Vineet Jain, MD of the Times Group, is IMPACT Person of the Year, 2013 for his industry-shaping initiatives, driving profitability for his business and setting a benchmark with young and vibrant media products
Vineet Jain, Managing Director of the Times Group, is smiling and affable in his Mumbai office as he discusses the “175-year-young” Times of India and its relevance to Gen Y with us before this interview begins. Jain, earlier Delhi-based, has been spending most of his time in Mumbai for the last six months because “all the action is here”. Talk of Bollywood and lifestyle as the USP for a set of ‘young’ media products, and driving the business aggressively into new media — Internet, Radio and Television – it does help to be in Mumbai, and therefore, Jain is here.
The 47-year-old Jain is the face of India’s largest media conglomerate, but is quick to point out that it is his brother Samir Jain, who has drawn the shape and strategy for the empire. Besides managing the Group’s diverse business interests in areas as far apart as vocational education and real estate, the younger Jain’s achievement has been to create compelling media vehicles that offer an excellent environment for advertisers.
Jain is sharp and precise as he talks of creating disruption in the market, using technology to advantage (such as the Alive app with the flagship TOI newspaper) and does not avoid questions about the business that would perhaps qualify as ‘uncomfortable’. Instead, he gives us extremely detailed answers. He also talks of anticipating change in the industry and being future-ready, only refusing to predict what the Times of India will look like 10 years later!
Here are excerpts from the conversation with Srabana Lahiri:
Q] The Times of India has just turned 175, yet it keeps pace with today’s generation. As key strategist and content architect of the Times Group, what according to you is fundamental to giving the newspaper its young and vibrant image?
I keep telling my colleagues, “Think of the Times as 175 years young, not 175 years old”. We hate status quo. We are always trying to anticipate the next big change. India is a young nation where 52% of the population are 25 years or younger. We were the first to cater to this group, with entertainment and lifestyle supplements such as The Bombay Times, Delhi Times, Bangalore Times, etc. The supplements are an entry point to many of our young readers before they graduate to reading the main newspaper... We don’t like to moralize; we don’t like to talk down. We are proud of our legacy, but we are not stuck in the past. It’s all about the future. It’s about helping the youth realize their full potential. As long as we keep doing that, we will remain a young and vibrant newspaper.
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Q] Talking to Ken Auletta of The New Yorker, you have said, “We are not in the newspaper business, we are in the advertising business... If you are editorially minded, you will make all the wrong decisions.” Do you think advertising carries the Times Group’s media products or content?
I wish to reiterate that we are in the advertising business and not in the business of selling news – and I’ll explain why. If we were in the business of selling news, then the cover price we charge readers should have made us profitable. Fact is, subscription price does not come even close to covering the cost of newsprint. As much as 90% of our revenues comes from advertising; effectively, therefore, our advertisers are cross-subsidizing our readers. Which is why I say advertising is at the core of our business model.
Sustaining growth and remaining profitable has a lot to do with how one understands and defines one’s business. Peter Drucker once asked a bottling plant manager what business they were in and he said, “bottling”. Drucker corrected him by saying “you are in the packaging business”. If a soft drinks manufacturer were to define the business as just “soft drinks”, it would never launch juices, water or snacks. Correctly defining your business helps you remain profitable, grow, diversify and make the right strategic decisions. If I had defined my business as selling news or newspapers I would not have aggressively launched lifestyle and entertainment supplements like Bombay Times and Delhi Times; nor would I have expanded into entertainment channels like Zoom, Romedy Now and Movies Now, or launched Radio Mirchi, or got into out-of-home, or diversified into so many Internet verticals. I don’t blame journalists who criticised my statement for misunderstanding this concept because they are not trained in the language of marketing. Lack of clarity and a narrow definition of “selling news” have led to the closure of newspapers in many countries. The Times Group’s understanding of the business, on the other hand, has allowed it to expand the market for newspapers and reach new, relevant audiences; all other newspaper groups have simply imitated us and we are happy that they too have grown as a result. We have great editors and we have huge respect for them.
However, an editorial-driven CEO will tend to take wrong decisions. He will focus only on increasing the number of pages and news content, not focus on advertising. He will price the newspaper too high for the reader, will feel guilty about promoting his brand aggressively and not cut cost aggressively in terms of pages when the economy takes a downturn or the cost of newsprint skyrockets. Therefore, a newspaper CEO has to be balanced and marketing-driven, and manage all the four Ps of marketing -- product, price, place and promotion.
Q] If the Times of India were to reinvent itself 10 years from now, what would be its shape, size and USP?
Ten years is too long a time frame in the ever-changing media landscape to make predictions. Disruptions and technology are changing the way we consume media and indeed the way we live. Today’s business models may no longer work that well tomorrow. Ten years ago, the Times Group was not present in FM Radio/TV/ OOH. As a group, we evolve constantly. We have our finger on the pulse of tomorrow. Our focus has and will always be the customer.
Q] The focus of our creative agencies is Television. Do you see this affecting advertising in the Print medium?
TV has got incredibly fragmented over the years. And the remote in the viewer’s hands has added to its woes. Smart viewers use devices not only to record programmes, but to also skip ads. The viewer hasn’t spared anyone, not even the leading channels. On the other hand, the newspaper, especially a leading brand such as the TOI, has retained the reader’s attention and continues to engage. The fragmentation in the print medium is negligible.
Q] With consumption of content increasingly on mobile and other screens now, do you think the printed newspaper will be redundant in future?
News consumption will always continue to rise. With growing literacy, the need to consume news will also grow exponentially. With time, the way news is consumed will change. We aim to provide news in whichever way a consumer chooses to have it - on TV, computers, tablets or mobile.
Q] You have successfully led the Times of India to the language newspaper space. With this generation being educated mostly in English, will there be enough readers for the vernacular medium newspaper in future?
It’s true that English is aspirational, and with increasing disposable incomes and evolving lifestyles, particularly in small towns, it will attract newer, affluent consumers. But vernacular is important, especially in these cities and towns; it often meets an intermediate need in the literacy chain, before the transition to English. We want to be present across the value chain, so long as it makes sound business sense.
Q] We have heard of an IPO from the Times Group for some time now. Is it happening anytime soon?
I keep hearing these rumours too! Truth is, we constantly explore and review all options.
Q] The Times Group is going strong with innovative print, television, radio and new media initiatives. Any plans to venture into the B2B segment?
One of our strengths as a group is that we understand consumers. We will hence continue to focus on B2C. However, if opportunities come our way, we are open to exploring these. We always leverage our brand strengths and organizational capabilities.
Q] What are your views on the 10+2 ad cap imbroglio in the television industry? What would be the right way to move forward?
We are opposed to it. As it is, the industry is struggling to make money. Why try and strangulate it further? Let the audience decide. If a channel shows 20 minutes of advertising in an hour, and if viewers don’t like it, they have the freedom to switch to a competing channel at the press of a remote button – at no extra cost. There are hundreds of channels to choose from, no one’s forcing a viewer to stick with any one.
The Telecom Regulatory Authority of India’s proposal will hurt niche channels, particularly news channels. They should not kill the basic financial model of these channels which depend on cheap advertising. In addition, the concept of clock hour is redundant in case of news channels where news is breaking round the clock. The concept of ads per hour was supposed to be an average per day and that is why the government never acted on it for many years. Now suddenly, without fully understanding the industry dynamics and profitability, TRAI is misinterpreting the rule book. I think the main role of a regulator should be to promote the industry through reasonable policies. It should enable and not undermine fair competition.
Q] There is a whole debate about Arnab Goswami being a brand by himself, overpowering Times Now. Is that good or bad for the channel?
Times Now has dominant leadership now for over six years. Arnab Goswami has done an incredible job for Times Now, which has established itself as the ‘go-to-TV-channel’ for breaking news, big news and significant views. He is a courageous journalist and respected by viewers of Times Now. Further, the Times brand is what gives viewers the trust and belief in what he and his able team deliver 24 x7.
Q] Does it worry you that while Times Now, ET Now and Zoom are popular, the Times Group’s television business is yet to gain scale? Have you ever thought about a GEC or a Hindi or regional language channel to build scale for the business?
The GEC market is overheated. Yes, we are open to evaluating opportunities in GEC and regional if it makes business sense.
Q] What will be the focus for your radio operations now that Phase III auctions are imminent?
The radio business is a successful one for the Times Group. We will participate in Phase III, to grow the industry and the brand Radio Mirchi. Radio is the only free-to-air electronic medium. Hence the government should ensure that the infirmities of Phase I and Phase II should be avoided while designing the Phase III auctions. One fails to understand the rationale of the government insisting on high reserve fees for FM Radio spectrum, that too in the face of repeated market failures in the context of reserve fees in the telecom sector.
Q] While competitors have been quick to emulate your business strategies, some ventures such as Medianet and Brand Capital have lent themselves to controversy, as also reports of Times executives driving tough bargains with advertisers to prevent them from advertising with rivals. What is your view of paid news and media ethics, as well as maintaining the proverbial wall between editorial and sales?
Brand Capital helps entrepreneurs and small businesses that don’t have enough cash flows to spend on advertising compete with big companies. It helps businesses grow, India grow and increases competition in the industry. It is almost like a venture capital supporting small businesses with great ideas and products. It helps David take on Goliath. Brand Capital is, simplistically speaking, ad barter for equity. It has nothing to do with editorial – just as normal cash advertisers have nothing to do with editorial. In fact, Brand Capital clients complain that they get more favourable coverage in other newspapers than in ours! We have lost hundreds of crores of rupees in advertising from clients because we have resisted their attempts to influence our editorial policy. These are big corporate houses and government departments and I won’t name them. These very organizations fund other newspapers in return for favourable coverage. The Chinese wall between advertising and editorial is strongest in our group and we are proud of it. Because the Times is highly profitable and advertising driven, we don’t allow any advertiser to influence our edit coverage. On the other hand, smaller newspapers which are financially vulnerable tend to buckle under pressure from such large advertisers.
As for Medianet, advertorials have been an established practice among the most respected newspapers, magazines and TV channels globally. We only emulated global best practices and made it better. In television, it is called advertiser funded programming (AFP) which is the life-blood of the best channels in India and abroad. In TV serials and movies, it is called product placements. Medianet is actually the most honest form of advertorial because we have created separate special supplements of entertainment and lifestyle for it, unlike other media who have mixed it in the main product seamlessly. In fact, advertorials/Medianet strengthen the Chinese wall between advertising and editorial and make it transparent instead of the advertising department putting pressure on editorial to write puff pieces on clients or clients using PR agencies to plant stories through journalists. We are truly proud of our ethical practices and can claim that they are among the best in the world.
With regard to paid news, let’s not paint the entire media with the same brush. Paid news is predominantly news articles sponsored by political parties. The politicians need to clean up their act before they blame the media. If political news was promoted as an advertisement or had the disclaimer of an advertorial, it would have been as per established global practice. In reality, the government must realize that Doordarshan can be deemed as paid news. Also, there are many media owners/editors who are either affiliated or belong to certain political parties. Will the government cancel their licence? The ownership of media by political parties is a bigger problem than beating up two or three newspapers over some lapses of the past, which they have corrected.
Q] Expansion, innovation and differentiation have been your forte... What’s next on your agenda for the Times Group? What new frontiers are you looking at?
There are several opportunities yet to be tapped by us within media and entertainment, and our first priority would be to focus on these. But given our presence in media, we have started looking at sectors such as Vocational Education, for example our initiative TimesPro. On the Internet side, we are looking at acquisitions instead of starting ground up.
Q] What are the challenges you see in the functioning of the Times Group?
While it may appear that our Group is focused on a single sector – media – we actually comprise some very different businesses, each of which need very different skillsets. We’ve hence structured ourselves as a set of stand-alone, specialist organizations, each focused on its own line of business. At the same time, with increasing convergence in technology as well as media consumption, we will progressively need to unlock synergies between the different parts of the organization. A key challenge for our Group will be to balance these two conflicting forces: the need for specialization and the need for synergy.
Q] Do you think that the current political and media ecosystem favour the growth of a free and fair media?
No it does not. For instance the proposed ad cap on TV channels, new rules on appointment of directors in broadcast companies, the continuing bar against the private sector entering news FM, periodic efforts to intimidate social media, controlling and influencing the salary structure of journalists through the wage board, new rules and acts being rewritten to punish and control media, etc, indicate directly or indirectly, that there seem to be attempts to restrict freedom of speech and freedom of expression. Certainly, the media has a duty to be responsible. But a few black sheep shouldn’t be used as an excuse to clamp down on everyone.
The foundation of any democracy relies heavily on an independent and pluralistic media. The government’s role should be limited to encouraging self regulation by the industry. Governments, by nature, always find it a challenge to resolve issues satisfactorily, and hence have a desire to control the media which candidly covers performance (or non-performance!) of the government of the day.
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