivotal point that came through at the special interactive panel discussion held in Mumbai yesterday by CNBC TV-18 in association with DNA .

The panel comprised Tam India CEO LV Krishnan, DNA editor-in-chief Gautam Adhikari, Broadcast News editor-in-chief Rajdeep Sardesai, Star News CEO Uday Shankar and MindShare South Asia CEO Vikram Sakhuja.

Moderated by CNBC TV-18 anchor Anuradha Sengupta, the panel discussion titled - 'News v/s News: Will Indian consumers get the best of both worlds?' - had a certain amount of chutzpah and commanded the audiences' rapt attention.

The debate covered the manifold changes that had taken place over the media scenario in India over the last few months. A stark reality today is that with 16 news channels and 55,780 newspapers, Indians are flooded with information like never before. Gone are the days of the daily 9 pm news bulletin on pubcaster Doordarshan. The 24x7 news factor has set in the country and competition is hotting up.

With the plethora of new players entering the media market and a vigorous marketing blitz (as seen in the case of DNA) announcing the new arrivals, the media scene has built up expectations of the reader and viewers to a great extent.

But the fact of the matter remains that the market has not yet reached its saturation point. DNA's Adhikari said that it would take at least another 10 to 15 years for the television news space in the country to cross the saturation point.

Shankar, on the other hand said, "There are close to 30+ applications for news channels uplinking permission pending with the Information and Broadcasting (I&B) ministry today. Yet the time has not come for a flooding in the news channels' space. It's just a trickle. Three years ago Aaj Tak, Zee News and Star News were there in the market. At that time, the top two headlines on the channels were more or less same, but that's where the similarity ended. Channels today have to position themselves more aggressively to survive in this industry."

Shankar also stressed on the fact that the regional space was one to look out for. Speaking about the recently launched Star Ananda's success story, Shankar said, "We were market leaders in the Bengali news channels space in the first month itself. The audience was created overnight and we saw them lapping it up. There was this need gap that needed to be serviced and the demand was met by Star Ananda." He also stressed on the fact that viewers didn't want more news channels but wanted the kind of news that they were interested in.

Adhikari said that the Indian economy was at an infant stage of growth. "The Indian economy is growing at the rate of seven per cent and at that rate, it can take in a lot of new activity and that includes newspapers. We are in the initial stage of development and there has been a spurt in not just in newspapers but media activities. The market in Mumbai has changed and I feel that there is space for two or three more newspapers here. The only thing that will make the newspapers different from each other is competition itself."

Talking about the much hyped and expensive marketing campaign of DNA and pondering over the question whether the paper would be able to live up to the hype, Adhikari said, "DNA is a fresh newspaper, which looks different and is more in-tune with citizens' concerns. We are not trying to live up to the hype of our media campaign but to satisfy the curiosity, need and demand of the reader in a place where the demographics are very interesting."

The number crunching Krishnan began by saying that today the news channels in the country had an overall viewership of seven per cent. "India is one of the largest free news markets in the world with a whole lot of news channels and newspapers. The fact is that 45 per cent of homes in India read the newspaper and 50 per cent of individuals are able to get a cable connection. Hence there is a lot of scope and untapped market. Also there has been a good amount of growth in the advertising spends on news channels. In 2002, there were about 1700 brands advertising, today there are more than 2500 brands advertising on news channels," he said.

Talking about the fight between newspapers and news channels regarding breaking news first, he said that the fight is only a portrayed one and that they actually work in tandem. "When Sonia Gandhi resigned, 85 per cent of people who saw the headline in the newspaper that day spent an hour watching television news channels. On normal days, they don't spend more than 15 minutes on news channels on an average," he said.

He also pointed out that a good time to launch a news channel in a particular place was just before elections. He cited examples of Star Ananda launching just before the municipal elections in Kolkatta and TV9 launching in Andhra Pradesh prior to the assembly elections. Both channels were launched at the opportune time and were doing well, Krishnan said.

Speaking on the race among news channels to 'break news first', Krishnan said, "It's not important to break news first. It is important to cover the news well. The advantage lies with the channel that gives the event the best coverage."

Sakhuja brought in a marketers' perspective to the discussion. "Three years ago the amount spent on news channels in terms of advertising was Rs 4.5 billion. Last year the figure was Rs 7.5 billion and by the end of this year it is likely to reach Rs 8.5 billion. The print medium is also seeing an increase as the number of new markets and editions are coming up. But there is still scope for more. Both newspapers and news channels are growing well and print is acting as a catalyst to news channels. There is a constant need in people to be informed and hence new products will be lapped up well. The drivers in the news channels space will however, be the regional markets and the new advertisers will be seen on national channels such as retail houses, educational institutions and real estate sector."

He further added that while English news channels garner only 10 per cent of the total eyeballs, they grab a disproportionate one-third of the revenue. As far as the Hindi news channels were concerned, Sakhuja said that each of them did have a personality differentiating factor but stressed on sensationalism of news more than anything else.

Sakhuja concluded by saying, "The bottomline is that we are backing this bull-run but anyone who wants to enter this space better have a good proposition. The market place couldn't get better so people should get their thinking caps on."

The last speaker of the day, Sardesai, who is readying for the launch of his new news channel in collaboration with CNBC TV-18, started by saying that he was not going to hype the launch of his channel by a marketing blitz anywhere similar to that of DNA. "I would rather let our brand speak for itself. The consumer today is satisfied in terms of the quantity of news channels in the country but not in terms of the quality of content on these news channels," he said.

Speaking about NDTV's foray into the news segment in 1994-95 with a half hour news based programme on DD, Sardesai said that the industry had moved forward since then to a market where there were a number of players. "A private company started the revolution then by breaking the government's monopoly on news. Today the first phase of that revolution is coming to an end," he said.

Throwing light on the difference between Hindi and English news, he said, "Hindi news brought robustness, which English news lacked. It's time to marry the two. The time has come to get your hands dirty because people don't want journalists reporting from air when there are floods. They want them to be on the ground with them facing the reality. Specialisation is going to be the way forward by exploring new boundaries and hence bringing in new viewers."

Concurring with Adhikari, Sardesai too stressed on the fact that competition was always good in the space. "There is nothing like competition, which will give the Indian viewer what he wants - choice, expertise, involvement and exploring areas that affect him ('glocalisation' of news).

Another way forward for the news channels will be in providing alternate platforms of news like Internet and mobile telephony. There is an enormous opportunity out there, which is waiting to be tapped."

While the industry at large still ponders over the overkill of news channels in the country (add to that the impending launch of the Times Now and Broadcast News channels this year)and newspapers in Mumbai; the verdict among the experts on the panel was clearly that there is still room for more.

Thursday, August 18, 2005

 

The Start of Pro-Poor Wave in Indian Politics?

Do the poor finally matter?

Ever since the UPA government came to power last year, it would appear that the poor have become bigger blips on the radar of the ruling classes than they used to be. Especially in contrast to the former government's 'India Shining' eyewash, it seemed possible to believe that pro-poor policies may actually gain a pre-eminent position in the political agenda of the central and specific state governments.

Today, that promise seems to be gathering momentum, as the National Rural Employment Guarantee Act goes into force, with a guaranteed 100 days of employment to every rural household in the country, with a minimum daily wage of Rs.60. Of course this and other such large-scale pro-poor policies are likely to (and indeed should) be criticised for implementation problems, particularly those associated with rent-seeking incentives by local, district and state level bureaucrats and politicians. Regardless, the UPA government has doubtless taken a significant first step in even bringing such a policy onto the agenda, and in deep in the realm of coalition politics, succeeded in getting it passed.

Interestingly, state governments across India have also followed this example, including the recent announcement by the government of Tamil Nadu under J Jayalalithaa, of a massive social security scheme for small and marginal farmers whose lives are constantly threatened by the risk of debilitating shocks. Of course, successive regimes in this state have been trailblazers, even by international comparison, in terms of pushing through such universalistic redistributive measures. Note in this context that the state introduced the Chief Minister's Noon Meal Scheme as early as 1982, and its phenomenal effectiveness in reducing childhood malnutrition and increasing enrolment rates for primary education have played a role in the recent Supreme Court directive to all other states to follow suit (or at least attempt to do so). Nevertheless, such policies are at least less likely to encounter political obstructions in an atmosphere charged with much more (at least rhetorical) support for pro-poor redistribution.

Also notable in this context is the powerful popular wave that carried YS Rajasekhara Reddy to the Chief Minister's seat in Andhra Pradesh. Under the reprehensible moral burden being in power while more than 4000 distressed farmers across the state committed suicide, Chandrababu Naidu was trounced in the State Assembly elections, despite his close connections with big industry and the ubiquitous World Bank. YSR, as he is known, immediately waived all dues of farmers on account of electricity consumption, in an effort to contain the visceral impact of debt. While the effectiveness of this measure has been compromised by developments beyond the control of state politics, it is possible that the situation might have been worse in the absence of a course correction in the orientation of policy.

In some senses, the time is right for India Shining to partner with the India Poverty Alleviating, just as the private sector assumes the driving seat in a number of industries and helps deepen India's position as one of the fastest growing economies in the world. Increasingly, the state should continue to improve the lot of the 'other half', that second India that has been the neglected child of the motherland thus far. In fact as time goes by, this approach is less a policy choice and more a developmental compulsion.

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