It’s a grim reality for media companies as the rupee plunges to new lows and so does advertiser sentiment. While some companies are cutting back on editions and selling off excesses, others are cutting flab and opting for leaner and meaner organisational structures.
After 18 long years of bringing out auto magazine BS Motoring, the group sold it to Delhi Press for an unspecified amount in April this year. The Outlook Group enforced a closure in its magazine units, namely Marie Claire, People and Geo. In the process, more than a 100journalists and numerous non-journalist newspaper employees were displaced. Prior to this, Bennett, Coleman and Co. Ltd (BCCL) closed down its weekend newspaper, The Times of India Cresteedition. Crest had been launched in 2009 and was positioned as a weekend paper. It sold over 2 lakh copies nationally. More recently, TV 18, part of Network 18 which beams channels such as CNBC and IBN7, terminated 300-plus people as part of a cost rationalisation exercise. The list of sacked employees included journalists, camera crew and personnel in the technical, sales and marketing teams. Network 18 also terminated the senior staff of its magazine Forbes, which included its editor Indrajit Gupta.
Outlook Group president Indranil Roy said that the three discontinued licensing brands were an unviable business proposition for them and they had decided to discontinue with the publishing of the international titles and focus on their own brands. ?We have absorbed a few of the staff as per our requirement and fitment with our other magazines. We have amicably settled all differences (with staff), the issue is closed now. We will strengthen our brands and concentrate in growing them,? he said. Roy added that from an advertising perspective, this year is as tough as last year. ?The going will be tough ahead. Right now, there is no signal in the economy to say that things will improve in the next couple of months.?
While speculation is rife in media circles that the Outlook Group is on the lookout for a buyer for its flagship magazine Outlook, Roy says, ?The news of selling our business is absolutely wrong. Our promoters are totally committed to the business.?
Tarun Rai, chief executive of Worldwide Media which publishes titles such as Grazia and Top Gear maintained that while growth in certain genres of magazines may be slow, new special interest magazines around travel and lifestyle were growing at a healthy rate. ?The readership of lifestyle and special interest magazines continues to grow despite issues with distribution. News and general interest magazines, like their western counterparts, are not doing well while the lifestyle and special interest magazines are growing rapidly. In a growing market, the decision of Outlook to close down three of their titles was a surprise. People and Marie Claire are fine magazines and were healthy competition to some of our titles,? he said. Worldwide Media said that it has expanded its titles from four in 2008, to around 13 today and that they are seeing around 20% growth in revenues.
BCCL and Network 18 officials did not get back to queries posed by BrandWagon by email and phone. When asked if revenue constraints had forced the group to sell off its auto magazine, Akila Urankar, president of Business Standard, said that they were primarily a newspaper company and they wanted to focus on their core product, which was why they sold off the auto magazine.
Day & Night News, a multi-lingual 24-hour satellite television news station from Chandigarh with focus on northern India, has said that it was scaling down in a big way. Kanwar Sandhu, its managing editor, said that he decided to resign on moral grounds.
?The channel started around three years ago. Since it was not allowed to run on the cable network in Punjab (which is crucial for ratings), losses continued to mount. So the management decided to scale down the operations in phases. It was decided not to be on any direct-to-home platforms. We were on Dish and DD Direct Plus till now and earlier, we were also on Airtel, Big TV and Videocon. Dish and DD Direct Plus were discontinued from August 1, 2013. In the first phase of the scaling down process, I was asked to retrench about 40% of the employees. Since I was the founder and managing editor, I decided to resign on moral grounds. I could not axe so many employees and save my own job,? he said.
Independent media consultant AS Raghunath said that the print and broadcast industry was struggling to stay relevant in the wake of the onslaught by digital media. ?News is now available in real time thanks to Twitter and other social networks. Traditional news companies have trouble keeping up,? he said.
News broadcasters may find their troubles enhanced. The Telecom Regulatory Authority of India (Trai) is looking to implement a 12-minute advertising cap for television. Minister for information and broadcasting Manish Tewari has, however, said that news channels must get an extension on the 12-minute ad cap, ?at least till the final phase of digitisation is complete?. But the matter is still under the purview of the Trai and could go either way. The News Broadcasting Foundation (NBA) said that if the advertising cap were indeed implemented at this stage, the revenue loss across news channels would be in excess of R500 crore.
Neeraj Sanan, chief marketing officer at Media Content & Communication Services (I) Pvt Ltd which runs ABP News, said that the picture looked very grim indeed. ?The Trai is being hasty in implementing this ad cap and is not looking at the viability of the news channels. More than 95% of news channels are free-to-air and are dependent on advertising. That is their only source of income. The advertising rates have been stagnant for the last three years and even in the current year, given the sluggish economy, it looks improbable that we could get a steep price hike in the market. Smaller channels are likely to shut shop and even the larger ones will have to cut back sharply on their expenses,? he said.