Battles ahead

As market leaders consolidate and expand into new territories, we are likely to see escalating price wars this year.


THE issue of the Times of India on the first day of the new year displayed this group's usual flamboyance: the full page advertisement in which the paper was wrapped, and its lead story and other stories scattered across the paper, were all about itself. Specifically, about its new campaign called India Poised, which Amitabh Bachchan was helping to kick off. But for the trade, the real point of interest was the very small print on the masthead, the paper's price, which it put like this: "Rs. 3.75 along with the Economic Times or Rs. 4.50 along with Navbharat Times."
2007 heralds an era of even bigger price wars than have been seen so far in India's metro cities. Two newspapers for the price of one, made possible by the fact that they are all flooded with advertising. The Hindustan Times is about to launch a business daily in Delhi and Mumbai this month. Both market leaders, HT and TOI are offering one newspaper virtually free along with their flagship edition, in the case of the former, its new business paper. In doing so they are also taking pre-emptive action against another new entrant into this market. India Today, the country's leading magazine publisher, is also poised to launch a morning daily in Delhi this month. Last year, TOI and HT jointly announced a collaborative new daily for Delhi to send a signal to likely contenders. And in Mumbai, Bennet Coleman and Co. launched an afternoon edition of Mumbai Mirror to extend the group's dominance to the afternoon paper market.
New markets
In December 2006, the country's market leader, Dainik Jagran, launched a new paper in Lucknow and Kanpur, a bilingual daily called Inext. The Rajasthan Patrika meanwhile launched a Hindi daily called Daily News, aimed at a similar market. Earlier in the year it had launched an evening daily called News Today in Rajasthan, and later in the year in Indore. The Bhaskar group added a financial newspaper to its stable, DNA Money. The year 2007 will further what is as yet an incipient trend: of media consolidation through expansion.
The Times of India had decided when it closed Hindi belt editions of Navbharat Times in the 1990s that it would focus on the English market. But its acquisition of Vijay Karnataka in 2006 demonstrated a change of mind, and signalled that it was now eyeing opportunities in the regional language press.
Last year also saw Prabhat Khabar, the Ranchi newspaper that has been winning attention in the last few years for standing up to competition through the quality of its journalism, become a possible target for acquisition. Its owners set out to seek a private equity placement to raise finance for sustained expansion and ended up discovering that the paper had a market valuation that they had not dreamt of. So then they began to look at selling the paper and those who came forward were the Hindi market leaders — Dainik Jagran, Hindustan and Amar Ujala. As the new year dawns this paper's fate remains undecided and its journalists are restive. If Jagran or Hindustan buy it, it will represent consolidation of the Jharkhand newspaper market.
Another feature of the media consolidation witnessed in 2006 was the way the bidding for FM licenses went. Leading TV and newspaper groups bid for them, acquiring licenses in places across the country, away from their traditional territories. The Times of India, Dainik Jagran, Rajasthan Patrika and Sun TV have all acquired a handful or more of radio licenses each. Cross media empires are growing. Big business is entering the media in DTH, the Tatas are already there, R-ADAG and Sunil Mittal of Bharti have announced their DTH ventures. And when a very big player comes in, the scale of his entry itself represents consolidation. Though its radio venture did not exist in July last year, Adlabs, whose majority owner is Anil Ambani, now has radio stations in nine cities. The draft Broadcasting Bill was partly aimed at containing cross media expansion, but it hasn't been heard of in a while.
Similar trends
The magazine market is seeing expansion by existing leaders such Outlook and India Today because advertising is booming. The Outlook group launched Outlook Business and Marie Claire, and both market leaders spawned new lifestyle adjuncts to the main magazine, bursting with advertising, plastic-encased freebies which are a pain to extricate, but which make money for their owners. Business Today added a new monthly magazine. Meanwhile, for a few years now, glossy supplements in Hindi newspapers have already dampened the magazine market in that language.
Consolidation is increased by the multi-edition spread of existing leaders, and not surprisingly, many added editions in the course of 2006, notably Dainik Jagran, Dainik Bhaskar, Amar Ujala and Hindustan among Hindi newspapers. India Today launched a Bengali edition. When market leaders expand, the competition spends more to stay where it is. And those on the margin, particularly small regional papers with local markets, fight for survival.

SEVANTI NINAN