Mumbai: ACK Media, the owner of brands such as Amar Chitra Katha, Tinkle and Karadi Tales, is evaluating the prospect of buying out India Book House Pvt. Ltd (IBH), one of the oldest and largest distribution networks for books and other published material, in a deal that could create an integrated publishing and distribution company, one of the largest of its type in India.
“Yes, we are in the process of evaluating (it) so I would not like to make any detailed comment. However, we are going to be very aggressive about establishing an end-to-end content creation and distribution capability. The company is also going to focus on expanding its direct reach through online and subscriptions,” said Samir Patil, founder and chief executive of ACK Media, or Amar Chitra Katha Pvt. Ltd. Deepak Mirchandani, managing director and chief executive of IBH, declined to comment on the matter.
Much like consumer product companies or media conglomerates that tend to control their distribution channels, ACK Media is looking to consolidate at every level.
“Content maybe king but distribution is god,” says R. Sriram, co-founder, Next Practice Retail, a strategic consultancy firm for consumer and retail businesses. “It is a forward integration for ACK Media into the distribution business. This deal would enable them to have far more control over the distribution of their content, they could better leverage their margins to their benefit and also have the ability to aggregate similar content as a way for growth,” he said.
The acquisition of IBH is likely to work to ACK Media’s advantage for several other reasons, say experts.
“ACK Media has a lot of plans and IBH’s distribution network could be an asset,” says Jehil Thakkar, executive director, media and entertainment practice, KPMG India.
Established in 1952 to import and distribute books and magazines in India, IBH has 10 offices in major metros across India. It has a distribution network that includes over 2500 stores and 15,000 vendors. ACK Media sells about 3.5 million comic books a year, published in English and many regional languages, to readers in India and overseas.
The takeover would also help ACK Media distribute a wider range of consumer products through a pan-India network. The company recently announced plans to launch 75 home videos this year, along with other consumer products such as toys, merchandise and stationary. It is said to be keen on building three aspects of its business, which include consumer products, television and entertainment offerings, and educational products.
“IBH has significant distribution capabilities in publishing and may also have other titles or properties that ACK may be interested in. Beyond this, if ACK Media has a plan to leverage its characters and brands beyond publishing to include home videos, DVDs and music, or even set up their own stores, then getting into those stores (book store chains, etc.) becomes very important,” said Thakkar.
The company will also work with publishers to pick more profitable titles, as well as focus more on children’s titles, a segment expected to grow at 40% year on year over the next 4-5 years, by industry estimates.
The challenge, however, would be for the new firm to come across as a good distribution platform for other brands as well. IBH currently distributes brands such as National Geographic, Financial Times, Vogue, GQ, Rolling Stone, Harvard Business Review etc., as well as titles for publishers such as HarperCollins Publishers Inc. and Penguin. “Other content developers must not think of it as favouring only ACK Media brands,” says Sriram.