Saturday, December 09, 2006

Dangers of a one-cent newspaper

Artificial USPs have always fascinated me; more so because, often, they work.

In what was then a hypercompetitive market for shaving creams, Palmolive introduced a new, improved version with “SGL 4”. Whatever it was, it sounded good, and hirsute Indians queued up to buy it.

Mankichand of gutkha fame got into an overcrowded bottled water business. They knew what they were doing when their product had a chemistry-defying “300% more Oxygen” that justified the name Oxyrich.

Stories such as these, despite their successes, beg the question: can’t one find true USPs?

And I ask this question again and again when one sees new media products being rolled out. In category after category, the newcomer is a clone of the incumbent. And, more often than not, the category explodes, and the biggest gainer is the incumbent, the biggest losers the newcomers.

So we have a DNA with massive discounts on the card rate, and a Times of India which has seen two rate hikes since DNA and Hindustan Times, Mumbai were launched.

And we have a Dainik Bhaskar which has dropped the price of their Jaipur edition to 50 paise. That’s their USP, give the damn thing away.

And the Jagran group has announced the imminent launch of a youth directed tabloid in Hindi. Interesting positioning and a ridiculous name: i-Next. I’m not being bigoted, but their genetics will prevent most of their prospective readers from pronouncing the name correctly. And why, for heaven’s sake, a clearly anglicized name for a clearly vernacular paper? That’s an injection of artificial cool and patently unnecessary. Cool can be cool in the vernacular as well, and the English name is almost a patronizing thought.

On the surface, one gets the impression that all these entrepreneurs and media owners want to do is to launch another paper in what is, clearly, an exploding market. No great thought on the space available for another product, on the reason for its existence. No well thought-through business plans. No great differentiator. Artificial positioning and artificial USPs rule.

And that amazes me. In no category other than media do we see risk taking on these lines. The thought seems to be, if your pockets are deep enough, you’ll succeed in time to come.

And losses don’t worry the investors too much. Because there’s another benefit, both tangible and intangible, which comes as baggage to the media product: influence.

And then, one understands the risk differently. Money is lost on the one hand, but influence and opinion creation gained on the other.

Which is why a state like Uttar Pradesh has more than a few thousand registered newspapers. Most of which make losses in the business of publishing, and make handsome gains in the business of influence peddling and power broking.

And as long as this business sense prevails, India will continue to sell content at the most ridiculous of prices – our newspapers are cheaper than those in fourth world countries.

And, therefore, the costs and profits of media products will continue to come from the advertiser. And the advertiser, which includes the government and the public sector, will continue to influence the newspaper.

50 paise for a copy of a newspaper! That’s not helping freedom of speech.

It’s endangering it.


Dr Ashok Dhamija said...

It is no secret that the input cost of the newspaper as well as the profits come mainly from the advertising revenue. The subscription cost of the newspaper is just a nominal revenue source. Why should the consumer worry if the newspapers are becoming cheaper? Yes, there is a serious cause of worry for the society as a whole because cheap newspapers mean a lot of forest cover being lost!

On the other hand, do we not get a lot of free things on the Internet, like including a blog site. All this is also financed by advertising, ultimately.

Perhaps, sooner or later, the "paper" newspaper will have to give way to the "Internet" or "online" newspaper. That too, free (but with advertisements)!

Saurabh said...

Let's scratch the surface.
The frequency of actual news and the occurence of a daily newspaper are mismatched.
Obviously, news are created at times- sometimes by PR, sometimes by politicians
what has to come out everyday, has to discuss something that 'happens'
Fixed number of pages don't help
Better analysis, pages as many as needed, will help
But it will also create a lot of chaos for operations guys