Households are beginning to dispense with their subscriptions for daily newspapers. What with new updated by every minute by the Internet, why look for the news the next morning in the print medium. This trend in the US and other developed countries is slowly sinking in India too.
Simultaneously, costs of advertising have reached humongous proportions: There is also the anachronism of a wage board for newspaper employees when wage boards do not cover most other larger sectors.
The recent experience of South’s market leader The Hindu exemplifies this change. For 125 years The Hindu enjoyed a monopoly status. It had its say in terms of advertisement rates or region to be covered. Staff preferred lifetime employment. The family kept pace with technology eg. The Hindu set up its own fleet of aircraft and systems to deliver copies in the southern cities in quick time. G Kasturi visited Drupa, the biennial printing machinery fair in Germany and opted for the latest printing machines. The paper was the first to switch to electronic typesetting. It was also the first to junk in one go dozens of the old linotype machines, to take to facsimile transfer centralizing pre-press preparations and de-centralising printing near consumption centres.
All these worked. That is till the unwritten understanding among newspaper owners to focus on their respective geographies stood. Aggressive Samir Jain of Times of India (TOI) broke this agreement and vigorously set on a course to conquer new territories. The much larger size of TOI, its deeper pockets and more effective strategies led to The Hindu facing its first major threat in 125 years.
Added to this was the internecine quarrel among the family members that further sapped its energies. Over four generations, the family had grown with much larger number of claimants for a share in the total pie. Packing the board of Kasturi & Sons Ltd with a dozen working directors, with hefty salaries and perks, is understandably not sustainable. N Ram invited McKinsey & Co to look ahead. Implementation of some of the recommendations in part by inducting functional CEOs and editors only added to the dissensions in the family and threatened the authority and position of Ram as chairman.
And so it did away with the professional team headed by Siddarth Varadarajan as Editor and the CEO and other senior executives and brought back the family to functional positions. This again did not improve matters. Last year the company entrusted the task of implementing the McKinsey recommendations to the author of the report Rajiv C Lochan, who was made Managing Director & CEO. A major recommendation of inducting well-known business leaders from outside is also implemented. With Vinitha Bali, (formerly of Brittania Industries) and S Mahalingam (formerly of TCS) inducted into the Board.
With N Ravi retiring as the Editor-in-Chief, Malini to Parthasarathy, another member of the family, now heads the editorial team. Even while inducting Suhasini Haider and Veeraraghav, formerly from CNN IBN, strengthened the editorial team, there has also been an exodus of senior journalists.
The depressed state of economy over the last four years has also been leading to dents in ad revenue. The cover-jacket advertisements modeled on Times of India though appears to be visibly effective, but has led to depressed rates. There has been, likewise, a much larger flow of Central government advertisements through DAVP but at low rates. The relations with the state government have been strained resulting in poor flow of once a torrent of advertisements.
Thanks to senior staff recruited from TOI in top positions, several more of Samir Jain’s practices have been adopted; like the contract system for employment of senior staff.
KSL came out with a VRS for staff over 40, for those with a minimum of ten years experience. Lower top line and the bottom line in red are causes for concern. Lochan and his team also face resistance to change from the established senior staff, who have been with the company for decades. The familiar problem of the vast difference between offering consultancy and implementing the recommendations should stare him in the face .