Bringing months of negotiations to its logical conclusion, the India Today Group has announced a new licencing agreement with the Reader's Digest in India. This agreement replaces the one with Tata-owned RDI Print & Publishing Pvt Ltd, which published Reader's Digest in India since 1979 under a licence granted by the US parent, Reader's Digest Association Inc. With this acquisition, Living Media will have one more international title under its umbrella apart from Cosmopolitan and the recently acquired Golf Digest.
Elaborating on this arrangement, Aroon Purie, CEO, India Today Group, told agencyfaqs!, "The India Today Group sees a natural synergy with Reader's Digest in matters of distribution, marketing and ad sales. While we do not club group magazines for marketing purposes, we certainly hope Reader's Digest will benefit from the advertising inputs of the (India Today) group."
For the record, Reader's Digest has been printed at the Living Media-owned Thomson Press since its launch in India. "The synergy was always present on the manufacturing side. This new arrangement only enhances the relationship on the marketing front," said Poorie.
The issue that held up the India Today Group-reader's Digest licencing agreement for close to a year was the question of royalty. The US parent of Reader's Digest is believed to have demanded a royalty of 12 per cent of the annual turnover of the publication, while the Tatas reportedly paid a royalty of 5 per cent. Without disclosing the exact figures, Poorie said the India Today Group has agreed to pay an amount that is "substantially higher" than what the erstwhile owners of the monthly paid its US parent. The annual turnover of the magazine, which is currently published in English and has a circulation of 5 lakh copies, stands "upwards of Rs 20 crore", indicated Poorie.
Poorie made it clear the India Today Group will aggressively push to expand the Digest's existing franchise. "Reader's Digest has an universal appeal. Our intent is to make sure it makes a good read for all age groups." He added, "We will continue the Digest's editorial traditions and introduce it to a wider audience in India, including eventually expanding the franchise in additional Indian languages."
Currently, only about 10 per cent of the content in the Indian Reader's Digest is sourced from India. It would be interesting to see whether the editorial content of the largest circulated monthly in the world is altered by the new licencee. "We have inherited a profitable magazine which is widely read. So there are no real issues to fix, and nothing to revamp. Our focus will be to maintain the continuity of the magazine and further reinforce the good work it has done," Poorie summed up the task ahead for his group. © 2003 agencyfaqs!