At Baird’s CMC, we love to keep abreast of all media-related developments because our communications strategies often involve working closely with journalists. So it was interesting to come across a wonderful article in the New Yorker by Ken Auletta (“Citizens Jain”, Oct 8 2012).
Auletta focuses on the Times of India, which with a daily circulation of 4.3 million, has the largest circulation of any English-language newspaper in the world. The newspaper is run by Samir and Vineet Jain, who own B.C.C.L., a family-owned business that also runs the second most widely-read English-language business publication in the world (The Economic Times, which follows behind the Wall Street Journal) along with a host of other newspapers, magazines, tv channels, a Bollywood news and lifestyle show, a radio network, Internet sites, and outdoor billboards.
Auletta mentions that the company generates annual revenues of over a billion dollars, “a paltry sum compared with an organization like News Corp., which produces thirty-three billion”, but he adds that the pre-tax profit margin of B.C.C.L.’s newspapers is a “remarkable twenty-five to thirty percent.
The company commands half of all English-language print advertising, half of English-language-newspaper readers, a third of TV news-channel ads, and almost a quarter of all radio and Web ads. It is the largest outdoor advertising company in India. The company has no debt.” Compare this with the following statistic: according to the Newspaper Association of America, the past five years have seen US newspaper advertising revenues decreasing by 52 percent to 24 billion dollars, with net-profit margins at five percent.
The fact that less than 10 percent of the Indian population has access to the Internet and so digital competition isn’t as fierce in India as in other countries explains some of this success. But the reason Indian newspapers are thriving as compared to newspapers in other countries and the amazing success of Indian newspapers, especially the Times of India, is a “product of their content and the unorthodox philosophy behind it”, says Auletta.
He goes on to explain that the Jain brothers are not mired in traditional ideas of journalism, rather they run their publications like shrewd businessmen, mingling content and advertising freely as well as running “up-beat” coverage that they believe their readers are interested in:
“‘Both of us think outside the box,’ Vineet told me on a recent afternoon. ‘We don’t play by the traditional way of doing business.’ His company’s dominance can be explained simply, he added, though its methods are not taught in most Western journalism schools. ‘We are not in the newspaper business, we are in the advertising business,’ he said. With newspapers sold so cheaply and generating little circulation revenue, newspapers depend more on ad revenue, he said, and, ‘if ninety percent of your revenues come from advertising, you’re in the advertising business’… ‘Earlier, the newspapers were written more for the intellectual elites,’ he said. ‘It was too serious at some point. It was not relevant to our readers.’”
An example of this philosophy is the Times of India’s eight-page supplement section that hosts many colourful photos of Bollywood starlets and stars, international celebrities, fancy parties, and cricket heroes. The whole section is an advertorial and the PR agents of these celebrities pay for the coverage (even though the content on the page is written by Times of India staff).
Jain, according to Auletta, got the idea for the section several years ago, after reading an interview with Richard Branson, the owner of the Virgin Group, in which Branson remarked that the reason he parachutes from airplanes and performs similar stunts is that, with this free publicity, he saves his company millions in advertising dollars annually. Auletta quotes Jain, “ ‘When I read it, I said ‘Oh my God, eureka—I’m stupid!… Why these guys are not advertising in my paper is because I’m giving them free P.R.’”
In the article, Jain went on to explain that if a Bollywood studio or car company sponsors a fashion show, his paper will cover it but without giving the name of the studio or company unless they’ve paid him for it. “They are promoting a brand… pay me for it.”
Not everybody is quite so thrilled by this philosophy. Auletta quotes Darryl D’Monte, a Cambridge-educated editor and writer who once served in a senior editorial capacity at the Times:
“‘The Times has corrupted the entire face of Indian journalism, including television,’ he told me, nothing that there is less international news, less coverage of the arts, less reporting on the many dire threats that India faces. Editors are preoccupied with what readers think they want to know about and with what advertisers want. ‘It’s like a cancer that has spread,’ D’Monte said. ‘It is the most serious threat to journalism not only in this country but in the entire developing world.’”
Auletta has also ignored another face of Indian journalism. The country has some of the most relentlessly intellectual magazines in the world. Seminar, for example, gives every issue over to an in-depth report on just one subject with contributions written by eminent Indian and international experts. The Hindu (India’s third-largest circulation English-language daily) easily matches the New York Times for the seriousness with which it takes itself and its reporting. More than one of the world’s great “grey lady” newspapers it also carries some of the most in-depth and most accurate science reporting that you will find anywhere.
We’d love to hear what you think. Do you think the Jain brothers are onto something—is this the new way forward for journalism, or do you think it is the corruption of journalism? Or, is it neither—is it just a natural evolution that requires a new paradigm to survive? And what role do you feel that P.R. or communications strategy should or can play, if at all, in this new media landscape?