Friday, 5 October 2012

Media moguls: Inside the minds of Samir and Vineet Jain

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
by R Jagannathan Oct 4, 2012

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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