OPPORTUNITIES in MediaPublishingMagazines in India, the Emerging Opportunity

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OPPORTUNITIES in Media/Publishing/Magazines in
India, the Emerging Opportunity

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The Indian Snapshot

• Second most populous country in the world with
  over 1 Billion people
• Worlds largest democracy
• Geographical area 3 Billion Sq. Km.
• GDP of 600 Billion, per capita income 600 per
  annum
• 18 official languages with different scripts
• The youngest nation, 2/3rd of the population is
  under 30

Imagine, if Europe was one country
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A Land of Contradictions

• Lots of lines divide the society race,
  religion, region, languages, castes etc, yet
  there is Unity in Diversity
• 1/3rd of the worlds software engineers and 1/4th
  of the worlds undernourished
• 50 Million Indians would compare well with the
  developed nations, 300 Million middle class is
  aspiring for a better life, 1/3rd are illiterate,
  and 1/4th are below poverty line
• A functioning anarchy J K Galbraith. But it
  remains united unlike break-ups in Europe,
  Africa, Russia, etc
• Amazing progress vs. extreme poverty

General thing about India is that you cant
Generalise
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Emergence of a New India

• Amongst the wealthiest country pre-colonial times
• Amongst the poorest at the time of independence
  in 1947
• Till the 70s, economy grew at 3.5, In the 80s -
  4.5, in the 90s 5.5
• Currently growing at 6 to 8
• As per Goldman Sachs BRIC (Brazil, Russia, India,
  China) will become bigger than G6 countries by
  2050. Amongst these the fastest growth rate is
  predicted for India
• Foreign exchange reserves at 110 Billion
• Rapid infrastructure creation and consumerism

A market no one can afford to ignore
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Current Publishing Scenario Registrar of
Newspapers for India

• 55,780 newspapers and periodicals registered
  (31.3.2003)
• Around 7,156 submit annual returns with
  circulation 142 Million
• Newspapers and Periodicals each have circulation
  of 70m
• Languages
• Registered in 101 languages
• Mostly Hindi and English
• Details from http//rni.nic.in/

Publishing is an old tradition in India
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Current Publishing ScenarioRegistrar of
Newspapers for India

• Single edition circulations
• Hindu 937K
• Hindustan Times 909K
• Anand Bazar Patrika 877K
• Times of India 844K
• (Three of these are in English)
• 60 publications have a circulation over 100K
• 1Hindi magazine Saras Salil 1,049K
• 1 English magazine India Today 453K

• Multiple edition circulation
• Times of India 2,152K
• Malyalam Manorama 1,273K
• Dainik Jagaran 1,273K
• (Only one of them is in English)

Large circulations
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Current Publishing Scenario

• The Indian Newspaper Society has 705 registered
  papers with a circulation of 47 Million
• The Association of Indian Magazines has 85
  magazines with a circulation of 8 Million

A small fraternity
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Readership vs. Circulation

• 251 magazines and 147 publications are registered
  with ABC
• Each copy gets read by multiple readers and
  therefore readership is more important than
  circulation
• The Indian Readership Survey (IRS 2003) covered
  291 publications with a total readership of 354
  Million
• English 63 23 dailies 22M, 40 magazines 30M
• Hindi 55 30 dailies 73M, 25 magazines 39M
• Languages 173 with 190 M readers
• Removing overlaps, the print media reaches 176
  Million Indians, newspapers reach 153 Million and
  magazines 84 Million

Yet, print does not touch 80 of Indians
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Ad Spend
All figures in Rs. Billions
Ad Revival, Print/ TV balance being reached
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Major Players

• Newspapers
• Times of india
• Hindustan Times
• The Hindu
• Indian Express
• Malyalam Manorama
• ABP
• 80 of the market is controlled by these 12
  publishers

• Publications
• Living Media
• Delhi Press
• Cyber Media
• Outlook
• Business India group
• Magna Publishing

A small fraternity
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B2B Publications

• Cyber Media was a pioneer launching the first B2B
  publication - Dataquest in 1982
• There are approximately 4000 publications
  registered with RNI under this category
• Since only about 1.5 - 2 of the registered
  magazine are significant, we estimate that that
  there would be about 60 to 100 significant B2B
  publications
• CyberMedia is the biggest B2B publisher in India

B2B in its infancy
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Readership of magazines by type
SourceNRS02
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Print Ad share by language
SourceNRS04
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The Contradictions

• Mature YET Few international brands from India
• Large numbers YET Penetration is low
• Large number of magazines YET Small number of big
  players

A market no one can afford to ignore
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The Policy Historical

• In 1955, the Cabinet of Ministers passed a
  resolution barring foreign media ownership
• It was not a law, it was a guideline, Readers
  Digest was the only exception since it had been
  approved pre-1955
• Despite the liberalisation in the 90s, media
  ownership remained a politically sensitive issue
  opposed by major media groups
• The policy was opened up in 2002

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The Policy News and Current Affairs

• Ownership maximum FDI 26, largest Indian
  shareholder must be 51
• At least 50 of the FDI has to be inducted as
  fresh equity, the balance can be through sale of
  existing shares
• Board must be 3/4th Indian
• All key executives and editorial staff must be
  resident Indians
• Clarity on brand name is not there

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The Policy Specialty Publications

• Ownership 74
• Brand name allowed
• Management control can be foreign

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The Policy Syndication

• Content must be within 7.5 of the total printed
  area
• The editorial page or the front page cannot be
  included
• Mast head of the content provider cannot be used
  in the Indian publication, byline is allowed

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Since Then

• Already approved
• Golf Digest
• Cosmopolitan
• Scientific American
• FDI in Hindustan Times
• FDI in Business Standard
• Awaiting approval
• BusinessWeek/CyberMedia
• Wall Street Journal/ Times of India
• BBC/Times of India

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The Unresolved Issues

• Indian edition of a foreign newspaper in the news
  and current affairs section
• Brand name usage for license agreement in the
  news and current affairs section
• What constitutes news and current affairs and
  specialty
• The New York Times and International Herald
  Tribune controversy

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The BPO Destination

• India is emerging as a destination for high
  quality, low cost, back office work
• Business Process Outsourcing (BPO) in the
  content related area is currently 520 Million
  from India and is expected to reach 3 Billion by
  2008
• Service Offerings
• Content Creation Services
• Digital Asset Management
• Business Process Outsourcing Services
• Production Services
• Data Conversion Services

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The Opportunity

• India has to be a critical piece of the plans
• A back office destination

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An example CyberMedia

• Established 1982, CyberMedia is South Asia's
  first and largest specialty media group, and
  among India's top five magazine publishers
• The group's nine publications lead in their
  respective domains
• Infotech (Dataquest, PCQuest, DQ Channels India,
  DQ Weeks)
• Telecom (VoiceData)
• Consumer electronics (Living Digital)
• Biotech (BioSpectrum)
• The group has expanded vertically, consolidating
  the ICT space, as well as horizontally with other
  media products including online (www.ciol.com),
  events and television
• The group's media services include market
  research (IDC India), content outsourcing,
  multimedia, gaming, and media education (School
  of Convergence).

Cyber Media is the biggest B2B publisher in India
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The Recent Political Changes

• Congress led by Sonia Gandhi came into power
• Everybody including the congress was surprised
• They have formed the government with support from
  the left
• Manmohan Singh, the Prime Minister was the
  initiator of the reforms and these are likely to
  continue
• Currently everybody has decided to wait and watch
  their first moves, budget next month will give
  the direction