Senior journalist friend Shekhar Seshan tells me:
As Taher Shaikh,
once a senior colleague in what was Poona Herald, said: "hum log itna saal
samajhta tha ki hamara baap ka paper hai. ab maloom pada, advertising wale ka
baap ka paper hai!"
And the beginning of the trend was reported to us in 1989 by a friend who was in ToI Delhi, who quoted Samir Jjain saying more or less the same thing.
Read on:
Media
moguls: Inside the minds of Samir and Vineet Jain
(Sourced from: http://www.firstpost.com/india/media-moguls-inside-the-minds-of-samir-and-vineet-jain-479062.html
It is impossible to talk about Indian publishing without discussing Samir Jain, whose invisible hand guided The Times of India group to become India’s – and probably the world’s – most profitable media company. Despite its relatively small size in the global league (Rupert Murdoch’s NewsCorp is 20 times bigger in terms of revenues), Jain’s Bennett, Coleman & Co Ltd (BCCL) packs a huge punch and is Indian publishing’s Godzilla.
Nobody in the Indian media loves Samir Jain’s business
philosophy that treats journalism merely as a necessary nuisance and celebrates
the advertiser as the real customer, but over the last quarter century it is
Samir Jain, 58 (“VC” to insiders) – and his younger brother Vineet Jain, 46,
the managing director of BCCL – who have set the agenda for change and
rejuvenation of print publishing. What Samir Jain thinks today, the rest of the
Indian media willy-nilly thinks tomorrow or even the day after – and curses him
for it.
Insights into Samir Jain’s
thinking have been few and far between in the Indian media, for he tends to be
a media recluse, but The
New Yorker – which, too, failed to meet him – manages to bring
his ideas into broad daylight by talking to his brother and senior BCCL
executives, not to mention loads of envious rival media moguls.
Ken Auletta’s article,
titled Citizens Jain, is
ostensibly about India’s “thriving” newspaper industry, but it is essentially
about how the Jains made it all happen for themselves.
The takeouts from the article
are not entirely new for India’s print journalists who have had the good
fortune to work for the generous Times
of India group (or the misfortune of believing they really
mattered in Jain’s scheme of things), but no one has yet managed to bring their
worldview into such sharp focus and so successfully.
So what do we learn about the
Jains from The New Yorker (read the full article here, but you need to be a paying customer
for this) and about their business instincts and values?
First, as we all know, they don’t see themselves as being in the news
business. Vineet Jain tells the magazine he is in the advertising business: “We
are not in the newspaper business. If 90 percent of your revenues come from
advertising, you are in the advertising business.”
Bhaskar Das, a BCCL board
member and long-term Jain loyalist, elaborates on how Samir changed the
way TOImanagers thought
about their business: “His mind was very clear on what business we were in. We
knew we were in the business of aggregating a quality audience. Before that, we
just sold advertising space.”
In this scheme of things, the
advertiser is the king, and TOI believes
its mission is to promote the advertiser’s interests by facilitating “consumption.”
Journalism is just the facilitator in this business. To ensure this, the
newspaper tries to maintain a robust degree of optimism even in the news space
– despite murders and rapes and accidents and tsunamis – and prefers to talk to
the aspirational young. Poverty stories are given a low billing.
Second, the
article tells us how Samir Jain has no qualms about paid news, or entering into
private treaties with advertisers – an unstated reason being favourable
write-ups.
Apparently, the Jains got the idea when Richard Branson of
Virgin Group once claimed in an interview that he did all kinds of stunts –
like parachuting from airplanes – since it saved his company millions of pounds
in advertising his brand.
That’s when, says Vineet Jain,
the penny dropped. Samir and he concluded that some companies don’t advertise
in newspapers when free PR did the work for them anyway. That’s why the TOI group
seldom uses brand names in the newspaper, and seeks to get paid for it instead.
Vineet’s logic: “They are promoting a brand. Pay me for it.”
Third, even
though it is the done thing to apportion all credit for BCCL’s success to Samir
Jain’s strategic thinking, it seems the brothers have a complementarity that
works quite well, thank you. Vineet Jain notes, “I think of one hundred small
ideas, he (Samir) thinks of three big ideas.” Clearly, one person does the
big-ticket thinking, and the other works out the pathway to implementation and
learns from the experience.
The Jain brothers are also a
study in contrasts. Samir is spiritually inclined and spends months in Haridwar
with his guru, meditating, chanting, et
al. One of his executives says Samir won’t implement anything his
guru disapproves of. Vineet, for his part, keeps his distance from gurus, since
he can’t listen to three-hour “discussions every day.”
Samir is into work-life balance, for Vineet, work is a vacation.
If Samir is a bit of a recluse, Vineet is a ladies’ man. Two
reasons are given for Samir’s reclusiveness: Vineet says it’s because his
brother does not “want fame”, but BCCL CEO Ravi Dhariwal puts a more earthy
reason for it: Samir does not want to discuss his business secrets with anyone.
Why give away your competitive advantage?
Fourth, where
did Samir Jain get his idea of “invitation pricing” – where he cut the prices
of his newspapers on one day in the week to Re 1 to gain readership? Apparently
from the Kolkata Zoo, where Jain found that on the day the admission rates were
lower, crowds soared.
This is what led his wounded
competitors – from the Hindustan
Times in Delhi to The
Hinduin Chennai – to accuse Samir Jain of “predatory pricing”. But
brother Vineet gives the standard answer to this charge: “By lowering the price
I am expanding the number of readers.”
What he did not mention was that cutting prices is a nice way to
drive competitors out of business or into suicidal me-too reductions. Also,
price-cutting works best for people with deep pockets. In India, no pocket
comes deeper than Samir Jain’s.
Fifth, the
Jains don’t play softball. Executives are quoted as saying that advertisers are
given a simple message: advertise with us, or you don’t get to showcase your
wares in The Times of India. Then
there are marketshare clauses which prevent advertisers from advertising with
rivals – like the Hindustan
Times or, more recently, DNA in Mumbai.
So when The New Yorker says
it is writing about a “thriving” Indian newspaper industry, the truth could be
a little different: The Jains are thriving at the cost of their direct rivals.
Sixth, one
cannot avoid mention of the love-hate relationship between Samir Jain and his
journalists. No editor or journo who’s listened to him ever comes out
unimpressed by his extraordinary intelligence and unorthodox thinking (Vineet
says both brothers think “out of the box”), but underlying it all is also a
realisation that the Jains believe in cutting journalists down to size.
This attitude is prevalent with
his executives. Thus we have Rahul Kansal, Executive President of BCCL,
telling The New Yorker that
“Editors tend to be pompous fellows thundering from the pulpit, speaking in
80-word sentences.”
Kansal obviously takes the prejudices of his boss seriously.
Sure, many newspaper editors are pompous, but there is no universality about
the rule.
Vineet Jain himself, while not being so overtly dismissive, is
clear that to succeed in the newspaper business, you must not think like
editors: “If you are editorially minded, you will make all the wrong
decisions.”
You may or may not agree with Citizens Jain on their approach to
business, but there’s no arguing with success.
The New Yorker’s take
on Citizens Jain makes for a great read
----
New Yorker discovers India’s
paid media, but misses the point
“While profits have been declining at newspapers in the West,
India is one of the few places on earth where newspapers still thrive; in fact,
circulation and advertising are rising. In part, this is because many Indian
newspapers, following an approach pioneered by the Jain brothers, have been
dismantling the wall between the newsroom and the sales department. At
The Times of India, for example, celebrities and advertisers pay the paper
to have its reporters write advertorials about their brands in its supplementary
sections; the newspaper enters into private-treaty agreements with some
advertisers, accepting equity in the advertisers’ firms as partial payment.
These innovations have boosted the paper’s profits, and are slowly permeating
the Indian newspaper industry,” says The New Yorker.
The
article quotes one (or both?) of the brothers who run Bennett, Coleman and
Company Ltd, (BCCL) as saying, “We are not in the newspaper business, we are in
the advertising business.” Even more famously, Vineet Jain, the group’s
Managing Director, says, “If you are editorially minded, you will make all the
wrong decisions.”
In the article, for the first time, there is a tacit admission
that BCCL’s pay-for-play revenue source, Medianet, was launched because the
publisher learnt that journalists were being bribed for positive coverage – and
decided to sort of legalise the practice. “(Vineet) Jain “contends that it is
more honest than what existed before, when reporters were slipped envelopes
with cash or accepted favors in exchange for positive coverage. “They are
promoting a brand,” Jain tells Auletta (the writer of the piece). “Pay me for
it.”
BCCL and The
Times of India are
hardly the only ones in the pay-for-play game. “Krishna Prasad, the
editor-in-chief of Outlook magazine and founder of Sans Serif, a
media blog, tells Auletta. “Each player in the Indian market, whatever the
language, is left with very few options. And newspapers who say they are not
doing it are basically lying. The toothpaste is out of the tube, and it can’t
be put back in,” The New Yorker says.
Overall, the article sends out a mixed picture of the Indian
newspaper industry – one where pay-for-play thrives, where the business is
thriving and profitable.
The article, however, gets it
wrong on the growing circulation (yesterday, IRS 2012 Q2showed the top 10 newspapers cumulatively
losing readers, with seven of them, includingThe
Times of India, among the losers.
The New Yorker also was off the mark on the advertising
growth front, making the now normal mistake foreign publications make of using
rate card data rather than negotiated rates in their assessment. Deep discounts
are common in newspapers, and, while the entire newspaper business might have
grown thanks to new editions and titles, low cover prices make the business a low-margin one.
The goings-on at Deccan Chronicle demonstrate the state of the
industry. “But the year 2010 brought with it the perfect storm for Deccan
Chronicle’s business. First, the cost of printing a newspaper shot up due to
increasing newsprint prices and a depreciating rupee. Second, the prolonged
economic slowdown and uncertainty since 2010 caused most advertisers to tighten
their purse strings.”
So what’s there in The
New Yorker article? They get it wrong on the growth
in circulation, they get it wrong on the robustness of the advertising and they
talk about old hat, pay-for-play, in The Times of India.
That’s a big let-down, considering that the sub-head of the
article says, “Why India’s newspaper industry is thriving.”
It’s not, it’s not.
(Disclosure: Firstpost is
published by Network18, which has TV and other publications that compete with The
Times of India group).
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