Print's new outpost the Himalayan kingdom

India's media barons would do well to cock an eye at the Nepali market, going by the experience of a small Indian media group there

India's newspaper barons would do well to cock an eye at Nepal "� they can cash in on a business opportunity there. That's precisely what a small media group has done.

Asia-Pacific Communications Associates (APCA), once a TV software company set up by a handful of Indian journalists, is flourishing in neighbouring Nepal where it quietly runs a publishing business.

Its two-year-old English newspaper 'The Himalayan Times' has displaced Nepal's market leader 'Kathmandu Post' from the number one slot. ('Kathmandu Post' is published by Nepal's media house, Kantipur Publications, which, however, insists that it's still number one).

That's not all. Last year, APCA launched 'Annapurna Post', a Nepali newspaper, to compete with 'Kantipur', the Himalayan kingdom's leading Nepali daily from the same group.

APCA managing director Anikendra Nath Sen, who shuttles between Kathmandu and New Delhi, claims that in less than two years 'The Himalayan Times' has overtaken 'Kathmandu Post'.

"We're not saying that we've nibbled their marketshare, but we've created new readers as the English daily enjoys a circulation of 25,000. And these are government audited figures," he adds.

'The Kathmandu Post' is said to have a circulation of 10,000 copies.

Observes Nepal-based advertising agency Echo Advertising managing director J K Sthapit: "There is no doubt that 'The Himalayan Times' has given tough competition to 'Kathmandu Post' in this market and may be comparatively stronger."

How did APCA enter Nepal's print media market and make a dent on it? In the late 1990s, APCA's programming business on Doordarshan was shrinking and it was exploring opportunities in the overseas markets.

Initially, it planned on launching a television channel in Nepal in collaboration with the country's best known film actor, Neer Shah, who owns a TV software company. However, the project didn't get off the ground.

Eventually, backed by a US-based venture capital fund and an initial investment of about Rs 4 crore, APCA decided to launch a newspaper along with Nepali business partners Ravin Lama and Bhawna Maskey.

"It was not a mindless exercise. The newspaper was launched after extensive research by ORG-Marg," says Nikesh Sinha, vice president (marketing) at APCA.

ORG-MARG found a huge disconnect between what the existing newspapers offered and what the English newspaper reader wanted. The survey also discovered that children upwards of 12 years read newspapers in Nepal.

Armed with the findings, APCA launched 'The Himalayan Times' in November 2001, aimed at readers between 16 and 35 years.

It also took its rival by surprise by pricing the paper at Rs 2 for 12 pages. The 8-page 'Kathmandu Post' had a cover price of Rs 4.

"Besides, we offered six of the 12 pages in colour," says Sinha.

APCA also included other elements in its paper like comic strips, a first in Nepal's print medium market. "We added a section for youth and information on films and music," says Sen.

The APCA strategy also included hiring a local editor, a senior professional with a news agency background. It also hired fresh graduates as reporters, so keeping costs low.

Still, though 'The Himayalan Times' may be Nepal's top English language newspaper, but it's had more than its fair share of problems.

First, though foreign investment in the print medium and in publishing is not prohibited in Nepal, the government could deny applicants permission to launch publications on a case-by-case basis.

So when APCA's local business partners sought permission for foreign direct investment in print, radio and TV projects, the government vetoed this.

Consequently, APCA set up an advertising agency, something that the law does not prohibit.

The company, Asia-Pacific Communications Associates Nepal Pvt Ltd, sells advertising space for 'The Himalayan Times' and for 'Annapurna Post' and distributes the dailies. APCA owns 80 per cent of the Nepali company's equity.

The company also invested Rs 2 crore in setting up a printing press, which falls under Sama Printers Pvt Ltd.

However, the two newspaper brands are owned by two Nepali publishing companies. While International Media Network Pvt Ltd owns 'The Himalayan Times', News Media Private Ltd owns 'Annapurna Post'.

"We have a long-term arrangement with the publishers to print 'The Himalayan Times' and 'Annapurna Post' while we distribute and market the product. But the publishing licence is with the locals," explains Sen.

Needless to say, local print media companies accuse APCA of having made a backdoor entry into Nepal.

Says Kantipur Publications managing director Kailash Sirohia: "APCA has entered Nepal under the guise of a Nepali company. It is completely a backdoor entry," he protests.

Apparently, 'Kathmandu Post' has also publicised the controversial entry of APCA into Nepal. A senior executive at 'Kantipur' also says that the source of funding of 'The Himalayan Post' is suspect.

Last but not least, he contests APCA's circulation numbers and says that 'Kathmandu Post' is still number one as it has a daily circulation of 60,000 copies.

"Besides, our Nepali newspaper 'Kantipur' has a circulation of 150,000 copies," he adds.

In response to these allegations, Anikendra Nath Sen says that APCA's Nepal operations are above board and that the negative publicity by its rival has only helped the newspaper brands.

Currently, APCA's 'Annapurna Post' has a circulation of 23,000 copies. "We need to drive numbers in the Nepali paper as that is where the money is," admits Sen.

Being a small country, the total size of the advertising market in Nepal is about Rs 180 crore a year. Of this, Kantipur Publications claims to snare about Rs 30 crore.

According to Echo Advertising's Sthapit, the growth rates in advertising have slumped as a result of the Maoist agitation.

"The industry was growing by 15 to 20 per cent three or four years ago and now growth is almost flat," he says.

"Yet, it will be an interesting battle to watch. 'Kathmandu Post' has already bounced back with a lower price and more pages. The fight between the two is neck-and-neck," he adds.

As for APCA, its next destination is Mauritius, where it is close to launching a French daily.

Perhaps other Indian publishers should cock an eye at Mauritius too?