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Home > News > Report

A small newspaper's amazing turnaround

Shuchi Bansal in New Delhi | December 11, 2006 18:42 IST

Its editor used a novel strategy to completely reinvent it, but what's ironic is that what began as a search for funds to expand may now result in a change in ownership.

Two months ago, the editor of Jharkhand's leading Hindi daily Prabhat Khabar approached the newspaper's owners, the Usha Martin group, with a proposal to start new editions in Chhattisgarh and to re-launch the paper in Patna. The reason was simple. Prabhat Khabar had been feeling the heat of competition from rivals such as Hindustan from HT Media Ltd and Dainik Jagran from Kanpur's Jagran Prakashan Group. Standing still was not an option.

The Jhawars who run Usha Martin responded that the newspaper company could sell equity to raise the money for expansion. Harivansh -- Prabhat Khabar's editor of 18 years -- was pleased with the reply.

Since 1996, the paper had been running on its own steam without financial support from Usha Martin, which is a wire rope and speciality steel manufacturer based in Kolkata. And the prospect of fresh cash infusion was heartening.

Usha Martin approached Edelweiss Capital. The non-binding bid exercise that followed has now raised the possibility of the Jhawars pulling out of the paper altogether. The daily, catering to the eastern market, has been valued at over Rs 100 crore and the Jhawars may find it hard to resist the temptation to encash. What began as a search for funds to expand may now result in a change of ownership.

Leading newspaper groups have already submitted their bids. In an e-mailed response to queries on the sale, Usha Martin's joint managing director Rajeev Jhawar said: "We have appointed Edelweiss as merchant bankers to help raise resources for expansion and growth of Prabhat Khabar by identifying financial and/or strategic investment partner and the process is under way."

With the media and entertainment sector in India heating up, buying and selling of media brands is hardly a surprise. What is not known widely, though, is the story of Prabhat Khabar's remarkable turnaround from being a sick newspaper with a print run of 600 copies to becoming the No. 1 Hindi daily of Jharkhand. Today, Prabhat Khabar  sells

2.28 lakh copies daily and has seven editions, in Ranchi, Jamshedpur, Dhanbad, Patna, Kolkata, Deoghar and Siliguri. Its advertising revenue has grown to nearly Rs 30 crore.

In essence, the paper's story is also that of one man's perserverence and determination to create "a movement, not a newspaper" (Harivansh's tagline is Akhbaar Nahi Andolan). Some two decades ago, a young Harivansh (he is 51 today) left Ravivar, ABP's Hindi weekly, and joined Prabhat Khabar in Ranchi as its editor. The Jhawars had just acquired the paper from Congress MP Gyaan Ranjan by paying off his loans worth Rs 2.5 crore.

Harivansh, a follower of Jayaprakash Narain, and trained under leading Hindi journalists like Dharamveer Bharati and S P Singh, soon took over the managerial responsibilities as well, though he had only a shoestring budget. All he had as assets were two decrepit composing machines, an ancient eight-page printing machine and 250 employees.

Harivansh's revival strategy centred on boosting employee morale and focusing on a unique editorial style. Putting systems in place was not easy, but he did -- and introduced contemporary newsroom and production technology. "Harivansh's turnaround strategy is a case study in itself.

He is an unusually bold editor who could manage crises and deliver results despite a severe funds crunch and manpower shortage," observes A S Raghunath, a print media consultant who has been advisor to Prabhat Khabar for the last couple of years.

Facing competition from entrenched newspapers like Aaj, Aawaz, Ranchi Express and Uditbaani which catered to popular taste and kept their cover price low, Harivansh devised a novel content strategy along with a strong social conscience. Readers' meets were organised in every mohalla where people voiced their views on what they liked and disliked in a newspaper. Journalists organised similar meets in village blocks as well. Clearly, Prabhat Khabar was an early adopter of the modern-day consumer contact programme.

The editorial focus shifted to socially relevant issues like corruption, law and order and development, or the lack of it. Local tribals were appointed and trained to do reporting. A strict code of conduct was designed for journalists. And the paper refused to carry either reports on, or advertising released by, chit funds and para-banking companies.

Over the years, the activist paper broke several important stories such as the Bhagalpur riots and blindings and the cattle fodder scam.  It also provided stimulus to the movement for a separate Jharkhand state.

To underscore Prabhat Khabar's position as a paper with a purpose, Harivansh roped in columnists like  Arun Shourie, Ishwari Prasad, Ram Dayal Munda and S P Singh.

Harivansh saw expansion as the only way to stay afloat. Though never flush with funds, the paper launched new editions. The strategy involved buying old printing machines and hiring a guest house in the city to put up the entire staff -- from the editor to the machine man.

It took some years for advertising to follow circulation growth, but finally it did after Jharkhand achieved statehood in 2000. However, competition also arrived that year. Hindustan from the Hindustan Times group was launched in Ranchi and it took away 33 of Prabhat Khabar's employees in one stroke. Two years later, Dainik Jagran entered the market and wooed the newspaper trade with expensive gifts. These rivals have deep pockets and have been closing in on the market leader. Harivansh decided that more money is required to take on the rivals. And that is what has led to the present situation.

Harivansh refuses to comment on recent events, but close associates says he'll see the paper through this phase before deciding on his future.

A movement, not a newspaper

The fate of Prabhat Khabar's new ownership will be decided in a few days. The big newspaper groups in the race -- Jagran Prakashan, Dainik Bhaskar, Bennett, Coleman & Co., Amar Ujala and ABP -- to buy Prabhat Khabar have apparently bid between Rs 50 crore and Rs 115 crore. Media industry sources say that the UP-based Amar Ujala, owned by Atul Maheshwari and Anil Agrawal, is among the highest bidders. Since the Jhawars of Usha Martin declined comment, the bid estimates are guesstimates and not precise numbers.

An executive of one of the bidders says that the paper should not be valued at more than Rs 55-60 crore because the latest readership surveys show the paper trailing behind Hindustan in Jharkhand. With a readership of 10.77 lakh, Hindustan has marched ahead of Prabhat Khabar's readership of 9.86 lakh. Dainik Jagran with a readership of 7.73 lakh is not far behind.

Others point out that Prabhat Khabar's circulation is still its strong point. Audit Bureau of Circulation (ABC) figures for January-June 2006 place Prabhat Khabar and Hindustan at 2.28 lakh and 1.69 lakh copies, respectively. The second attraction is that Jharkhand has become a growing market. "The East is suddenly fashionable as the states here are in revival mode," says Pramath Sinha, managing director of ABP. "Jharkhand is coming up well," agrees Sanjay Gupta, CEO of Jagran Prakashan. Advertising in the East (Jharkhand, Bihar, West Bengal, Chhattisgarh and Orissa) has been growing at nearly 19 per cent a year, compared to the national average of 15-16 per cent.

Raghunath says that Jharkhand is a lucrative market as it has at least three towns -- Ranchi, Dhanbad and Jamshedpur -- with a million plus population each. "Besides, Jamshedpur and Ranchi are undergoing a retail revolution with malls and multiplexes being opened, and retail brands such as Pizza Hut and Cafe Coffee Day opening shop."


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Number of User Comments: 1




Sub: prabhat khabar

I have had the opportunity to interact with Harivansh, the editor of Prabhat Khabar. He is truly a model of perseverance and the driving force ...


Posted by urvashi singh




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