afaqs!

Print's growing love for TV business

By Sumantha Rathore , afaqs!, New Delhi | In Media Publishing | December 01, 2010
Many print companies have already found their foothold in the television space, while many others are all set to try their hand at it. afaqs! finds out the factors that make the television business a sought-after medium for print publishers.

Four years ago, when the Malayala Manorama Group announced the launch of Manorama News, a TV channel, it set a string of print publishers thinking on the same lines in that state. Around half a dozen newspaper publishers in Kerala, including Mathrubhumi, Kerala Kaumudi, Madhyamam and Mangalam, are planning to set up television channels. Most of them are set to launch within the first six months of next year.

Kerala is not an exception. Ever since trailblazer Eenadu made its highly-successful and well-documented foray from print to TV, in 1995, there have been a host of such examples. Of the 27 channels with a print connection operating in India, seven have come up in the last two years.

In the pipeline are ventures such as the one from The Sentinel, an English daily in Assam. It has tied up with NDTV Worldwide to set up Sentinel News, a news channel. Malayala Manorama is ready to get into the general entertainment channel (GEC) space. Why are print companies looking at broadcasting so keenly? Do they prefer going solo or with tie-ups and joint ventures? How has it helped them? afaqs! finds out.

It's all in the family
Most newspaper businesses in the country are family-run. While a few of them opted to go to public in the last few years, they are still - primarily - family-run organisations.

Many of these family-run businesses started off as a single-edition newspaper in and around the independence era. Post-independence, these companies got busy expanding their reach with multiple editions in their predefined territories.

For a long time, these firms were content with the growth they had achieved or at the pace at which they were proceeding. However, things started changing when the second and third generations entered the business. Third-generation businessmen, armed with various degrees earned abroad, felt the urge to expand the business aggressively.

Hindi newspaper publishers who, till now, were guarding their traditional forts - Dainik Jagran in Uttar Pradesh, Rajasthan Patrika in Rajasthan or Punjab Kesari in Punjab - found greener pastures in other Hindi speaking states. But growth for regional language publishers was linguistically defined.

For these regional players, the way to grow was to diversify to newer platforms and cash in on the equity they had earned so far. Cable and satellite television (which had started opening up in early '90s) and the new, relaxed foreign direct investment (FDI) guidelines for news channels, provided an opportunity, many publishers were ready to grab. And did too. But it was left to a certain Ramoji Rao to show the way.

The First Mover
The Hyderabad-based Eenadu was one of the first regional, as well as print players, to have entered the television business. Twenty one years after it had launched a newspaper and rattled the existing dailies, the group went for its first channel, ETV Telugu, in August 1995.

I Venkat, director marketing, Eenadu, says, "There was a ready acceptance from the viewers because we retained the name even for the TV business." Eenadu's TV business grew and it moved beyond Andhra to launch 11 other channels - each catering to a particular state. The publishers in other states too jumped on to the wagon.

While Eenadu entered the TV business hoping to tap the market early, for the Anandabazar Patrika Group, the move was prodded following an invitation from the Star India. The invite came about when, after STAR-NDTV which had to be with an Indian identity, collaboration ended and STAR was contemplating starting Star News. The rules regarding foreign investment in news channels were changing constantly. FDI limits were reduced to 26 per cent for the foreign investor and out of the remaining 74 per cent, which had to be with an Indian entity, 51 per cent equity had to be with one party, and that made it difficult for individuals to enter the game. STAR was left with very little time to hunt for an Indian partner and at that time, it thought of ABP as they were the only media group that had the capability to invest and didn't have television presence.

Anandabazar Patrika's successful start with Star News led to the partnership moving into other areas and languages as well. Star Ananda in Bengali and Star Majha in Marathi followed.

One big reason why regional publications branched out was to leverage the equity they had earned in the market. Consider Lokmat, which has a 50:50 JV with IBN. "The presence of television enhances the brand value of the newspaper," opines Ashish Pherwani, associate director, media and entertainment, Ernst & Young. Bharat Kapadia, director, Lokmat Group says, "In print we are quite dominant in Maharashtra and we decided to leverage that in other media as well."

Tying up with an established partner is the easiest way to diversify. While many of these print companies had the expertise in news, they did not have experience in the TV business. Going solo would have been a risky affair as failure in TV could have affected the print business more than it would have in a JV.

"We opted for a JV because getting the infrastructure in place and learning the business would have taken a lot of time. IBN was ready and eager and the deal was stuck within a week. It has worked out quite well," says Kapadia.

The decisions were also backed by the belief that the presence in multi-media platforms helps connect better with both the people and the advertiser. Besides, they were afraid of missing out on a medium that was swifter than print. A daily after all comes in only once a day. Which is why a player like Bennett Coleman & Co too came up with ET Now, a business news channel, in 2009. ET Now followed the launch of Times Now, which was launched in 2006. With Zoom (launched in 2004) too in its kitty, the group, which reportedly closed 2009 with revenues of over Rs 5,000 crore, is in the midst of launching fourth channel (Movies Now).

Varghese Chandy, senior general manager, marketing operations, Malayala Manorama says, "You have to use whatever modes of communication there are. Appropriate platforms should be used to communicate and if, tomorrow, some other new media gets popular we might be there as well." He goes on to add that since Manorama News is an extension of the daily, Malayala Manorama, it had to land up on Day 1 with "a lot of credibility." There was, after all, a legacy of 120 years to protect.

Some new entrants in the media space decided to go whole hog with a presence across various media platforms. When Saakshi entered the Andhra Pradesh market, it launched a newspaper and a news channel almost simultaneously. KRP Reddy, director, marketing, Saakshi, reveals that though the decision to enter the television space was first on the agenda, unavoidable delays resulted in the print version coming first. The channel followed a year later (March 2009) in HD format. "When you have one medium in place, it always helps to enter another medium. We already had a strong network of news gathering in place. It enabled us to get news faster, especially the rural news coverage," he asserts. The Hindi space, however, hasn't seen as much action.

Local is easier
While Hindi newspaper publishers did get into the TV news space, only a few managed to achieve success. India Today, primarily a magazine publisher, has tasted success with Aaj Tak. But Jagran couldn't continue for long. Within a year of the launch of its Hindi news channel, Channel 7, it was sold to the Network18 Group and was later rechristened IBN7. Would Jagran have fared better if it had not had a different brand name for the channel? That is a difficult question to answer.

Pherwani says, "At times it's better to keep the two brands separate because if the new vertical (which has same name as the mother brand) fails, it may hurt the mother brand as well. It's safer keeping a different name altogether." But it is also true that a paper which is seen as the best publication in a region - will also enjoy the same perception initially, whenever it gets into other medium.

Language publishers had better luck because, "the regionalisation of media is an omnipresent truth of our industry," says Sandeep Lakhina, chief operating officer, Starcom Worldwide. "The proximity we have with the readers is far more than what a national player can offer. The audience can connect better with the issue we raise or publish. Readers can associate with a local medium better. For them, it's an Oriya channel - and that is not something which they cannot associate with," says Monica Nayyar-Patnaik, joint managing director, Eastern Media. The Bhubaneswar-based publisher of Sambad newspaper got into the television space with Kanak TV last year.

The rough and the smooth
The entry cost of setting up a TV news business is not very high. One could set up a region specific news channel with the upfront cost of Rs 30-40 crore. Also, there is the synergy factor. A newspaper is editorially well-equipped to run a news channel.

For Sambad, being in the business of news and with the reporting team in place, helped give the much-needed initial push. Says Nayyar-Patnaik, "The initial overlap of resources (manpower or infrastructure) gave us the confidence to kick-start the television business."

"Print publishers enter the television news space because they already have the infrastructure and resources in place. It's a collateral extension to other platforms. Today, every media house has to think media-neutral. Most importantly, news being their (print dailies) core area of expertise helps push the channel better," says Punitha Arumugam, group CEO, Madison Media.

So, what makes a news publication get into other genres than news space? Saam Marathi (a Sakal venture) is a GEC whereas, Zoom (The Times of India venture) is a Bollywood channel. But most of the channels launched today are news channels unlike 15 years ago when Eeenadu went ahead for a mix of news and entertainment possibly because the concept of news channels works much better now than earlier. "When we enetered the television space, the concept of separate news channels didn't exist. And we were clear to keep it as an infotainment channel. We have a dedicated news channel called ETV2 in Telugu. As we go forward we might launch news channels in others markets as and when the time is right," says Venkat of Eenadu.

Having a print and broadcast presence gives the brand more marketing clout and help get clients that it didn't have when it was a newspaper. FMCG brands prefer TV to print. That is one chunk, the new TV channels can look forward to. Moreover, regional print publications have a long list of retailers as advertisers. With a TV channel, they can tempt them to go in for a TV ad too.

Then there is the attractive revenue-garnering proposition. Anandabazar Patrika's revenues went up from around Rs 350 crore to Rs 800 crore in the seven years after it branched out to TV (Rs 200-220 crore came from the TV business).

It is certainly not a cakewalk. However, running a channel can prove quite difficult. A new channel has to spend a huge amount of money in carriage fees. Besides, many of the TV channels felt the need to have a separate reporting team for TV and print except for the occasional use of a common stringer team. So, the synergy may be elusive.

Newspaper brands can leverage their 'journalistic' heritage and some assets for television but ,"By and large, television is a different animal from print - and the entrants need to be cognizant of that," warns Lakhina. True, but as long as the temptation of growth is greater than the fear of failure, the crossover from one medium to the other will continue.

(With inputs from Anushree Bhattacharyya)

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