CEO | 23 Sep 2011
First of all, in media we need to decode the word – ‘marketing’. Unfortunately, in media industry marketing is still known as hoardings and just promotions. We need to understand that the most core job of marketing is understanding consumers better and developing an insight. And then ensure that those insights are used when you develop your brand… A large part of marketing should be to work along with the editorial to understand the consumer better. Once that part is done, then there are many ways to meet the consumers’ needs.
Amit Chopra is the Chief Executive Officer of Hindustan Media Ventures Ltd (HMVL). He had joined the company on January 1, 2010. Chopra holds a Bachelor’s degree in Technology from the Indian Institute of Technology, Kharagpur, and a post graduate Diploma in Management from the Indian Institute of Management, Ahmedabad. He has over 14 years’ experience and has previously worked with HT Media, Hindustan Unilever Ltd and EXL India Pvt Ltd.
In conversation with exchange4media’s Nitin Pandey, Chopra speaks at length about growing readership of the key media properties of Hindustan Media Ventures, boosting advertisements, expansion plans and more...
Q. Prior to joining a media company, you were with Hindustan Unilever Ltd and EXL India Pvt Ltd. How has your experience been working with a media company? How easy, difficult or challenging is it to work with a media company than any FMCG?
At the end of the day, fundamentally, you are dealing with the customers. It does involve a great deal of understanding the customer better and tailoring your product accordingly to fulfill the needs of that consumer. From that perspective it is all about understanding customers. HUL and EXL are extremely professionally run companies. HUL truly helped me develop myself as a professional. But media companies have their own nuances. Here, you are in a business which impacts the lives of many people through the product you take out everyday. Here, you have the opportunity to contribute in the progress, development and empowerment of the country. So, media has a very nobler part to it, which is very exciting. And I have been fortunate enough to work with these highly professional companies. In HMVL, we work with an extremely professional team. Thus, there is a similarity in the kind of work culture that is here and where I was working earlier.
Q. How differently do you deal with consumer here now?
In HUL, where I spent a substantial part of my professional life, the product is not going to change everyday. While the colour may change, emotional message around the product may change, the fragrance may change, but the basic purpose of soap will not change – soap will remain soap. While in media, you are in a business where the product changes its structure everyday. Every morning you have a different newspaper, which gives far more dynamism to this industry. So the customers we are dealing with in the media space are far more dynamic.
Q. We have recently seen that Hindustan newspaper is being promoted through reality shows like ‘Just Dance’. For an already established newspaper brand like Hindustan, do you think promotional activities really help?
I think, first of all, in media we need to decode the word called ‘marketing’. Unfortunately, in media industry marketing is still known as hoardings and just promotions. We need to understand that the most core job of marketing is understanding consumers better and developing an insight. And then ensure that those insights are used when you develop your brand. Even in media industry, the role of marketing remains to understand the consumer and, therefore, working along with the editorial to ensure that your product is meeting the changing needs of the consumer. So, from that perspective, marketing in media industry and FMCG is not only about branding, advertising and communicating. A large part of the role is to understand the consumer, how are they consuming the category, what kind of content are they looking for, developing those insights through editorial so that we can make content which is empowering them.
A large part of marketing should be to work along with the editorial to understand the consumer better. Once that part is done, then there are many ways to meet the consumers’ needs. For instance, if you have an education supplement, you can also do counseling to fulfill the need of that consumer better. Just like Hindustan aims to stand for the ‘Tarakki’ (progress) of the readers. Hence, we need to ensure that we deliver that through our product. Later on comes talking to the consumer about what I stand for.
Q. So do you do these surveys along with the editorial team?
We typically hire well-known research agencies because these surveys have to be done in a statistically robust way. It needs expertise, hence we go to market research companies. Of course, editorial helps in understanding the demand of the readers and understanding research better.
Q. How much budget do you kept aside for marketing and promotional activities?
No fixed norms for that. It is completely dependent on the need and requirement. We need to understand that in this field the biggest marketing happens through the product itself. The experience of consumer changes with it every morning. And I think that is a very large part of the marketing, which also require a greater part of the investment. That, however, cannot be counted as marketing investment.
Q. What are some of the marketing and promotional initiatives that you have undertaken recently? You have also tied up with Star...
Yes, we have tied up with Star for the show ‘Just Dance’. A lot of participation is seen from the Hindi belt in reality shows like ‘Just Dance’. So in a way you contribute a bit to that talent that has come to these platforms. As of now, it is only for ‘Just Dance’, but going forward we can look at other options too.
Q. Coming to IRS numbers now, Hindustan has performed exceptionally well in most of the markets. Apart from growing average issue readership (AIR), what are the key trends that you have noticed in these markets?
First of all, let me clarify on this handsome growth of Hindustan in various markets. We have invested substantially in increasing our footprint with new editions in all the markets. In the last three years, our circulation has gone up by 60 to 70 per cent - from 13 lakh copies to 22 lakh copies. But, newsprint cost has also gone up sharply in the last few years. So in that sense our readership numbers are not in tune with the kind of investment that we have done. We believe that we are actually far larger than what the IRS shows today. The kind of newsprint investment we have done is the highest among all the listed companies. We believe that there is a lot more that lies ahead.
Q. Interestingly, while you grew in other markets, Hindustan has seen a decline in its AIR in the Delhi region as compared to the previous year, according to the IRS 2011 Q1 data...
There was an increase in the cover price of the newspaper in the last year and a half. As a result, for 6-7 months we did experience some kind of stagnation in the market. But in the last few months, we have seen a sharp increase in circulation and demand. Therefore, I am hopeful that sooner or later this will start reflecting in readership, also considering the fact that Delhi is a growing market, while the NCR is growing more rapidly. So, there is no reason why the newspaper’s readership will not grow in the market.
Q. The AIR of any English daily has de-grown in the market as per the recent IRS results. Do you think that newspaper readers of metro cities like Delhi may switch to new media?
I am not sure if readership is going down. Delhi and NCR have gone through a huge change in the 2001-11 period. Areas like Gurgaon and Noida have grown very rapidly. The issue with IRS is that the data is completely dependent upon the 2001 Census results. IRS still does not recognise the very large change that has taken in the Delhi-NCR market. The way population explosion has taken place in Delhi-NCR, it is very difficult to believe that readership of English newspaper is going down. I think there is certainly a problem with the tool (IRS). The only dampening fact can be that younger people are not reading more and more. But, I believe, that gets compensated by the population growth in the region. As affluence level rises and people get educated, English readership will certainly rise. So, I am not too sure whether these numbers reflect the right trends.
Q. When you had announced your IPO last year, you had said that the money raised from the IPO would fund the expansion of the newspaper in the Hindi belt. You then went on to launch Hindustan from Gorakhpur, then there are plans for Moradabad and Aligarh as well. Apart from UP, what are the other states that you are focusing on?
In Bihar, we have a new unit coming up in Gaya and construction for the same is already on. We will soon start a new unit in Purniya as well. The markets of UP and Bihar are rapidly growing with firm economic growth, which offer enough opportunities to keep investing in these markets. In addition to that, we are looking for opportunities in other states too. As and when we find that the time is right and opportunity is available, we are happy to invest. At some stage, we will go for a second unit in Uttarakhand too.
Q. It is said that in regional markets, there is a space for a maximum three big players to grow. Do you also believe in it?
I think it is a function of the size of the state as well. More important is the economic size of the state, which decides the advertising potential of the state. The advertising pie of the state really decides how many players can co-exist. In some markets which are very small, only two players can exist. For instance, in a market like Maharashtra, where there are so many players, I am sure they must be raising money also. But there are also markets like the North-East, where probably very few players can sustain. Thus, there is no such formula that a market can take only two or three players. It is a function of how large the economic size of the market is and, therefore, how the advertising market is developing in the state.
Q. What are the key factors that you keep in mind before entering any market?
Honestly, we have not made any new market entry in the last 2-3 years. But, some of the parameters that we keep in mind include: how big the market is, the advertising revenue pie, how is the competition, how is the newspaper penetration in the market. And lastly, will we be able to offer any product differentiation to consumers there.
Q. HMVL had announced a 24 per cent year-on-year increase in net profit for the quarter ended March 31, 2011, helped by a robust growth in advertising revenues. What has been your strategy to attract more advertisers from the Hindi belt?
First of all, the footprint of Hindustan newspaper has grown rapidly over the period of time. So as we have grown in a particular market, one of our pillars of growth has been to get more and more advertisers for multi editions so that you can get better revenue share. Also, it is important to pitch yourself in terms of readership and circulation in that market. Like our Bareilly and Gorakhpur editions were launched at a level where we were visible, large and impactful in that market, so that you are able to offer advertisers a large enough audience and response. Many of these markets are at an early stage of retail development. Of course, we have invested in a big way and our circulation as well as readership have gone up.
Q. At a time when newspapers are going more and more hyper local, has enough been done by newspaper groups to attract smaller advertisers?
Hyper local content is more about remaining relevant to the readers. So, hyper local is more of a reader-driven formula than advertiser driven. But because you come up with a customised paper for every district, you are in a position to attract smaller advertisers. And I think we have been able to tap that opportunity.
Q. How do you see the subscription revenue model for newspapers? Do you believe there should be higher cover price of newspapers?
During the economic downturn (2008-09), the advertising revenue for some players came down. Our experience says that whenever ad revenue has come down for newspapers, there was an effort to balance it out with subscription revenue. But the moment the economic situation strengthens, focus returns to ad revenue – because that is the largest part of the revenue. And the reality of the matter is that Indian readers are not ready to pay for the content.
Q. Any plans for ‘Nandan’ and ‘Kadambini’? Can we see group launching any new magazine in the near future?
In the genre that ‘Nandan’ and ‘Kadambini’ are, there is very little advertising opportunity. In the women’s magazine genre, we think there is some opportunity. Recently, we launched ‘Anokhi’ – a weekly magazine. In the general interest magazine domain, we don’t see much opportunity for advertising. Right now, our focus is to establish ‘Anokhi’ in terms of readership, circulation and monetisation.
Q. You launched ‘Hindustan Jobs’ in May 2011. How has the response been so far?
India is a temple of youth and our population is very young. These young people are focused big time on education. Therefore, we believe that ‘Hindustan Jobs’ is an initiative to reach out to them. This also helps us to stick with Hindustan’s thought process of ‘Tarakki’. We are able to achieve the brand target through some of these products. ‘Anokhi’ and ‘Hindustan Jobs’ have been performing very well in the market. Though ‘Hindustan Jobs’ is priced high, we are still seeing good demand for it. We want to circulate ‘Hindustan Jobs’ throughout the country. We have already targeted Punjab Haryana, Chandigarh, and Himachal Pradesh.
Q. How has the advertisers’ response been to ‘Hindustan Jobs’ and ‘Anokhi’?
Women’s magazines do get advertising, so we have got good response for ‘Anokhi’. Jobs is still not a very large segment, hence it will take some more time. But the way circulation and demand is in the market, we believe it will attract more advertisers.