The business of media has never been a friendly one with the bitter competition for shares of the readership and advertising revenue pies. And if you are at the top of the leadership ladder, there is the overriding pressure to control advertising rates.
Bennett, Coleman and Co Ltd (BCCL), the parent company of The Times of India Group, and the country’s largest and oldest media house, has been quietly rewriting the rules of the game in recent months. In October 2006, it set up a 50:50 joint venture with archrivals Hindustan Times to launch a ‘compact’ in Delhi. It came as a complete surprise to industry observers accustomed to a market that has seen the two media giants fight tooth and nail over the last one and a half decades.
And within a month of that, BCCL inked a Business Cooperation and Arrangement Agreement (BCAA) with Sandesh Ltd, publisher of Gujarati daily, Sandesh, under which both companies have agreed to cooperate in certain areas of their business such as ad sales, distribution and printing. The Times of India Group has even picked up a 12 per cent stake in Sandesh through preferential equity.
Then, in quick succession, in November 2006, BCCL signed a business cooperation agreement with Mid-Day, whereby BCCL picked up 6.65 per cent stake in Mid-Day Multimedia for Rs 211.1 million. The holding will be routed through a preferential allotment of Mid-Day shares at Rs 60 per share. This alliance, too, would work for printing, circulation and advertising sales of the two organisations.
And if industry word is anything to go by, BCCL is looking for more such relationships and Rajasthan Patrika is at the top of the list.
So what is The Times of India up to?
At the time of signing the JV with HT Media, Vineet Jain, Managing Director, BCCL, had said, “We are happy to be joining hands with HT Media and using our synergies to further develop the English newspaper readership base. This JV is part of our commitment to best serve the new aspirations and mindsets of readers and provide the best possible value to advertisers.”
BCCL’s Executive Director, Ravi Dhariwal, reiterates this. Asked how an organisation could think of partnering with a bitter rival, he said, “I must first point out that neither of these partnerships has been with competition. Instead, they have been for products that are complementary to the parties involved. For instance, with HT it is a JV for a compact, a new product that would be complementary to both TOI and HT.”
He further explained, “Mid-Day is an afternoon product and has its own loyal clientele that wouldn’t change – even if you compared it with Mumbai Mirror, it isn’t one versus the other. We have seen that people who buy these products don’t really drop one, but add on. We believe Mid-Day is a great product and complementary to TOI.”
It may be noted that BCCL had a stake in Mid-Day prior to this as well, which it had subsequently offloaded. Dhariwal pointed out, “That was just a financial stake. What we have done now is far more strategic, where we are going to help each other in printing, circulation, advertising, expansion in geographies and, as the partnership flourishes, there may be more ideas.”
As for Sandesh, Dhariwal stated that the publication again didn’t compete with TOI. The alliance with the Gujarati paper was aimed at delivering Gujarat better. And Rajasthan Patrika? “Too premature,” he said.
Coming back to the original question, Dhariwal said, “On how do we work with people who are also seen as competition? Let me put it this way: there is great trust between the partners. There is a feeling of brotherhood and of doing things together. Most importantly, the objective of making print a very attractive medium for readers and advertisers is the same for all and that can be quite a driver.”
However, why now? “Because of the new thinking that collaboration is better than competition. The media space has grown in an unbelievable fashion and our philosophy is really to partner with other press groups and make sure that press offers a compelling argument against all other media.”