)
Media veterans say there is a golden rule to gauge a magazine's profitability in India: if it is ranked first in its segment, it is making money; if it is at the second spot, it is surviving; and if it is in the third place, it is not only losing money but its readership is stagnating as well.
Kolkata-based ABP's Businessworld magazine, which the company sold recently to Exchange4media, was in a dire predicament through the 1980s and 1990s. It cut through the clutter at the start of the 21st century with a fresh approach to reporting which was primarily focused on newer sectors like IT and telecom and emerging business leaders like Azim Premji and Sunil Mittal.
As the economy went into an upswing, the magazine too turned profitable. However, it had started to lose its edge again. Falling circulation, shrinking market, competition from digital media and the overall economic slowdown were taking a toll on it revenue. But, these were not the only reasons why ABP decided to sell Businessworld.
Businessworld's fate was sealed the day ABP shut down its 24-hour Bengali general entertainment channel, Sananda TV, soon after its launch in 2011. The channel fell flat and it was packed up exactly a year- and-a-half later. This was hard for a group not accustomed to failures. Most of its products are doing exceedingly well in their respective markets. The Telegraph, the English daily, has undisputed dominance in Kolkata. It toppled The Statesman and has maintained its lead even after the entry of The Times of India. The group's Bengali newspaper, Anandabazaar Patrika, is also miles ahead of its competitors. Sananda TV, ABP insiders say, was a hangover of the group's attempt to crack the general entertainment code and, like all hangovers, it quickly wore out.
"Sananda TV was a decision made in a hurry with no clear goals. If you check properly, no non-Hindi general entertainment channel has done well in the recent past due to many reasons, one of them being the decline in ad flow," says one of the advisors of ABP.
The financial impact of Sananda is still rippling through ABP's headquarters in Kolkata. It has added a debt of Rs 250-300 crore on ABP's balance sheet, indicates the advisor. ABP Managing Director & Chief Executive DD Purkayastha confirms the group's debt problem: "Yes, that impact is there on the books."
The sameness of content was Sananda's biggest problem. "The target group for non-Hindi general entertainment is not growing. People are also at times getting bored with the similar sort of content with the only difference being the language. Going forward, ABP is intentionally trying to stay focused on Bengali-inclined print products. It is moving very cautiously as far as television channels are concerned," the person quoted above adds. The other factors behind Sananda's demise were the channel's inadequate digital penetration and low advertisement rates.
While ABP was still struggling with the financial distress brought about by Sananda, rising newsprint costs and a depreciating rupee compounded its woes. Newsprint costs have shot up over 20 per cent in the last few months, even as advertisements have dried up. Purkayastha says the current economic crisis has been the worst in his career so far.
Tony Joseph, former editor of Businessworld, believes the magazine's problems are a reflection of a larger shift in the media landscape. "People are consuming more information than ever before, but increasingly, print provides a smaller share of that," he says.
"Most information consumption today happens online. Magazines are in bigger trouble than newspapers, because newspapers, forced by competition from both television and the online media, have had no option but to cut into the features and analysis space traditionally occupied by magazines. But in the long term, all media organisations that depend mainly on revenue from print products will find the war unwinnable. Only those brands will survive that can intelligently and creatively reinterpret themselves for the digital era," Joseph explains.
However, Businessworld's position in the market had always been tenuous. Joseph says within the first week of his taking over as editor in 1998, there were rumours the magazine was shutting as it had fallen far behind its competitors. But unlike this time round, the editorial team used the crisis to recast the magazine. The nature of the Indian economy was changing dramatically in the 1990s. Sectors such as services, IT, telecom and retail, driven by a new crop of corporate leaders like NR Narayana Murthy, Azim Premji, Sunil Mittal and K V Kamath, were coming to the forefront. Businessworld decided to focus on the new sectors, new leaders and new concerns, while the competition continued with its old ways.
And the gamble paid off. Within a matter of weeks, circulation shot up by around 50 per cent and there was a new buzz around the magazine. The change in the editorial stance was followed by a change in the frequency (from fortnightly to weekly) and a reduction in price. Aided by these measures, it became the largest selling business magazine in the country by a clear margin.
But then things went on a downslide. Circulation stopped growing and ad flow began to wane. It wasn't easy for ABP to sell Businessworld. Among those who were tapped to buy the magazine included Sanjiv Goenka (owner of Open) and the Malayala Manorama group before it was sold off to Anurag Batra of Exchange4Media and investment banker Vikram Jhunjhunwala.
For the new owners, the foremost task at hand is to reorganise the magazine for an increasingly online readership. "Businessworld continues to be a strong brand, so there could also be opportunities to build revenue-generating platforms, both online and in the physical world," says Jospeh.
Meanwhile, ABP is gearing up to sell more businesses. Penguin Random House, one of the biggest international publishing houses, is likely to acquire Ananda Publishers' (part of ABP ) stake in Penguin Books India, a 55-45 venture between the two.
