The third session of the day highlighted the mixed record that cross media ownership has had in India, and what has worked and what can work in the future from an investor's perspective.
The third panel discussion at The Future of News 2011, a seminar organised by afaqs! in New Delhi on August 4, raised the topic of cross media ownership in India and what needs to be done to protect and fuel its future growth.
Khandekar started the session by saying that if we look at the media companies today, most of them started with print and as new media started opening up, they gradually moved to other verticals such as television, radio and internet.
"India is a very interesting country, where even radio is in some ways a new medium because it is still expanding across the country," he said. Khandekar added that media companies were tempted to try their hands at new media (in the news domain).
"The temptation was obvious - the promise of synergy, which has been something elusive to grasp, not just in the media, but across industry. We'll look at how media companies are expanding beyond their original media and what their experience has been," he said.
Chandy said that the writing on the wall was very obvious and the obituary of print was written long back. Citing the example of Malayala Manorama, he said that it took 100 years for the group to achieve 1million copies, and the next one million happened in the last five years, when the competition was intense and the advertising growth was very high. "The point I'm trying to make is that we are in an industry which is still maturing," he said.
Chandy said that he has been a part of the print evolution, as well as other media that came up later. He said that Malayala Manorama decided to lap up other forms of media to engage the customer at every point of time.
"In a state like Kerala," he said, "we were able to reach out to 65-70 per cent of the population through the print medium alone. What other media had to offer us was minimal. So, why did we enter into other domains? Well, the concept of fragmentation of the audience has been doing the rounds for quite some time and it was about engaging the customer at every point of time. This was the reason why we entered into various domains (newspapers, magazines, radio, TV and online)."
According to Chandy, as far as advertisers are concerned, in this era of "verticalisation", it is vital to sell a proposition which is a solution to the entire problem, rather than selling each and every offering separately.
Venkat said that Eenadu was the first print publication to enter into the GEC (general entertainment channel) space in 1995, and it was only seven to eight years later that other publications such as Business Standard and Hindustan Times got into television, only to shut down due to various reasons.
After that, many other publications such as Manorama, The Times of India, Jagran Prakashan, Lokmat and Sakal got into the television business. He said that getting into the TV space was a natural extension.
Venkat added that though almost all media companies are getting into other verticals, the fact remains that it is not easy to sell combinations. "A traditional print media company now holds various verticals in the media space and initially, when we went to sell each vertical, we found that most advertisers were keen on combination pricing. However, when we actually went ahead with the plan, we realised that the combination pricing did not materialise as the asking rate by the advertisers was way lower than what we could have offered."
Comparing the media situations prevailing then (1995) and now, Venkat said that at that time, television was a new domain and they enjoyed certain advantages. However, that is not the case today. Ground distribution was easy to get into (not anymore) and the rules of the game have changed completely. He added that on one hand, media companies are getting into several verticals, buying agencies, and having separate divisions for print, television and other media. "They don't look at combination. So, how relevant cross media is in today's environment is questionable," he stated.
Speaking about the dangers looming large in front of the media houses entering into cross media ownership, Venkat cautioned that when a media house goes beyond the realms of news gathering and enters into malpractices, it becomes dangerous for the company. Also, unlike other countries, India still does not have a law or a policy governing cross media holding patterns.
Thappa of Mail Today, reflected upon his personal views (a consumer's view) on the subject, and asked the audience to imagine a situation 25 years back. The matrix of content revolved around the kind of content, when one wanted it, and on what context one wanted it. That matrix has expanded, not only in terms of dimension, but cells as well. Therefore, cross media holding is inevitable because the consumers demand content at varied places and at varied times. The context has changed, and that is where people are finding business models.
"Cross media holdings will not only give people the formula of selling their business successfully, it will, at the same time, dilute their risks by being in multiple verticals. However, in India, cross media holding will take some time before it can command that power," he said.
Khandekar asked Sen if, as a planner and buyer, he found cross media compelling, or did he often disregard bundling? Sen replied that from an agency point of view, the concept of cross media ownership is not very interesting because of two reasons. One being that the competency of each vertical is not parallel, that is, someone who has excelled in print might not be that good with the television business. They might not have similar scalable skills in other verticals. Secondly, as the clutter increases, one will have to move to idea-based communication from the present mass-based communication, with the concept of media-neutral paid and earned media picking up.
"We as of now don't have a metric that is active on brand experience. We are dependent on traditional metrics. Therefore, according to me, there is an end-to-end problem till the time we acknowledge that we are in the business of ideas and therefore, I need a media house to partner. And, the cost of media is still relatively cheaper in this market. If I can get my creative execution implemented at a relatively cheaper cost, why am I going to push myself? So, as the media becomes more expensive and I have to make strategic choices of A versus B because I cannot afford A, that is when I will start looking at relative scale and competency of the media organisation," he stated.
On whether media houses can effectively leverage the competencies of their resources across verticals, Chandy said that leveraging the competencies of content across various media platforms is the easiest part, though there are certain sections like investigative reports which can't be integrated across platforms.
"The greatest challenge today is the people who do not understand what integration is all about. It is not about vanilla advertising being divided into various verticals, but about looking at a problem and offering a complete solution," Chandy concluded.
The event was sponsored by STAR News and IBN Live.