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Mumbai's media Mahabharat

Shuchi Bansal & Palakunnathu G Mathai | April 06, 2005

The battle has been joined, the assault on Bennett, Coleman's citadel has begun. Last week, the Dainik Bhaskar group (which is partnering Zee) kicked off a Rs 60 crore (Rs 600 million) outdoor campaign ("Speak up, it's in your DNA") in Mumbai for its yet-to-be launched English daily, unusually called "DNA." It plastered Mumbai with 150 hoardings and 500 kiosks with advertisements, and mounted a campaign on FM radio stations too.

But the publishers of The Times of India, The Economic Times and other dailies and magazines had not exactly been sitting idle either. Bennett, Coleman was readying to launch a newspaper of its own called Bombay-Mirror on May 15 and quickly started hiring journalists from newspapers in the city.

This would have the added advantage of depriving newcomers to the Mumbai market of journalistic talent. Bennett, Coleman's Maharashtra Times also used a variant of the Dainik Bhaskar ad -- and Diligent Media Corporation, the 50:50 joint venture between the Zee group and the Dainik Bhaskar group hauled the company to the Mumbai high court accusing it of infringing its copyright and resorting to an unfair business practice.

Referring to the ads, the Dainik Bhaskar group's managing director, Sudhir Agarwal, 37, told Ice World: "Their impact can be measured by the way Bennett, Coleman reacted and copied our campaign for Maharashtra Times. The company must have panicked to have used advertising space worth Rs 90 lakh (Rs 9 million) in The Times of India. Bennett, Coleman officials were not available for comment.

Ad revenue from Mumbai's print media

Rs crore
Total revenues815
English568.50 (70%)
Vernacular246.50 (30%)
Newspapers717.20 (88%)
Magazines97.80 (12%)

Yet these are but the first salvos in what promises to be a long and bruising media war in Mumbai. In the next few months, more fireworks are to be expected as three new newspaper companies ready to enter the city. The Birla-owned The Hindustan Times is scheduled to launch a Mumbai edition in July.

Dainik Bhaskar and Zee are planning an August launch for their English daily. One other English newspaper could be waiting in the wings -- the Kolkata-based ABP group's The Telegraph. A top ABP source, however, said that a Mumbai edition was only one of several options and that the ABP board had not yet cleared it.

Newspapers that are planning to hit Mumbai have, meanwhile, been feverishly trying to get their teams in place. Two months ago, HT Media Limited, The Hindustan Times company, put together a top management team under Ranganathan Thota, a former GE, Whirlpool and Pepsi executive. The company has also acquired land for a printing press.

For the last one-month, the Agarwals who own Dainik Bhaskar have been meeting senior newspaper editors in Mumbai. Says Mid-Day Multimedia chief financial officer Manajit Ghosal: "In the short term, all hell will break loose. The fight for manpower has begun. Mumbai does not have so many journalists."

The Hindi press threat

This may not quite have dawned on India's English language newspaper barons, but the biggest challenge they face may come not from within their own English language newspaper fraternity but from aggressive Hindi newspaper groups. They are starting to foray beyond their traditional Hindi print businesses and into new media businesses.

A member of the Agarwal family, which runs the Rs 1,800 crore (Rs 18 billion) Dainik Bhaskar group (the group has a presence in the oil and cable TV industry too, and the newspaper business accounts for Rs 850 crore (Rs 8.5 billion) of group turnover), recently told a journalist that the group wanted to be right there at the pinnacle and for that to happen, it had to enter the English print media.

So if the group's new Mumbai newspaper takes off, it will quickly launch editions elsewhere (it has printing presses in several towns and cities) at little extra cost. The group also recently placed equity privately to raise between Rs 250 crore (Rs 2.5 billion) and Rs 300 crore (Rs 3 billion). The money is to be used for a diversification into television in Punjab and to launch more editions of the Hindi newspaper.

The group also harbours long-term ambitions of launching a financial daily and magazines in English.

The Rs 500 crore (Rs 5 billion) Kanpur-based Jagran Prakashan, which publishes Dainik Jagran, too is diversifying into several new areas. It has chalked out plans for forays into television. The group has already launched a Hindi news channel, Channel 7, at a cost of Rs 70 crore (Rs 700 million). Channels in other genres may follow.

The third generation of the Gupta family, which now steers the group is determined to turn the group into a media behemoth. Three new Jagran editions are to be launched in the next three months.

The group is also believed to be planning a foray into the Dainik Bhaskar group's home turf, Madhya Pradesh. Jagran Prakashan has already roped in a foreign partner for the newspaper business -- some months ago, The Irish Independent picked up a 26 per cent stake in Jagran Prakshan.

General English dailies in Mumbai
Rs crore
PublicationRevenue
The Times of India404.40
Mid-Day35.60
Indian Express25.40
Asian Age7.50
Afternoon Despatch & Courier2.80

The group was set up by Puran Chand Gupta and later headed by the late Narendra Mohan Gupta and his brothers and owns sugar mills, micro motors units, a premium socks factory and a condoms unit. A few years ago, it entered into a joint venture with the Vikram Kothari group to launch multiplexes in Kanpur. The Rave multiplex chain is now expanding into other Allahabad, Agra, Meerut and Noida.

These media barons are also different from their English language brethren. They're low key and dress in a most ordinary manner. They're also more focused -- and hungry for success.

But winning this war is a long-term affair (the Agarwals, for example, know that it will take four or five years for "DNA" to succeed). And newspaper companies have built hefty war chests.

Collectively, they will be putting up to Rs 1,000 crore (Rs 10 billion) into the war over the next five years in Mumbai. The Dainik Bhaskar-Zee combine, for example, expects to lose crores of rupees for years.

"Money is not a constraint. We are prepared to match The Times of India's spends," declares Sudhir Agarwal.

He says that the group's state-of-the-art printing press being put up in Vashi in Navi Mumbai "will be so advanced that The Times of India and others will take six months to catch up."

The Agarwals have privately argued that The Times of India caters to upscale, Page 3 readers and ignores the ordinary Indian in far-flung suburbs. So DNA will be positioned as a daily for the English reading masses, though it will have its version of Bombay Times.

The Dainik Bhaskar group, meantime, is using its time-tested strategy of resorting to consumer research on the kind of paper the city wants. Field workers have fanned out twice to 11 lakh (1.1 million) households and 200,000 traders in Mumbai to understand what they expect of a newspaper.

Bennett, Coleman, on the other hand, is busy preparing to launch its new newspaper. Media industry sources say that Bombay Mirror is to be positioned as a newspaper with an "attitude" and that it will have a 'broadloid' format -- that is, a broadsheet with tabloid content.

Bombay Mirror is expected to be a 24-page newspaper with regular pull-outs and an elaborate section for children. The Times of India too is aggressively preparing to expand its business coverage.

The Indian Express, meanwhile, is about to raise a war chest via an IPO. Unconfirmed reports suggest that Indian Express Newspapers (Bombay), will be raising Rs 250 crore (Rs 2.5 billion) in April, 2005.

The money is expected to be used to upgrade its printing press to print more colour pages and to get more staff. The Indian Express CEO and editor-in-chief Shekhar Gupta did not respond to a questionnaire or a request for an interview.

But Mid-Day's Ghosal says that to deal with the competition, The Indian Express (which has picked up a stake in Mid-Day) and Mid-Day are working on a joint circulation and advertising strategy for the two newspapers.

"It will be across products -- that is, The Indian Express, Loksatta and Mid-Day and our radio venture. The moment it is formalised we will announce it," he says. Just why are publishers launching new dailies in Mumbai? Some 700,000 copies of English newspapers are sold in Mumbai, less than half of Delhi's 15 lakh (1.5 million). "The potential is huge," says Girish Agarwal.

Many publishers argue that the circulation of The Times of India has not shot up significantly in the last four years (circulation in the city proper has grown, but has remained largely stagnant if the distant suburbs are included) and that a newspaper market expands whenever new entrants enter it, as happened in Delhi.

"Because of The Times of India's efforts to overtake The Hindustan Times in Delhi, the entire market grew between 1996 and 2004," says a media expert.

Secondly, Mumbai is the biggest ad market in the country (Delhi comes second). Estimates of the size of the Mumbai ad market for the print medium vary wildly but, according to Media Direction, the media buying wing of RK Swamy BBDO, English language publications account for about 70 per cent of the Rs 815 crore (Rs 8.15 billion) market -- and The Times of India bags almost half this sum (others think the figure is much higher).

Newspaper publishers also cite research reports that suggest that television advertising will plateau with the introduction of broadband and that advertising in the print media will go up. "People will be able to exclude ads when they watch TV," notes Sudhir Agarwal.

Figures for 2004 from Adex India, a division of TAM Media Research, back the point that advertising in the print media is on the upswing. Total television advertising grew by 13 per cent, from Rs 4,300 crore (Rs 43 billion) in 2003 to Rs 4,860 crore (Rs 48.6 billion) last year. But advertising in the print media jumped by about 14.6 per cent, from Rs 4,752 crore (Rs 47.52 billion) to Rs 5,450 crore (Rs 54.5 billion).

As the action in the Mumbai newspaper market heats up, some media planners privately say that advertising agencies will celebrate the entry of new English language newspapers because they will offer competition to The Times of India, which often raises its advertising rates.

Indeed, advertising professionals expect the new entrants to sell ad space at a discount. "The old players may not offer discounts but will enter into long-term deals with advertisers," says Ghosal.

The Times of India seems to have begun sewing up long-term deals two months ago. "It is offering three-year deals to some clients. The contract says that these clients will be offered attractive rates if they do not spend more than 10 per cent of their budget on other publications during the period of the deal," says a source at Optimum Media Solutions, the media buying arm of Mudra.

Still, not many in the newspaper industry expect the new entrants to the Mumbai market to succeed in the near future. Say Kasturi & Sons joint managing director N Murali: "Mumbai is going to be a tough market for anybody coming from outside. The Hindustan Times does not have salience beyond North India. It will have to build its brand equity here."

Some advertising men underline the Dainik Bhaskar group's earlier successes in markets like Rajasthan and Gujarat. But even Sudhir Agarwal notes: "We are not saying that we will beat The Times of India. All we want to create is a credible, workable newspaper. The Times of India is not our benchmark." Adds brother Girish: "The Mumbai market is not about who can launch. It is about who can sustain."

Clearly, there will be turmoil in Mumbai in the coming months. Price wars are a foregone conclusion. Newspaper companies will pour crores of rupees into marketing and commissions for distributors and hawkers.

And Ghosal and publishers themselves believe that the new entrants will have to rack up circulations of at least 200,000 in a year if they are to gain a foothold in Mumbai. The gainer will be the newspaper reading public -- it will have greater choice and perhaps lower newspaper bills -- and journalists.

But where are the people?

On just one day last week, senior journalists from The Hindustan Times were said to have interviewed journalists from The Times of India and other newspapers at a five-star hotel in Mumbai.

On the same day at The Times of India building, a senior editor interviewed journalists from a financial daily and from other newspapers. Also on that day, a representative of the Dainik Bhaskar group placed calls to several business and other journalists even as two separate television channels began interviewing people.

After more than three years of a job market drought, newspaper publishers and others are suddenly hotly pursuing Mumbai's print media men and women.

Three newspaper groups -- the Dainik Bhaskar group which will be launching a general English language daily called DNA, Bennett, Coleman & Co which will launch Bombay Mirror and The Hindustan Times which will launch an edition in the city -- are furiously shopping for editorial and marketing staff.

Exclaims a senior Bennett, Coleman & Co Ltd executive: "It's the dotcom days again. Journalists are flooded with job offers and salaries are shooting through the roof."

Bennett, Coleman itself is said to have offered double the salary some journalists at other newspaper groups earned while hiring them for The Times of India and to have poached from virtually every newspaper in town.

It has also been hiring for its new daily, Bombay Mirror -- the editor of the paper, Minal Bagel, has been brought in from Mid-Day. And email requesting correspondents, copy editors, graphics designers and photographers to post their resumes on The Times group's timesjobs website are doing the rounds.

Last week, Bennett, Coleman moved quickly to defend its flock -- it is believed to have offered senior journalists a unique instrument that is linked to the growth in the company's profit.

So why is poaching rampant in Mumbai's print media market? On an average, a general daily requires 100 to 150 journalists, according to two estimates. So three new newspapers require a minimum of 300 journalists.

Another 50 people are needed for the ad sales and marketing functions per newspaper. Obviously, these people can't be created overnight -- they have to be hired from other publications.

"We are also looking at hiring trainees and identifying good people in minor publications," says Dainik Bhaskar director Girish Agarwal. And though this could be a stray instance, others like Bennett, Coleman have been looking at Kolkata for journalists who'd be willing to work in Mumbai.


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