New Delhi: News Corp., the media and publishing firm owned by Rupert Murdoch, has been a part of India’s digital landscape for close to two years now. The company acquired media and publishing firm VCCircle Network in 2015 and financial advisory firm BigDecisions in 2014. It also has invested over $30 million for a 25% stake in real estate website PropTiger.
In New Delhi to attend a two-day media and marketing conference, Zee Melt 2016 that started on Friday, News Corp. senior vice-president Raju Narisetti, the founding editor of Mint, spoke about the company’s experience in India so far, the growing importance of PropTiger to its India operations, revenue growth at VCCircle and gaps in the country’s new media landscape. Edited excerpts:
It’s been close to two years since News Corp. entered India’s online ecosystem. What has the journey been like?
PropTiger, Big Decisions and VCCircle all happened towards the end of 2014 and beginning of 2015, VCCircle being the last one. So, we haven’t done anything (new) over the last one-and-a-half years other than kind of run those businesses. And PropTiger remains a stake; we don’t own it.
I’m pretty happy with VCCircle for sure. Our revenue is up by 50% in the last one year. Would I like the revenue growth to be 100% year-over-year, of course I would be. We have also invested a lot. VCCircle Network has nearly doubled its staff this past year, primarily in Noida, but also in Mumbai and Bangalore, and across every single business and product line. We have gone from 80 employees to 160 in the post-News Corp. era. There are multiple revenue streams, which is what the attraction of that business was—subscriptions, advertising, events and training.
While they have always had a very solid kind of subscription base, it’s always a challenging thing to grow subscriptions in a rapid way because you are a lone ranger, everyone else is giving it away for free. Events continues to be a strong business, but again, events you tend to ebb and flow with; while the template maybe the same, the effort you put in is 100% new. So as a result, it’s a very bespoke kind of model. You have to be very smart about understanding the changing dynamics of the start-up ecosystem.
For example, this year, VCCircle’s events themes are conserve and grow or perish—which fits in with the broader theme. So it’s relevant then. If I were still running events in the boom years it wouldn’t make sense. So, I think that’s their strength—they tune their events closely to what’s happening. That’s driven by a profound understanding of what’s happening in the sector led by the VCCEdge database which is a big business for us. That gives us a lot of trends.
Events are about 40% of the total revenue but the most successful business is actually the database. Ninety-five percent of our customers renew every year.
How much of News Corp.’s focus in India will be led by news, going forward?
The Indian investment environment for news still puts significant controls on foreign ownership. So absence any change of that, there will be no change from our side because the restrictions are too onerous for us to make a meaningful bet on India. So, the Wall Street Journal could do apps and those kind of things (in India) because those are possible but if you’re talking about an India-centric news product, then no. In the past, from my understanding two people and the India blog was dropped (by WSJ), but we still have 30-something people between the Wall Street Journal and Dow Jones working in India.
What about PropTiger and BigDecisions? Are you happy with their progress?
We are very happy with PropTiger. When we looked at this landscape in June to November of 2014, there were players like Commonfloor, IndiaHomes etc.
IndiaHomes is now gone, Commonfloor is now part of Quickr, a lot of the other companies have receded. Of the pure-play digital companies, the only one really left standing is PropTiger, in a very difficult environment. We are very happy about the bet we made on Dhruv (Agarwal, CEO of PropTiger) and the team; they have been able to manage and adjust the business from the significant downturn. In the last 4-5 months, the business has started to pick up pace. The signs are more positive than they have ever been in the last two years. So we are very bullish on it, if there are opportunities we’d love to help them grow and support them, not just financially but also strategically. In terms of our global expertise, we are one of the largest digital real estate companies, so we can bring a lot to the table than just our cheque books. And all their (other) investors are also stable; nobody is looking to exit. In terms of revenue, if you compare, we are in the top three now after Magicbricks and 99acres.
PropTiger is slowly but surely becoming the pre-eminent digital-only platform for real estate. So from an importance point of view, it’s more important than it was two years ago because the competition is fading.
Big Decisions has always been a bet on saying good and transparent information will figure out the business model. Tools like that are pretty central to, for instance, the Wall Street Journal’s personal finance section or Market Watch. So tools like this exist; it’s just that they are part of a larger content play there and here it’s a standalone. It’s not an easy environment, just as Indians have a hard time paying for content, Indians still haven’t gotten used to paying for advice. So, it remains to be seen how we figure out what to do with that.
Once the tool sets for BigDecisions are ready and once we have accumulated some audience, we’ll see whether it stays standalone or it becomes a vertical on VCCircle to leverage the audience or whether we team up with somebody else as an advisory and an actual product sales thing, because those are coming up.
What’s on the agenda for News Corp in India on the digital front?
No new sectors for sure. No media because of the restrictions like I said earlier. We will continue to invest in VCCircle in terms of helping it grow and anything Dhruv Agarwal, the CEO of PropTiger wants to do, we are totally willing to support him on that front.
Any indicators on overall investments being made in India?
Even now, the investments in India and even any planned investments are still small enough, we don’t even need to acknowledge them in our reporting. That should give you a sense that it’s not a significant number. India will still remain, I don’t want to say a rounding error but an insignificant number for the next five years. It’s a decision made by the News Corp. board and the CEOs, my job is to layout road maps which I have done and execution is left to the ground, we don’t run these companies from there.
What’s your take on the new media start-up ecosystem in the country given that none of the existing digital content platforms make any money?
My fundamental problem with the Indian digital news companies that have started in the last 3-5 years is that not one of them has innovated on the business model. So it’s inevitable that when the VC money dries up or when they all say we are getting into native advertising or creating video content, the weakest of the players will either have to die or be consolidated. There have been half-a-dozen companies that have been funded in the last few years right, all of them I’m sure have done belt tightening in a significant way. Till none of them have a business model other than getting audience from Facebook and we know that story is going to end badly. So the larger question to ask remains: does anybody have a sustainable business model—and I have not heard of a single one.
Scale is not working in digital and it’s proven because you can have scale when someone is sitting at 1.6 billion users which is Facebook. So the scale game is done. Are there niches? Yes. Is there a viable women’s only digital model or a millennials-only digital model, absolutely. But then you have to adjust your cost and ambitions to realize that it’s going to be slow growth and you won’t suddenly become this huge thing. I think that realization will come and consolidation is inevitable.
But unlike in real estate and other sectors where consolidation actually helps because there is a business model, here I’m not even sure if two ad-based digital-only companies coming together, would they be able to answer the sustainability question.
What do you think is the right business model?
Do digital but keep adding revenue streams. There is zero reason why big Indian media companies do not trust their business, journalism and content enough to want to try subscriptions. I don’t mean to say put up a hard paywall. Millennials pay for a lot of things online but you have to create value and a compelling reason for them to pay for, say news for instance.
Maybe there is an e-commerce approach to bundling content with commerce. In the US, there are companies like Refinery29 (an independent fashion and style website), the Skimm (an email news delivery service) that are combining a great shopping experience with a great content experience.
I think there is an unwillingness to try which bothers me about Indian media companies because the writing on the wall is absolutely inevitable that what has happened with advertising and print trends in the US will play out here as well. The principle of infinite supply, low barriers to entry, promiscuous audiences applies to India completely. There is a myth in India that newspapers are doing well but there is no 18-24 year old who subscribes to them. It’s as bad as it is in the West.
Is India ready for paywalls?
I’m glad to see companies like Business Standard start to make experiments in that. They’ve just launched one. You have to have the courage to stick to it. And you have to clearly define what success is, otherwise it’s easy to say it’s not working.