Ashish Bagga, CEO, Living Media India Ltd
The NRS and the IRS are the two syndicated studies that India follows. Publishers also carry out their own research, which is custom-made to their requirements. What we also intend to do now as a collective body such as AIM (Association of Indian Magazines), is to power our own research from a syndicated angle only to address the magazine space. We will have stuff like consumer insights that cut across all magazines, specific advertising categories that suit magazines more than other media forms and the like.
If Living Media, popularly known as the India Today Group, is a reigning leader in the magazine publishing space, Ashish Bagga can be credited for some of the path-breaking initiatives that the group has taken in recent times. As CEO of the organisation, a position previously held by Aroon Purie himself, the Group's Founder and Chairman, Bagga has a clear view on the way forward for the organisation and the steps he has to take for the accelerated growth that India Today has marked for itself.
Bagga began his career with India Today in the early 80s as a management trainee and then left the group as Marketing Manager in 1991. Following this, he has been with print majors like Hindustan Times and Business Standard before returning to the group in 2000 and has only been on a rise since.
In this interview with exchange4media's Noor Fathima Warsia, Bagga speaks on the various initiatives of the Group thus far and what lies ahead. Q. Researchers and media observers continually quote that specialist titles are the future of magazines. What is your view on this?
Q. Any other domains that you are exploring?
Q. What are the other areas that you identify as growth drivers for India Today?
Q. How have your responsibilities changed with this and how has the experience been so far?
I think it was a planned move as far as Mr Purie was concerned. He had started adding responsibilities to my portfolio in quick succession. Every three or four months, there would be an addition to my role and it only got richer in terms of the portfolio of responsibility and towards the end, before I actually took over as CEO, I was managing most of the businesses of the company, barring one or two SBUs, which I also became accountable for after I was appointed CEO. So it was not a big bang new responsibility that just landed on my lap out of the blue.
I'm now accountable to the board and I review the business formally on growth, market share, profits, return on investment, etc. - on all parameters that a CEO should be accountable for.
Q. What drove the decision to come back to India Today?
Q. The NRS 2006 results have shown significant drop in magazine readership for this round, and so has the IRS. What is your take on this drop?
This is a constant debate because we believe that when there is growth in circulation of magazines, when there is a phenomenal growth in the number of magazines, which we know for sure is the case, there should be no reason why readership shouldn't grow. There could be a correction in terms of readers per copy, but over time even this should get addressed. There is no reason why readership surveys shouldn't address magazines differently from newspapers in their methodology as we believe the skews are arising out of this bundling.
Whether you look at frequency, number of times picked up, value, the RPC, levels of penetration, width and depth, magazines are very different from newspapers, which drill deep down specific geographies. For example, a TOI would be selling say 6 lakh copies daily in the city of Mumbai, but 'India Today' does 70,000 copies a week and that is the pattern in every market where you have a strong local newspaper. Therefore, it becomes important to ensure that your sampling and measurement (projections) reflect this appropriately. Likewise, there are similar swings in the rural markets, given the skews that exist for language newspapers and magazines.
It is showing more now because the methodology is getting sharper like adding the rural section in the NRS some years back or reducing the age threshold to12+ from 15+. Our internal research shows that readership is also growing. These are issues that are now getting some serious attention. The NRS has bought this logic presented by magazine representatives and will hopefully treat magazines separately in the next survey. The Association of Indian Magazines is also seized with this serious concern and we hope in time to come, this issue, which is a strong bone of contention, would get resolved amicably.
Q. To begin with, a very obvious question, what does being the CEO of India Today Group mean to you?
Q. What is stopping you from launching a morning daily?
Q. You also had a stint at NIIT in-between too...
Q. You have been quoted as saying that magazine research in India isn't adequate. What do you view as the problem and how do you expect this to change?
The NRS and the IRS are the two syndicated studies that India follows. Publishers also carry out their own research, which is custom-made to their requirements. What we also intend to do now as a collective body such as AIM (Association of Indian Magazines), is to power our own research from a syndicated angle only to address the magazine space. We will have stuff like consumer insights that cut across all magazines, specific advertising categories that suit magazines more than other media forms and the like. The objective is to address and highlight the enormous value that magazines have to offer to advertisers.
For instance, it has been demonstrated in the US recently that magazines come out tops when looking at what drives consumers to purchase. TV increased purchase intent by 3 per cent, online increased it by 2 per cent, but magazine ads increased purchase intent by 5 per cent. That finding was consistently strong across categories as well, especially for the automotive category. This demonstrates the critical role played by magazines in a media plan. It was also found that the most consistent performer was magazines. It’s the safest bet to make if you want to achieve results. This is the kind of research that we intend to undertake.
Q. You had once said, 'You need to be fiercely competitive and yet remain good friends with your colleagues'. Has this been a guiding principle of your life?
You must appreciate the context in which I had made the statement. It was in a speech at my business school to a fresh batch of MBA students. Yes, it is a philosophy that I continue to practice. I am fiercely competitive, but at the same time I ensure that I send the right signals to my colleagues within my company and the industry. I am there for them when they need me without my getting into a conflicting situation. This philosophy has stood me in good stead and I would strongly recommend it.
However, balancing this is not easy. I think I'm probably more empathetic than others and I tend to address situations from the other person's perspective, which reduces conflict. The other philosophy I practice is that knowledge isn't a single person's property – knowledge is meant to be shared, it's only when you share knowledge that you gain more knowledge. So I don't keep anything very close to my heart. Given these two attributes, I think I've been pretty successful this far.
Q. You chose to enroll in academic courses very recently, not really a common or easy practice. What was the driving force behind it?
I believe that learning is something that shouldn't stop ever. You learn when you are in seminars, in workshops or when you go back to school. I did a senior executive programme recently and I thought it was very enriching and satisfying. I came back recharged and refreshed from a knowledge standpoint. As we continue to do what we are doing, day in and day out, whilst we are learning new things all the time, we really don't pull back and make an assessment of our own updated competencies, of new ways of doing things or learning from people across different domains and skill sets. It is only when you actually go out and touch base with academics, does it unlock a lot of potent latent energy. Managing both courses and work is tough, but I delegate and empower helluva lot and that helps me in managing my time more effectively. Next year, I will attempt and undertake a doctoral programme.
Q. On another note, what is marketing's role for magazines?
Q. We have learnt that you wanted to be a photographer. So, which is your first love - photography or publishing?
Photography was my first choice. I nearly turned professional way back in 1979, but it didn't work out. My parents were very keen that I do an MBA. I had just completed my graduation and was also the secretary for my college photo club. I had a good profitable hobby running for me even during my three years of graduation and I thought I would get into industrial or fashion photography. I had done work for advertising agencies during my college days and my work was really appreciated by a lot of people. It was something I really enjoyed doing and thought I should make it my profession.
However, I was probably too young in those days to address a business venture all by myself and given the family pressure to appropriately qualify myself, I decided to do an MBA, keeping the final career option open with photography continuing to be my first choice. But whilst doing my MBA, I decided that the corporate world was equally fascinating and the rest, as they say, is history. But the passion for photography continues. I wish I had more time on my hands to do some creative work which I used to be known for.
Q. And why the publishing side of the business?
Q. Being the leader in the domain, what are your plans on this count?
Q. Why isn't the India Today Group on the ABC?
That's another issue which stems from the same belief that magazines should be treated separately from newspapers, and unfortunately the guidelines that apply for net paid sales for newspapers are also applied to magazines and we believe that shouldn't be the case. A lot of magazines are subscription based. To bring in subscribers, magazine publishers offer free delivery for which they have to invest in and since subscribers pay upfront, they even have to give them discounts with a view to providing subscribers enough in return to commit to a year's subscription or for that matter, even a five-year subscription.
Publishers, including ourselves, also offer premiums (gifts) on long term subscription orders. The ABC believes that all this needs to be adjusted for copies to qualify in net paid sales. We represented to the ABC that subscriptions are an integral business model for magazines and one can't assign a cost to this and take it away from their assessable value. We made a strong pitch to them and they relaxed the norms only marginally, which wasn't adequate enough. So we decided to opt out despite the fact that we've been long standing members of the ABC. It's very unfortunate that we had to take this extreme step and our stand was vindicated when other mainstream magazine publishers followed suit. It is also a separate matter to observe that even large newspaper brands like HT and TOI are in and out of the ABC quite often. I guess the time has come for ABC to address a more pragmatic approach to addressing net paid sales, especially for magazines.
Q. The group is also showing interest in areas like retail and music, which aren't directly linked to publishing. What is the rationale here?
Actually music emerged out of a consumer U&A research study that we conducted with our magazine subscribers in the late eighties to understand and assess what their areas of interest were. And music showed up pretty strongly. There was a dearth of good quality music in those days. Digital recordings and thematic compilations were not common so we decided to address quality recordings in the Indian classical music space and we promoted it aggressively through direct mail and direct response advertising using our in-house media assets. We achieved instant success and there has been no looking back ever since.
We continue to believe it is a good fit for our publishing business given the synergies of direct marketing and distribution in which we are very strong. Even if you look at international trends, books and music go pretty well together. That was how we got into music and now our music label is only getting bigger. We are getting into more genres and more popular forms of music and have become a pretty well known music label in the music business. We have also recently embarked on the distribution of foreign titles across different genres as an independent business stream.
Then we have the India Today Book Club, the only one of its kind in India. We generate a lot of business from the state capitals and other smaller cities where there isn't much penetration of book stores.
Our retail venture branded MediaMart is the latest, with new forms of mass commuting like the metro in Kolkata and Delhi offering a great opportunity. We recently introduced vending machines at airports and shopping malls and we found that the exposure levels were of a very high order. Consumers were using them quite effectively. Retailing seemed to be the logical move and the next step to get closer to the consumer.
Sure, it's not as common as one would expect it to be, but if you look at the US, the UK and other markets, there are stores of these kinds in airports and train stations. In India, the market isn't quite organised so far, but we believe that it will develop very quickly; given the leapfrogging we have seen in other domains and the experience has been good so far. We have around 20 stores allotted to us in the Delhi Metro, and we are looking at other markets such as Kolkata and Mumbai. The business entails exposure not only for all our brands but we also stock and display other brands of magazines, books and even mobile phones and charge cards. It's a sizeable business on its own and is treated as a stand-alone profit centre.
Q. Looking at some industry issues, the digital platform has proved to be beneficial for international titles - CondeNet being an example. Why is it that India has no such examples to show?
We were a little early in our digital strategy. As you know, we were the first ones to launch a free access standalone e-paper - Newspapertoday.com - which had more than 1,400 updates every day. It was an interactive multimedia site with video and other dynamic media, largely content pulled out of all our media assets and the captive editorial resource that we had put in place only for this venture. We found that it was expensive to run such a large-scale hyperactive project with very little money coming in and we decided to make it a "pay" model, which unfortunately didn't work. Users on the Net expected to get all information and services free. We eventually had to shut it down and follow the less aggressive website model for our publishing brands.
That was in the past, but going forward we have some great plans for the digital space, both for the Internet and for addressing the mobile opportunity.
Q. Where would we see you three years down the line?
Q. Can any change be expected on that front?
Q. But isn't that a problem if the Group's own brands like 'India Today' suffers to some extent?
Q. How have these extensions helped the Group so far?
These aren't mere extensions. What we've done is that given our strengths, we have mapped the market on all possible areas for expansion. We have strengths in terms of mass consumer marketing, direct selling, and our enormous reach and distribution.
We reach consumers though retailers, but earlier we did not bridge that last mile. Retail is one effective way to connect with the consumer without conflicting with our current portfolio. It was a good fit with what we are doing and this gives us insights into what over-the-counter consumers are about, their buying preferences and so on. Going forward these stores will sell mobile phones, DVDs, prepaid cards, beverages and even stationery - whatever the consumer on the move wants. The thought did start from the brands in the publishing business, but going forward we plan to address an augmented offering.
Q. Which of the two models is more beneficial?
There is more accountability when you acquire a licensed brand because you have to address the issue of localisation of editorial content and marketing. It requires deeper insights into the consumer and advertiser.
However, in a relatively simpler and a straight marketing arrangement, it is more of a relationship with the partner at an arm's length as one is not involved in the editorial formulation of the brand. Both licensing and marketing partnerships have their own place. We run a very successful marketing partnership model for 'Time' magazine, wherein they benefit from our enormous distribution and ad sales strength and on the basis of which we also were given 'Fortune' some years back. We have won several awards for sales and distribution for 'Time' and 'Fortune' successively for the Asian region.
When it comes to licensing, we treat all our licensed brands as our own brands. We give them all that is required for them to be successful and compete aggressively in the market. So much so that around the time we took over the 'Reader's Digest' brand, 'India Today' (English) was the top selling magazine brand followed by 'Reader's Digest'. We powered strong marketing programmes for 'Reader's Digest', as we do for 'India Today' and the rest of the brands in the Group, and 'Reader's Digest' actually overtook 'India Today' in circulation in a short span of nine months of our taking it over from the Tatas. That is the conviction we bring to the table, of providing all our licensed partners the very best the group offers.
Q. What were the challenges in the last six months that weren't part of your role earlier?
Q. Can we expect anything else on similar lines soon?
Q. Did you feel in your second innings that you would be given this designation some day?
Q. Were there any fears that came true with the new role?
The biggest fear I had was that it was a big responsibility and whether I would be able to fulfill it because the person who preceded me in terms of fulfilling this role was none other than Mr Purie himself, who is quite an institution and my role model. To that extent, I was a trifle worried but I think it's been over six months now and all that's behind me.
Things have now fallen into a rhythm and the experience has been great this far. There's been a lot of empowerment. It's not easy to hand over the reigns so very quickly and flexibly. I think Mr Purie has done it wonderfully well and I hope I have lived up to his expectations.
Q. The India Today Group launched its Bangla edition after a considerable gap. Why was there such a gap in launching a new edition, what were you waiting for?
Q. International titles seem to be a very active part of the group. What really is the role that they play in strengthening India Today?
