As the valuation game made way for value creation game in the wake of the economic slowdown, the media industry is seeing its share of adversities. The industry leaders, too, are not spared, and despite the various loss stories across the sphere, one example that has left many stumped is of Bennett, Coleman and Company Ltd. BCCL’s top management has been busy last week issuing diktats on not just freezes on any kind of costs but also a rigorous exercise of “rightsizing” or downsizing.
Both the editorial departments and the Response divisions of the company have seen employees being handed out pink slips with a two-month severance pay. BCCL’s dominant position in the market has made the subject a discussion point in any industry gathering, and the conversations range from BCCL experiencing first of its kind of loss in revenues seen in the last century – according to some industry sources there is a Rs 500 crore loss in revenues – to figures like a 1,000 pink slips being handed out. The veracity of either figure could not be done since BCCL officials either did not want to be quoted on the subject or were not available at the time of filing the report. The speculation of a 1,000 employees being eventually asked to leave was vehemently denied by most at BCCL that exchange4media spoke to. Nonetheless, BCCL sources have confirmed that the company has undertaken retrenching at an unprecedented scale.
BCCL Chief Ravi Dhariwal had sent an internal mail to all the directors of the company last week. Sources informed that the content of the mail was not very different from all the other memos seen and read in the last few months, where company chiefs have articulated the tough times faced by the industry and the need to tighten belts due to the declining advertising market. Dhariwal was not available for comments at the time of filing the report.
A company source explained, “Look at all the BCCL businesses at present. These were all from the view of protecting the print business and future preparation. They were never meant to be businesses that were to deliver in initial stages. Hence, whether it is Times OOH, the radio business nationally and internationally, Zoom or even Times Now – all the businesses are at present making losses.” As is known, Zoom had secured funding from Meryll Lynch a year back, and it is believed that this funds inflow would not be impacted in the slowdown.
Times OOH has not been so lucky, as it was impacted when Lehman Brothers that had invested in the company went bankrupt last year.
The plans for ET Now from Times Global Broadcasting appear to be on track. A source divulged, “It is another couple of months before the channel will be launched, but so far the plans are on track.”
Times Internet and Times Business Solutions are two divisions that have faced severe problems and many are expecting the Times Business Solutions division to shut down or merge with Times Internet. A source from this side of the BCCL business said, “Times Business Solution was doing what Times Internet should have had been doing in any case. The rationale to have the two as two different business units was creating problems for both from the beginning. Right now, with all cash lines choked, these businesses were the first to get hit.”
It is evident that a significant portion of BCCL revenues was dependant on the print business of the publication The Times of India, especially in cities like Mumbai and Delhi. With the advertising revenues of these and of all the other print businesses, including regional publications, decreasing substantially, BCCL has felt a strong pinch of the slowdown.
One may argue that who has not. The results of listed media companies like HT Media, NDTV, TV Today, and IBN Network, among others, have seen serious slump in numbers – some are down by 20 per cent and some even by 40 per cent. But many in the industry are plain worried when job security across rungs vanishes with a player as dominant and cash rich as BCCL, and severe cost cutting measures see many activities either being closed down or put on the backburner.