When I call Girish Ramdas, the co-founder and CEO of Magzter, he is in New York. His office is headquartered there and the company’s back-office work is done in Chennai, his home town. He promises to meet me for lunch at Sandy’s in Wallace Garden (his family’s favourite restaurant) the day he returns. I ask him if he won’t be jet-lagged. “No problem,” he assures me. True to his word, we meet at Sandy’s, which is a delicatessen that makes its own sinful chocolates and desserts. He looks all bright and fresh, saying a 10-km run has revived him.
With 25 million users and more than 30,000 downloads per day, the world’s largest digital magazine service app Magzter’s growth rate, since it was launched in 2011, has been nearly 300%. Magzter offers thousands of magazines in international and Indian languages, including certain niche publications that would otherwise be very difficult to find online. It has recently added book titles to its offerings. Ramdas wants to make 1 million books downloadable from his platform and has made a beginning with the introduction of 10,000 book titles. Magzter wants to establish itself as a one-stop reading destination in the digital world. It is about to add news as well.
We order Caesar salad (mine egg-free) prepared with organic vegetables and I ask Ramdas about his hectic travel schedule. “Last year I was in India for 100 days,” he grins. Magzter is only three-and-a-half-years old. “What we want to be is the YouTube of this space. You think videos and you look up YouTube, and we want you to think reading and look up Magzter.”
I ask him how he and his friend and co-founder Vijayakumar Radhakrishnan (the president) started Magzter. Before launching Magzter, Radhakrishnan had a software engineering company, Network Technology Solutions, while Ramdas had set up a software company called Dot Com Infoway. He had also launched a film magazine called Galatta. “My company used to outsource projects to Radhakrishnan’s company for web clients and soon we merged the two companies to create a single entity in 2005,” Ramdas says. When the iPhone and iPad came to India, he and Radhakrishnan decided to turn the magazine into an app. Galatta was Asia’s first magazine app for the iPad. Then came the Android and other new platforms.
It struck Ramdas and Radhakrishnan that theirs was the perfect app to serve magazine publishers who were eager for a user-friendly, one-stop solution to reach the digital readership. The content owner uploads pages, and the magazine is published on multiple platforms almost instantly. Built-in MIS reporting functionality allows publishers to monitor metrics in real time. When Ramdas approached a large publishing house in Delhi, he was given one of their magazines on a trial basis. The publishing house was trying to build its own platform, but within 45 days Magzter was given all the 17 publications of the group.
Magzter rapidly scaled up to become the world’s largest creator of Apple Newsstand apps. Within a year, it attracted more than 3 million users and a growing list of top magazines. Kalaari Capital, a leading investor in early-stage businesses, spotted Magzter. What works for the company is that its technology is device-agnostic, unlike Apple or Google Play Newsstand which is restricted to a single technology and device. “Google’s Newsstand has 600 magazines. We have content from 60 countries,” he says. Magzter’s application can be downloaded for free onto any device including smartphones. Its OREY (one-click real-time everywhere) publishing system allows publishers to upload content with a single click where the cloud software crunches the content to suit multi-device distribution. This is done in less than 60 minutes. “You know, ‘orey’ means one time in Tamil. We are local as well as global.” Magzter acts as an ‘aggregator for aggregators’. “Nearly 25% of the content on Apple’s Newsstand is provided by us, so we really do not view them as direct competitors.” Samsung and other device manufacturers, who are keen on creating a device app, approach Magzter to partner them on content aggregation.
I follow up my salad with a falafel roll and Ramdas, who says he eats anything that moves, asks for a cilantro chicken burger. He tells me that, in December 2013, Magzter raised Series B funding to the tune of $10 million. The round was led by a wholly-owned subsidiary of Singapore Press Holdings with participation from its existing investor Kalaari Capital. A significant portion of this investment is being used for Magzter’s global expansion. “We had to have our headquarters in New York. It is the nerve centre for publishing industry. Many publications such as all Hearst Group’s magazines, Newsweek, Bloomberg are on our platform and they all are around 1 km from our office,” Ramdas adds.
Magzter currently has eight offices across the world. “We create local teams that will represent Magzter to publishers in the regions we don’t know the language. In Spain they speak English and Catalan. There are 140 publications in Catalan. We have both English and Afrikaans publications on our platform in South Africa. All Indian language publications are with Magzter. We have been bringing vernacular publishers online. This is a huge hit with the Indian diaspora. Our multilingual focus has set us apart from other aggregators who tend to focus on single geographies. We plan to be in most geographies,” he says.
Ramdas says the digital publishing platform is free to all publishers where there is a 50:50 revenue-sharing agreement on sales. “We make all our money through subscriptions.” In the next two years, subscription will only be 30% of Magzter’s revenue. “The rest will be from digital and experiential advertising,” says Ramdas. This will be a mix of video and interactive advertisement in the magazines. The template for Rolex advertisement in Forbes India magazine, for example, was developed by Magzter and given to Rolex. The user can see what the watch looks like and how it works, and can click and buy it. Forbes’ tablet version was sponsored by Rolex.
We end the meal with Sandy’s famous chocolate cake. While waiting for it to arrive, I ask Ramdas whether Magzter has started making money. He tells me about the new monthly subscription model they launched early this year. “It is like the successful monthly subscription model adopted by Netflix for movies and TV shows. We are opening access to a library of about 2,000 magazines, for R499 a month under the Magzter Gold plan.” In another plan, Magzter Gold Lite, users can read five magazines of their choice at R249 a month. Both the plans are priced at $10 and $5 a month, respectively, for global markets. “Because of the plan, more than 100 new publishers signed up to Magzter across the globe. We have a larger library than our rivals.”
Ramdas says Magzter could have broken even if it was not spending on growth. “We have to keep coming up with new ideas and introduce them to 100-year-old publishers. The $100-billion print industry is going digital. Can you imagine the potential?”