Battleground Mumbai: DNA, HT will find it tough to run through TOI’s armour

Mid Day, arguably, has drawn first blood in Battleground Mumbai; Bennett, Coleman & Co’s latest launch Mumbai Mirror being the first to experience how hard it is to get reader attention. But industry experts assure us that the Old Lady of Boribunder needn't lose much sleep over the impending invasion by Hindustan Times and DNA. Here's why.

Old habits die hard

For the 16.64 lakh (IRS 2005) readers of The Times of India, the old adage holds a special relevance. “It's very difficult for a newcomer to change reading habits. Mumbai Mirror wanted to take on Mid Day. It failed. Even Hindustan Times and DNA will find the going tough against The Times of India,” says Manojit Ghoshal, CFO, Mid Day Multimedia.

The newcomers are also likely to discover the pitfalls of the 'outsider' tag. Hiren Pandit, general manager, MindShare Mumbai, says, “HT carries the image of being a Delhi-based newspaper. That, unfortunately, won't go down smoothly with a section of Mumbaikars.”

Media observers remembered how another north India-based paper – The Pioneer – had launched its Mumbai edition in the mid-'90s, only to make a hasty exit.

DNA, being a new publication, has an advantage in this case since it doesn't have a pre-conceived image. Its billboard campaign has been a success. Unfortunately, the same cannot be said about HT’s advertising efforts.

Media observers say the launch timings of the challenger brands will also play an important role in deciding tomorrow’s winners. “HT could face a major problem, if it comes after DNA,” Pandit feels.

Now, that’s unlikely since as per the latest information, HT will launch its Mumbai edition on or before July 15. This is contrary to the general perception that HT will launch its edition in August-September in Mumbai. DNA is scheduled to hit the stands around July 21.

Therefore, if everything goes per schedule, HT will be firing the second salvo in Battleground Mumbai. Independent observers say that the delay in HT's entry is partly due to infrastructural problems. HT's Mahim office, until very recently, did not have proper furniture, lighting, wiring and networking. The first dry-run of HT Mumbai happened on Saturday.

It is a cliché but media planners/buyers are unanimous in their verdict that content is the king. MindShare's Pandit says, “At the end of the day, it will be the content of the incumbent and the challenger dailies that will influence the loyalty of the readers.”

Ravi Kiran, managing director, Starcom (India), west & south, says, “Some of the dissatisfied readers of TOI may immediately shift to an alternative newspaper – DNA or HT. But most will subscribe to the challenger brands as a second newspaper. Only in the second phase – which could be in the fourth month after the papers are launched – will the readers choose one among the three.”

Money matters

Prasun Kumar, media director, Madison, says, “Historically, TOI has been very strong in distribution and its control over vendors/hawkers is hard to beat.” TOI, he explains, sells at Rs 4 in Mumbai. Out of this, 40 per cent – or, around Rs 1.60 – goes to the hawkers. “Now, to keep the hawkers in good humour, both DNA and HT will have to shell out the same amount of money.”

“One possible way of doing it is by pricing the dailies at par with TOI. However, this will not be a favourable strategy for DNA and HT as readers will not be willing to spend more than Rs 2 for a second newspaper. The other possible way out is to monetarily compensate the hawkers, while keeping a low price tag. However, this will cut deep into the publishers' pockets,” Kumar adds.

This is probably why both HT and DNA have adopted a safer path of subscription. These dailies are wooing readers with attractive subscription offers in a bid to penetrate the Mumbai market. HT, as reported earlier, is available at 97 paise per copy for those who opt for a year’s subscription at Rs 348. DNA, meanwhile, will be available at Rs 2 for the first six months for subscribers.

Kumar of Madison says, “If TOI's strength lies in distribution, the Bhaskar Group – one of the joint venture partners of DNA – is known for its aggressive subscription drives. The publication has a history of successfully leveraging subscription drives in markets such as Gujarat, Rajasthan, and Chandigarh.”

But then, The Times of India group is no pushover in the subscription game. Back in the '90s, the group introduced the concept of ‘invitation pricing’. In recent times, the group has been behind combo offers, selling TOI with The Economic Times/Navbharat Times to push up subscriptions.

People factor

When TOI, HT and The Telegraph decided to protect their turf through a ‘no-poaching’ agreement, little did they realise that this will leave the field open to DNA to try and hire a few good men (and women). DNA’s list of senior journalists now reads like a veritable who’s who list – starting with Gautam Adhikari, formerly executive editor of The Times of India, as Chief Editor. Apart from Adhikari, DNA has R Jagannathan as business editor, Ayaz Memon as editorial head for city and sports news, and Khalid Mohammed as head of media and entertainment news. DNA has also roped in senior journalists such as Vinay Kamat (TOI), Sathya Saran (Femina), Roshni Jayakar (Business Today), Malvika Sanghvi (TOI) and Sherwin Crasto (Reuters).

HT Mumbai, in comparison, is devoid of ‘stars’ – except for resident editor Avirook Sen and national business editor R Srinivasan. The newspaper, which is keeping the cards close to its chest, will of course draw on its repository of scribes based in Delhi and elsewhere, and it’s apparent that senior journalists will be air-dropped to Mumbai well ahead of the D-day.

Battleground Mumbai has also seen journalists becoming much sought-after and high-priced commodities overnight. And, the trend is not limited to Mumbai alone. Even scribes from Delhi and Kolkata have received substantial salary hikes. “Journalists are now being given ‘corporate’ salaries. I know journalists whose salaries have increased by more than 100 per cent in a matter of months,” says a source associated with DNA.

Some media observers are weary about these hefty pay-cheques. “Will this boom sustain? What happens if DNA or HT fails to touch its projected circulation figures? Will journalists then be served with pink slips, or asked to take a pay-cut?” asks a senior journalist, who declined to be identified. The concern notwithstanding, no body is really complaining right now. Who would, when the bank balance looks so healthy?

Monopoly hurts

Few advertisers will admit this on record, but the truth is most of them are waiting for a good number two newspaper in Mumbai. As Pandit of MindShare Mumbai, says, “It's not about TOI per se, but the industry is looking forward for more options so that no single player dominates. This way, both the advertiser and the reader will be at an advantage.”

Kiran of Starcom offers another take on the issue. He says, “TOI may quote a high price for its advertising space but it also delivers results. So, I guess, regular advertisers with TOI will stick to the daily. This is not to say there won't be a churn. Even among the loyalists, there will be some advertisers trying out a DNA or HT. But this will happen regularly when the second newspaper starts delivering healthy numbers in the second phase.”

“In addition, there will be another section of advertisers who will choose the second paper because of their dissatisfaction with TOI, or because they cannot afford the paper's high advertising rates,” he adds.

Kumar of Madison, says, “It will be difficult for DNA and HT to affect TOI's business on their own. But together, they can certainly put a dent on TOI's dominance in the advertising market.”

It's apparent that the circulation of the challengers will be the most crucial aspect in this game of high stakes. As per ABC July-December 2004, total net paid sales of TOI's Mumbai edition is 6.03 lakh. “DNA and HT will have to notch up a combined circulation of around five lakhs to put up a serious challenge to TOI,” says Kumar of Madison.

Some media analysts feel that the combined circulation of HT-DNA may touch the four lakh-mark during the next 6-12 months. Is anyone willing to take a bet? © 2005 agencyfaqs!