It isn’t easy to think so by reading its commentary and analysis of India’s economy, but The Economist, the sharp-tongued and opinionated news magazine with a penchant for provocative covers, is actually quite bullish on India. At least, in terms of its own fortunes here.
The magazine, which says it sells around 18,000 copies in India, is looking to increase that to 50,000 by March 2010 and says it has lined up an investment of at least $20 million (Rs79.6 crore) for marketing, sales and production.
The Economist publisher for the Asia Pacific region Tim Pinnegar
Earlier this year, it doubled its full-time reporting staff in India to two. Earlier this month, the magazine named Suprio Guha Thakurta, president of Lintas Personal, the direct marketing arm of Lintas, as its associate publisher.
The Economist’s publisher for the Asia Pacific region, Tim Pinnegar spoke to Mint about how India could well become a hub for the magazine’s Asia-Pacific operations soon. Edited excerpts:
You plan to sell 50,000 copies in India by 2010. Isn’t that an extremely ambitious target, given that your current circulation is only around 18,000 copies?
Our average circulation touched 18,000 in November. And we are looking at a circulation of 50,000 copies by March 2010. To achieve this target, we are going to focus on our marketing, production and staffing.
We have lined up investment to support these activities. Next year, we will invest in the excess of $6 million and then, will increase it to $8 million in 2009 and to another $9 million a year after, on marketing, production and staff. We will also work with our local partners such as O&M (Ogilvy & Mather, an advertising agency) to acquire local insights into the Indian market. This should help us bring in more readers into our fold.
What explains this sudden interest in India?
India has always been a big market for us for a long time but, now, the country has really started to do business with the rest of the world.
India and Indians are looking more outward now than ever before. Indian companies are looking to buy companies elsewhere in the world and Indians themselves are travelling for business and holiday. We have invested in India for the last 10-15 years but, now, we will really ramp that up.
You have different partners for marketing, ad sales and distribution in India and you share a substantial portion of your revenues here with these companies. Is your India operation profitable?
We currently print in Singapore and fly copies to Delhi, Bangalore and Mumbai. The distribution is managed by The Times of India and it is quite a costly arrangement.
We are exploring possibilities of printing copies in India but we need to find a partner who would ensure quality and timeliness. The ad sales are done by Business India magazine through Specialty Business Ltd.
Doing advertising on our own is always an option but, at present, there are no such plans. On the syndication front, we have an exclusive deal with the Express Group of Newspapers, but some Indian magazines have also approached us for content sharing.
Yet, we are making money out of our current operations in India but in the next year or so, our cost will be higher than our revenues. We will lose money but will break-even in two years. There are 24 million potential readers in India. This is a huge opportunity for us.
How does India compare with other Asian markets?
In the Asia Pacific region, Australia is our biggest market. We sell around 20,000 copies there. India is second in terms of circulation. Our revenues from circulation in India are in the region of $1 million.
In terms of advertising revenues, however, Japan is the biggest market and India ranks fourth. But, two years ago, India was not even among the top 10 markets in the region.
This year, advertising revenue from India stood at $2.5 million and last year, it was a little less than $1 million. The circulation last year was 14,000 copies, so there has been a growth of 25%. We are quite upbeat about India.
Given that the Indian market is doing phenomenally well, are there any plans to make the country the hub for your Asia-Pacific operations?
As of now, Hong Kong is the hub for Asia-Pac operations and we print from Singapore. It is a wonderfully efficient place to print and has great flights and postal service. By March, some copies will move to Hong Kong for printing as well. In India, if we could find the right printer who can handle the quality and timeliness, then we can talk to the Indian government to allow us domestic advertising. Then, India can actually print for Sri Lanka, Bangladesh and, who knows, a part of the Middle East.
How has The Economist fared in China?
In China, we sell only 5,000 copies. There are government censorships. In China, we need special licence to see our copies but, in India, the challenge is infrastructure and getting our target readers’ database.