Indian Media Observer
An independent overview and commentary on the Indian media opportunity

Issue 1, dated May 1, 2004
The First Introductory Issue (the backgrounder):
This first issue of Indian Media Observer deals with the fundamental issues - an overview of the issues that international publishers will need to understand/address. More….
Indian Economy:
India is the world’s largest democracy and is the second biggest populated country (over 1 billion people). The country’s economic growth has been almost 5.5 % and it is now estimated to grow at rates upwards of 6 % per annum. For the quarter Oct-Dec, 2003, the Indian government reported almost 10.5 % growth in the country’s GDP, expecting that similar levels of growth will continue at least for the next two years. More….
Federal publishing policy:
Publishing was hitherto a protected sector. The country has now opened the doors for international publishing companies to come in with equity participation in varying degrees. More….
Publishing Overview:
The ‘news & views’ publishing sector in India can be broadly classified along general news dailies, business dailies, general news magazines, special interest magazines and B2B (trade) magazines. More….
International publishers in India:
Over the last few decades, when foreign equity was barred in Indian publishing, international publishers signed licensing and content syndication deals with Indian publishers. This is now changing fast, with some of the international publishers already signing deals for investment and equity participation. Major Indian publishers are restructuring themselves to accommodate international publishers, in accordance with the foreign equity laws. More….
Honey, it is the numbers game – the real business issues:
What is the average return on each page / rate per page of advertisement that an international publisher can expect in India? What are the benchmarks? What could be the subscription rates? What are the distribution channels? Can the Indian postal services be relied upon? How does one work out the realistic cost of operations? How accurate can be the business plans and financial projections? There are more questions than answers around. More….
About the newsletter Indian Media Observer and Chronosphere:
Indian Media Observer, this newsletter is essentially to highlight several developments in Indian publishing sector and with independent comments on such developments, for the benefit of international publishers, who would like to explore the great Indian opportunity. More….


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The First Introductory Issue (the backgrounder):

This first issue of Indian Media Observer deals with the fundamental issues - an overview of the issues that international publishers will need to understand/address.

We hope you save this first issue for a longer duration, because it will assist you in assessing your own interests vis-à-vis the local market potential as well as specific developments that will be highlighted in the forthcoming issues of the newsletter.

From the second issue, Chronosphere’s Indian Media Observer will go into specifics, for international publishers to keep track on the Indian markets.

As mentioned separately, the news and comments will be crisp, all the time, to ensure that you do not have to spend more than 10 minutes every month to keep tabs on the Indian markets

Indian Economy:

India is the world’s largest democracy and is the second biggest populated country (over 1 billion people). The country’s economic growth has been almost 5.5 % and it is now estimated to grow at rates upwards of 6 % per annum. For the quarter Oct-Dec, 2003, the Indian government reported almost 10.5 % growth in the country’s GDP, expecting that similar levels of growth will continue at least for the next two years.

India is pretty diversified with several religions, languages and cultures. Though the official language of the federal government is Hindi, the language of business happens to be English. Lack of knowledge of Hindi or any other Indian language is not an obstacle in doing business in India.

The country has a well-established communication system, along with strong fundamentals in education. The liberalization process started in 1991 is now impacting all the sections of the nation’s economy.

More than 200,000 service jobs from around the world have already moved to India. This offshore outsourcing process is likely to escalate creating almost 2 million new jobs in India in the next 7 years.

In other words, if China is slated to become the manufacturing hub of the world, India is poised to become the service centre of the world.

This will ensure increased and more demanding publishing opportunities in India.
Federal publishing policy:

Publishing was hitherto a protected sector. The country has now opened the doors for international publishing companies to come in with equity participation in varying degrees.

The recently announced policy allows foreign equity upto 74 per cent in non-news-based publishing companies in the country. On the news side, it is limited to 24 per cent.

Local established publishing companies are restructuring their respective businesses to accommodate foreign equity investment accordingly.

However, there is no clear policy defined for investment in directory and custom publishing agencies in India. Directory publishing companies can safely be 100 per cent owned by foreign companies. In case of custom publishing, since the titles are / would be owned by Indian companies, these companies technically would not be subjected to foreign investment limitations.
Publishing Overview:

The ‘news & views’ publishing sector in India can be broadly classified along general news dailies, business dailies, general news magazines, special interest magazines and B2B (trade) magazines.

The market of general news dailies is dominated by publishing groups like Times of India, Hindustan Times, The Hindu and Anand Bazar Patrika in the country’s four regions of west, north, south and east. The Times of India and Hindustan Times are engaged in a fierce fight to win the market leader position in the north.

The India Today group enjoys almost monopolistic position in the general English news magazine category, with ‘The Week’ from the south-based Malayala Manorama group coming a distant second. Except for The Week, the rest all are based in New Delhi – the political capital of the country.

In the non-English ‘news & views’ publications’ category, there are several publications in Hindi, Malayalam, Tamil, Bengali and Gujarati. However, these are broadly confined to the different regions.

With a reported 41 per cent of Indian government’s tax accruals coming from the country’s commercial capital Mumbai (Bombay), the major B2B publishing companies understandably are based in Mumbai.

B2B publishing in India is largely unorganised with the major industry and trade publications being published by small publishers. The major national publishing companies have forayed into B2B publishing. However, the smaller and independent publishers still call the shots in their respective niches.

In B2B category, the notable publishers serving the computer and software section are Cyber Media in the north and Jasubhai Media in the west. Times of India withdrew from this segment after a failure, while Indian Express group has met with modest success with its weekly title Express Computer.

Apart from being unorganised, another peculiarity is that the B2B category has virtually no non-English publications. Almost all of B2B publishing happens in English. India has a huge non-English speaking trading community. However, there is no major magazine serving their needs.

Moreover, a majority of the B2B publications severely lack quality of content and production.

Other categories like special interest, sports, leisure and lifestyle have still not taken off on a large scale. There are a handful of successful publications in segments like women, cricket, lifestyle & fashion and children.
International publishers in India:

Over the last few decades, when foreign equity was barred in Indian publishing, international publishers signed licensing and content syndication deals with Indian publishers. This is now changing fast, with some of the international publishers already signing deals for investment and equity participation. Major Indian publishers are restructuring themselves to accommodate international publishers, in accordance with the foreign equity laws.

Already, news of Financial Times taking up equity in the country’s second largest business and financial daily - Business Standard - publishing company have been reported.

BBC Magazines has also entered into an MOU with the Times of India group for a separate magazine publishing entity.

Several international publishers are talking to equal number of Indian publishing companies for such long-term marriages.

One existing route that is being explored aggressively now is licensing of publications. However, a few licensing relationships have gone sour – the most notable being Frugal’s licensing of its computer magazine “CHIP” in the Indian markets. While CHIP was off the shelves, the earlier publishing partner launched another magazine to fill in the void created by CHIP’s absence. The re-launch of CHIP with another publishing partner happened with expected setbacks in circulation and advertising revenues.

New Delhi’s India Today group is aggressively pursuing licensing relationships, having introduced Cosmopolitan magazine, amongst others, in the country. Magazines like L’Officiel and Elle are also being published in India through the licensing route.

Though significant opportunities exist in the different categories of publishing in India, international publishers will be better off with their own / independent research and understanding of the Indian marketplace.
Honey, it is the numbers game – the real business issues:

What is the average return on each page / rate per page of advertisement that an international publisher can expect in India? What are the benchmarks? What could be the subscription rates? What are the distribution channels? Can the Indian postal services be relied upon? How does one work out the realistic cost of operations? How accurate can be the business plans and financial projections? There are more questions than answers around.

For a country as diverse as India, there are more questions on one’s table than answers.

Hypothetically speaking, a high-profile magazine with a circulation of 10,000 can command an advertisement rate of Rs 80,000 (USD 1818, GBP 1,040) for a full-page colour advt, whereas a low-profile magazine with a similar print-run will have difficulties in getting an advt rate of Rs 20,000 (USD 455, GBP 260).

It will be rather upto the international publisher to realise whether such rates are acceptable and whether such revenues would add to their global revenues significantly. The same goes with other revenues from subscriptions and other revenue streams like exhibitions and conferences.

In terms of certification, except for the major publications, most are not audited. The Audit Bureau of Circulation (ABC) in India audits only paid distribution. There is no auditing body for publications depending on non-paid copies.

The major marketing tool that dailies have used is an “introductory price of Re 1” for a daily of 24 pages. This price works out to USD 0.02 and GBP 0.01 per copy. Once established, most of the dailies charge USD 0.04 or GBP 0.02 per copy.

For magazines, the marketing tool has largely been direct mail campaigns.

However, the above will need to be related to the Indian cost of operations, which are quite low – the major cost centre being printing and paper. With the cost of paper in the international markets and within India at par, the major differences will emanate from cost centres like manpower and marketing.

In this context, it is of critical importance to international publishers while working out their business plans and financial projections, and explore whether the figures would be of significant interest to them. (Chronosphere does provide services of doing market research, test marketing and working out the business plans as well as projections.)

On distribution, the country has a widespread network of independent agents, apart from very low-cost city-specific couriers. Though there are several complaints against the government-owned postal services, there are ways of managing this system to your satisfaction.
About the newsletter Indian Media Observer and Chronosphere:

The Indian publishing market is buoyant currently owing two factors - Indian government liberalising laws pertaining to foreign investment in Indian publishing companies as well as the Indian economy’s growth that is resulting in a fast-growing English-educated middle-class with increased disposable incomes.

However, the sub-continent with multiple languages, religions and varied culture offers a challenge to international publishers.

Indian Media Observer, this newsletter is essentially to highlight several developments in Indian publishing sector and with independent comments on such developments, for the benefit of international publishers, who would like to explore the great Indian opportunity.

The news and comments will be crisp, all the time, to ensure that you do not have to spend more than 10 minutes every month to keep tabs on the Indian markets. Chronosphere, with no direct interest in the mainline publishing business, seeks to offer unbiased and independent reporting on the Indian media opportunity through this newsletter.

Chronosphere is a comprehensive media services and consulting company, focussing on publishing consultancy and customer magazines in the Indian markets as well as offshore outsourcing from international publishers.
The newsletter - Indian Media Observer - is produced by Chronosphere’s CEO Bhupesh Trivedi personally. Chronosphere is based at B205, Nirman Palace, Pump House, Andheri (East), Mumbai – 400093, INDIA.