The Mid-Day boss has sold his publishing business but he believes newspapers have a future if they invest in business models based on new media outlets.
It has just been a month since Tariq Ansari sold his publishing business to Jagran Prakashan. Also, as luck would have it I haven’t met this gentle, perpetually young media baron for a long time. So I am quite looking forward to a post-exit catch-up and coffee with the managing director of Mid-Day Multimedia (MML) at his office in Mumbai, says Vanita Kohli-Khandekar.
A slim and relaxed Ansari, who’s just turned 49, welcomes me into his office. How does it feel, I ask, even before we sit down. “I have a sense of relief,” he smiles. The whole struggle of running a small newspaper company in the general space is very difficult. It is a different thing if you are in a niche space, like Business Standard is, he says. Rosy (Ansari’s secretary) brings my sugarless black coffee and his hot water.
Isn’t this the same man who has been accused of being a print sceptic? He anticipates my question. “I have great faith in the future of newspapers. But the English urban newspaper and language paper stories are different,” he says. Between sips of hot water, he explains.
As a group, language newspapers in non-metro India have shown huge growth. But the story for metro urban newspapers is different. Going by the Indian Readership Survey (IRS) or the National Readership Survey (NRS) figures, these are not growing in the aggregate. There is also some shrinkage in the percentage share of advertising. Add to this the rising cost of talent and growth of all other media such as radio, the Internet, films, TV, simultaneously. The results are extreme competition and loss of young readers.
This is interesting stuff from someone who has made his money and reputation from selling a tabloid. Like millions of Mumbai commuters, I have grown up with Mid-Day. It survived in the toughest market a newspaper could operate in. That is because Mumbai has been the stronghold of The Times of India, which makes a bulk of its billion-dollar top line from its city edition. And most publishers will acknowledge that the aggressive Times Group is a formidable competitor.
That a puny little company like MML hung on and grew was in great measure due to the 25-odd years Ansari had put into building the brand. But in the last 10 years, ever since Mid-Day went public, even his senior managers have felt that their boss’ heart was not in the newspaper business. He was enthralled by the future (he still is) and dabbled in TV, films, the Internet, SMS, outdoor media and radio long before anyone else. In some of them, especially outdoor and radio, MML lost a lot of money for a small company. That, not the growth of Mid-Day, was the issue, say observers. It is the reason why after growing very fast in the nineties, it has stagnated at Rs 100-odd crore in top line for more than five years now.
“Hindsight,” says Ansari, “is always 20:20.” He agrees, though, that MML placed its bets on other media at a time when it should have invested more in the newspaper business. “We might have grown faster if we weren’t distracted.” His point, however, is that the whole newspaper business is in a state of flux and that MML was simply not big enough to handle the changes that he saw coming.
“In the next few years, newspapers will have to find a way of engaging readers differently,” he says. How? By placing bets on the new platforms and business models that could win, he says. As he points out, 3G licences are being given out; there are 35 new tablet PCs in the pipeline this year. And he read that some lab in Bangalore is probably doing one for $200 (Rs 9,000). “Why wouldn’t Metro India adopt it?” His point is that “newspaper companies that will survive are the ones that have the resources to make bets on new business models”.
A small newspaper such as Mid-Day cannot make those bets because it doesn’t have the money. Why not raise it? “We had a bad time with the out-of-home media. Raising money for bets is a bad idea.” So, he did the next best thing — looked for a buyer who was bullish on the future of the newspaper. Jagran, says Ansari, was the best option. “They have a cash engine and a deep belief in the newspaper business.”
In early May, the publishing business of MML, in which Ansari and his family owned 51 per cent, was merged with Jagran Prakashan (JPL) in a share swap deal. Mid-Day, (English, Gujarati and on Sunday), Inquilaab (Urdu) and Mid-Day.com are now part of Jagran’s portfolio. After the deal is through, the family will own 2.5 per cent of JPL. So now MML’s growth and Ansari’s financial exit hinge on JPL’s growth.
As usual, Ansari is very excited about the possibilities for Mid-Day and its sister brands with this merger. “When we thought of taking Inquilaab outside, we thought of it as one market at a time. They (JPL) want to take it to six-seven markets,” he says.
I am, however, more interested in the past. Just like Mid-Day, which struggled to grow in spite of having a great brand, many Indian publishers are simply not able to crack the scale thing. Indian newspapers remain small. Is it because there isn’t enough aggression or hunger or is it because capital is really not that easy to come by? Ansari takes a sip of his hot water before answering.
He reckons that most proprietors got their jollies from things other than the newspaper — a Rajya Sabha seat, a house in a good locality and so on. When capital started flowing in, the values that many of them put to their newspaper were so high that investors kept away. Also, in many groups, shareholdings had got complicated over several generations. So, divesting was not so easy.
Now that he is more relaxed and part of a larger company, where would he make his technology bets? “On the mobile and on an expanded screen — it could be the iPad or tablet PC of some kind,” he says.
That seems very far away. We haven’t even seen enough syndication of newspaper content on mobile phones, for instance. With over 601 million users, the cell phone is arguably the largest penetrated device in India after the radio and television.
Ansari thinks that newspapers have missed the syndication bus. “We have allowed telcos to sell their own apps (applications) and also allowed intermediaries such as MyToday to come in,” he says. He thinks that media companies have to take charge of the VAS (value-added-services) game. “They (telcos) can build the highways and take a toll (from media firms).” The creation of the content and apps is best done by media firms.
This is the Ansari I know of— an enthusiastic future-gazer. We have been talking for more than an hour and my coffee is over. I wish him a financially fulfiling exit, while I make mine from his office.
