Pawan Agarwal, Deputy Managing Director of the Dainik Bhaskar Group, talks to us about the Group’s business, outlining the agenda for Digital, Radio and Print
Fifty kilometres away from New Delhi, the team behind DB Digital gathered recently at a resort near Damdama Lake in Sohna village, Gurugram. The idea was not just to review the financial year that had just ended, but also encourage employees to perform better. Among other things, the workforce was told to strive towards “being the only one” by none other than the dynamic founder of Republic TV, Arnab Goswami.
Shortly after, Gyan Gupta, CEO at DB Digital, took centre-stage. As he flipped through the slides of a PowerPoint presentation, he highlighted the sustained growth in the number of unique visitors and page-views of the various websites of DB Digital. He announced that DB Digital had succeeded in increasing its topline to Rs 55 crore during the financial year 2016-17. “The revenue growth has been modest,” admitted Gupta, but added that a growth of 21% in terms of revenue was more than what was aimed for by the organization. The share of Digital in the overall revenues of DB Corp. Limited, however, too is still small.
Meanwhile, the unaudited consolidated results of the company recorded total revenues of Rs 1,740.89 crore during the first three quarters of FY 17. More than 90% of the revenues came from DB’s Print operations, which raked in Rs 1,594.50 crore. Being a legacy Print player, the company’s Print operations are miles ahead of its other businesses in the Radio, Digital, and events space. In fact, revenues from Print amounted to almost 40 times the Digital revenues. In an era where many seem to be obsessed with predicting the death of the Print industry, the question is, whether such Print-powered growth is sustainable.
‘PRINT WILL CONTINUE TO GROW’
Pawan Agarwal, the youngest son of Dainik Bhaskar Chairman, the late Ramesh Chandra Agarwal, is confident about the survival of the Print news industry in India. Drawing comparisons with newspapers in the West, he points out that newspapers in our country are “home delivered” and “heavily local” in nature. “I think there is a clear divide between how the West is progressing on Print and how the Indian subcontinent is progressing on Print. Print in India still has a long play compared to the West,” says Agarwal, who is Deputy Managing Director of the Dainik Bhaskar Group.
Admitting that the share of the non-Print business of the Group will increase over time and their growth rate will be much faster as they have a smaller base, he refused to view it as a sign of Print’s decline. On the contrary, he said Print is here to stay, since the circulation and readership of newspapers are moving in the northward direction. He also feels that advertisers are willing to put their money in newspapers to reach out to their desired target audience.
Despite the country-wide slowdown owing to demonetization, the Dainik Bhaskar Group has clearly identified its key areas of growth in future. Over the years, starting from its bastion of Madhya Pradesh, the newspaper group has spread to 14 States including Rajasthan, Punjab, Jharkhand, and Bihar. It publishes seven newspapers with 62 editions. “Our States still don’t have 100% reach. Not everybody reads a newspaper yet. I think in the next phase, i.e., three to five years, you would see us growing our readership and circulation in the current States,” Pawan Agarwal asserts. Arguing that Dainik Bhaskar does not operate in any saturated market, he claims that Indian States are largely rural, where only 20-25% of urbanization has taken place. With the increase in urbanization, there is a belief that people’s aspirations will also increase, leading to heightened interest in buying homes, cars and even newspapers. “In DB Corp markets, there is a large population which is becoming affluent and that will drive the next stage of growth for Bhaskar,” Agarwal adds.
DIGITAL IS NOT ABOUT BOTTOMLINE
Though DB Corp has grand plans for Digital, the bottomline of its Internet business is far from being in the green zone. Until December 31, 2016, the digital business was sitting at the top of losses worth Rs 17.7 crore. But the management remains unfazed. Shouldering the responsibility of overseeing the Digital and Radio business, Agarwal states that the “digital business is not about bottomline” since the country’s Internet penetration is in the range of only 25-30%. Moreover, the cost of data and speed of connectivity are major irritants in the way of forming a stickier user base with dedicated reading habits.
“We are not looking at driving profitability. That’s not our core. Our core is how do we build a user base and how do we build stickiness,” Agarwal says. Stressing that they will remain in investment phase for the next couple of years, he explains that it is the Group’s conviction that profitability will follow once they have a loyal audience.
Like most legacy newspaper organizations, Dainik Bhaskar is also not ready to experiment with a paywall. Among Indian newspapers, Business Standard has taken the rare step of pushing its exclusive content behind a paywall, something yet to be replicated by any other major domestic news organization. Agreeing that Indian publishers will eventually have a paywall, Agarwal says, “I don’t think publishers in India will be able to put up a paywall just by saying that I want to block my content. It has to be readers’ willingness to pay for content.” Otherwise, he mentions, “users wouldn’t even be aware of the kind of content you offer”.
Commenting on Western publishers who have already enacted a paywall, he suggests that they did so after having built valuable content which Indian publishers need to imitate. With a 300-member strong team meant to exclusively create Digital content, the Dainik Bhaskar Group is trying to give valuable content to readers across categories such as food, fitness, health and Bollywood, among others. According to Agarwal, these subjects often go under-reported in newspapers due to lack of space, but not in the case of Digital. As a result, DB Digital claims 80% of its Digital content as original, independent of Print.
One of the big challenges before publishers in the digital world is to withstand the dominance of social networks and search engines. Besides cornering the bulk of advertising revenues on the Internet, social networks like Facebook tightly command online traffic. The news websites get their audience mostly through social media. At Dainik Bhaskar, the discovery of news content via social is viewed as an asset rather than a liability. More than 50% of DB Digital’s traffic comes from territories where it does not have a Print presence. For Agarwal, it signifies the positive effect of social in expanding the footprint of DB beyond its core markets.
“As they discover us through social, the moment they build liking for the content that we are creating, they start to move to our platform directly. We are happy with the fact that there is social which is helping us connect with that remaining 50% audience which is not known to our brand,” Agarwal says, underlining the relationship between direct traffic and social traffic. Being a votary of the Digital medium, Agarwal terms it an “open platform” where digital journalism start-ups can provide competition to legacy media such as Dainik Bhaskar. In the English news space, the emergence of start-ups like Scroll and The Wire served as a lesson for the mainstream media. As per Agarwal, such start-ups only encourage his company to innovate further. But the challenge before start-ups would be to match the scalability of legacy media.
Though the digital news space in the country has risen rapidly, the regulatory mechanism meant to govern it is still missing. There is a lack of clarity whether digital news comes under the purview of Ministry of Information & Broadcasting or Ministry of Electronics & Information Technology. Add to that the problem of trolling which has led to serious rape threats against women journalists and silencing of newsmen like Ravish Kumar. In Agarwal’s opinion, such things are in the nature of the medium. Taking the example of a sabzi mandi (vegetable market), he mentions that it is impossible to control the clutter and noise over there. “As a country, I think we will learn to express ourselves better. The country will have to evolve,” he says. Going further, he cautions against erecting a regulatory mechanism to govern Digital, saying, “Publishers can be controlled but how do you control what people write.”
‘WE’LL REMAIN A LOCAL PLAYER IN RADIO’
Being a multimedia player, presence in Radio is another highlight of Dainik Bhaskar’s vast media empire. Through 94.3 MY FM, the group reaches out to 28 cities spread across seven States. In FY 17, Bhaskar made close to Rs 100 crore from its Radio business over a period of nine months between April-December 2016. “Radio business is local. Our USP is local. We dominate in all the cities and stations that we are in. We are for the local cities. We are not for the national,” admits Agarwal. This strategy is unlikely to change in the future either.
For now, MY FM’s spotlight is on Tier II and Tier III cities, and customizing radio stations in terms of language and programming for every single market is a big challenge. The other concern is from advertisers. “How do we also develop the local advertisers, who are not present in Print? A lot of our advertisers are not even advertising in Print. They all came from categories which are not Print-friendly,” Agarwal adds. But these clients love the medium, as per Agarwal’s admission, due to its viability and the costs involved. While news on private radio is currently disallowed with the Government citing national security concerns, the Dainik Bhaskar Group is optimistic about getting a go-ahead since several discussions are under way with the authorities. “It is only a matter of time before the Government makes that decision; news will definitely give a further boost to the medium’s ability to connect with people,” Agarwal says. Recently, Dainik Bhaskar’s Print competitor Rajasthan Patrika forayed into Television through Patrika TV. But Bhaskar doesn’t have any such plans. “We don’t have any plans for TV. We don’t believe in analogue TV,” he states. As the usage of smartphones goes up, Agarwal surmises that people will spend less time sitting in front of a Television set. Also, their viewership will remain largely restricted to entertainment channels and soaps. Citing the example of the US, Agarwal claims that even the consumption of entertainment shows had moved towards smartphones with the rise of products like Netflix. He predicts that this is a trend India will witness after 5-6 years. “The whole Television video experience should come from mobile phones and that’s what we are working on,” he proclaims. Alongside his brothers Sudhir Agarwal and Girish Agarwal, the youngest Agarwal is the custodian of a media kingdom with extremely diverse interests. Although media critics frown upon cross-media ownership as a path towards monopolization, he does not see it as much of a problem. He says “not many people” have ownership of “Television, newspaper as well as other stations” and even if they did, the real question was whether they were misusing them. Commending the steps taken by the Government to ensure the market’s pluralism, he rues the fact that one can’t own “more than 15% of the radio stations” in India.
With great power comes great responsibility. Being a leading media player, Dainik Bhaskar recognizes that. During the recent Assembly elections, Dainik Jagran illegally published an exit poll in the middle of the elections projecting a victory for Bharatiya Janata Party. The online editor of the daily, named Shekhar Tripathi, was subsequently arrested. Agarwal does not have much to say about the episode, except for noting that “they were warned by the Election Commission”. According to Agarwal, he did offer his take on the perception that Hindi language media tends to be right wing. “I can’t talk about Hindi media. I can talk about Bhaskar. Bhaskar takes the reader’s side. Our job is to give the right information and right picture to our readers and not take a stand,” he declares. As the country’s Print news industry continues to attract a significant portion of ad spends, the clout of publishers like Dainik Bhaskar does not appear to be diminishing anytime soon. Looking beyond Print, they have ventured into businesses such as Radio and Digital. But there is a need to scale-up these ventures by a huge margin and drive profitability to achieve overall success.
