New Delhi: On 16 April, Paresh Nath struck a deal to buy auto magazine BS Motoring from Business Standard Ltd. The first acquisition of an English title by Delhi Press, which Nath owns and runs, was cause for some surprise among those who aren’t too familiar with the low-profile company, except as publisher of The Caravan, a niche magazine that was revived in 2009 and specializes in long-form journalism.
But the 74-year-old Delhi Press has always been much more than that—it publishes some of the best-known titles in various languages such as women’s magazines Grihshobha, Sarita and Woman’s Era, besides children’s title Champak. All told, the company runs 35 magazines (including the latest acquisition, to be renamed Motoring) from a nondescript building in the crowded Jhandewalan area of New Delhi.
It’s also in talks with Radhakrishnan Nair—the promoter and editor of Man’s World, India’s first home-grown men’s luxury magazine—for a possible buyout. Nair also owns the India franchise for Rolling Stone magazine, besides editing it.
“We’ve had a few meetings, but there is no development yet. After all, we don’t have unlimited resources,” says Nath, editor-in-chief and publisher. Now 64, Nath joined his late father Vishva Nath in the family printing and publishing business in 1970.
Does the Rs.100 crore Delhi Press aim to re-invent itself, with an eye on growth via acquisitions? “We have always re-invented ourselves,” Nath says. “The English media has discovered it now because we are talking of buying English titles.”
In the last two years, Delhi Press has acquired two Kannada magazines and two Hindi magazines that were on the verge of closure.
“The small circulation Kannada magazines (Butti and Manasa) were run by owner-editors. They got a lifeline and it was not tough for us to turn them around given our printing and distribution network,” says Nath.
Similarly, the group now publishes Manohar Kahaniyan and Satya Katha, two popular crime fiction magazines belonging to Mitra Prakashan, an Allahabad-based publishing house. Nath does not elaborate on the arrangement with Mitra Prakashan.
“They are not hugely profitable, but pay for themselves. We want a market flush with magazines,” he says.
His ambition is shared by son Anant Nath, 32, who edits The Caravan, the long-form journal the group revived in 2009.
“Currently, we print 35 magazines. I want to take it to 50,” says Anant Nath, who joined his father in 2005 after studying political science at Columbia University in New York, before which he completed an MBA from the Indian Institute of Management, Lucknow.
The strategy is not about numbers, but having products in different languages and genres.
“For instance, we are now entering the Urdu segment with some of our magazines,” he says, without identifying the titles. The company already publishes Grihshobha and Champak in languages other than Hindi.
The father-son duo have agreed to disagree on occasion and don’t bother hiding this. For instance, the elder Nath wanted Alive (an English magazine in the group’s portfolio) to be revamped and re-launched as a long-form journal rather than The Caravan, a title that had been discontinued in 1988 after having been started in 1940.
Anant Nath was keen to run a publication that would have the elements of his favourite magazines, The New Yorker, The Atlantic and Mother Jones, about which he says, “There’s an art and a science behind their writing.”
He insisted on beginning with a clean slate and decided The Caravan would serve his needs better, launching it as a limited circulation magazine in 2009 and a full-fledged monthly Journal of Politics and Culture in 2010. Meant for an audience Anant Nath describes as the “pop intelligentsia”, the magazine has found acceptance. A rival magazine publisher says, “Caravan has proved that the group is willing to back journalists keen to do good work.”
To be sure, reviving The Caravan went against conventional wisdom. For one, general interest magazines have been hurting in terms of advertising and circulation. Besides this, in a climate where traditional media outlets have been wrestling with the television and digital challenge, starting a print magazine seemed more like an exercise in vanity than a business proposition.
But while the magazine does not make money, Anant Nath is confident of breaking even soon. He backed himself to do that by raising the cover price to Rs.60 in January, an increase of Rs.10.
The elder Nath points out that Delhi Press has a record of going against the grain, citing the launch of Saras Salil in 1995. The Hindi fortnightly magazine priced at Rs.2 was aimed at first-generation literate readers in India’s numerous small towns and villages. Nath’s colleagues weren’t convinced there was a market.
Saras Salil, with its mix of entertainment and news stories, went on to become the largest read magazine title in the Indian Readership Survey (IRS) in the early 2000s. “We used to print 15 lakh copies at its peak,” says Nath.
In the last few years though, circulation has almost halved and its ranking has slipped to No. 5, in stark reflection of the readership, advertising and distribution challenges that the magazine genre faces in India today.
Satyajit Sen, chief executive officer (CEO) of media-buying agency ZenithOptimedia, believes magazines are losing out on advertising and the titles of Delhi Press will be no exception.
“A brand like Grihshobha may still attract a few women’s brands intending to reach the rural heartland, otherwise television has taken away all the advertising serving these markets,” he says.
The advertising that Delhi Press titles get may be due to “media planning inertia and the going can only get tough for them in the future”, he says.
Says Gopinath Menon, CEO at media buying agency Melon Media, “Digital media is also eating into print media advertising. Besides, big advertisers are inclined towards brand experience exercises,” a reference to activities in which the consumer interacts with the brand directly, such as product sampling at a mall.
The older Nath understands that the environment is not favourable to magazines. A part of the problem is newspapers, which have eaten into magazine readership by penetrating deeper into markets through multiple, localized editions at low cover prices, he says. On top of this, dailies make money from government advertising, unlike magazines, he contends.
“They have even cornered the distribution system that delivered magazines earlier,” says Anant Nath.
Today, vendors do not have the bandwidth to distribute magazines as newspapers take up most of their capacity.
“There are magazine consumers in different pockets, but reaching out to them is increasingly difficult,” he says. The last IRS data showed that the average issue readership of eight out of the top 10 magazines in the survey had declined. Saras Salil lost more than 200,000 readers between the second and fourth quarter of IRS 2012.
Some media experts say Delhi Press doesn’t need to worry about dwindling readership or advertising. For a start, it’s a financially conservative group not given to “the extravagance and ambitions of some media owners”, says the rival magazine publisher quoted earlier.
“The promoters are astute investors with feet firmly on the ground,” he adds.
The company values its independence and isn’t looking for investors or to sell shares as it will then become answerable to shareholders and would have to generate profits. “We are mildly profitable now,” Paresh Nath says.
It’s also gone slow on publishing tie-ups with foreign houses. “Such rights did not come cheap and we avoided them,” Nath says.
However, it recently agreed to publish two American children’s titles under a co-branding deal that’s meant as a safeguard in case the partner breaks away to go solo.
Maheshwar Peri, chairman of Pathfinder Publishing and publisher of Outlook, the news magazine of the Rajan Raheja Group, says Delhi Press has built itself on a circulation model, with pricing accounting for a substantial proportion of costs. “It is a good model to have,” he says.
Anant Nath says that of total revenue, 60% comes from advertising and the rest from circulation. He adds that ad revenue was flat in 2011-2012 and grew marginally in the following year. Meanwhile, there has been growth in volume, he says. However, because of higher discounting, value growth has been slower than volume growth, he adds.
Menon of Melon Media believes that Delhi Press continues to have products valuable to advertisers looking to reach the Hindi heartland where cable and satellite penetration is still much lower than, say, in the southern states of Tamil Nadu and Andhra Pradesh.
“Shampoos, hair oils and cooking oils would still look at Delhi Press magazines to reach their target consumer in a specific market,” he says.
The advantage Delhi Press has is that it owns the assets that it operates through such as the offices in 12 cities and two large printing presses in Sahibabad and Faridabad outside Delhi.
Staff costs are on the lower side. Out of a total employee strength of 1,100, editorial accounts for close to 200.
“Most of the content is user generated, that is, the readers are writers in its (local-language) magazines. So the content comes cheap,” says Peri.
Besides this, the Naths are hands-on editors. Paresh Nath edits more than 30 of the titles run by the house.
“Just to lend his name to the 34 magazines (35 with the BS Motoring acquisition), an editor may have cost me Rs.34 lakh a month. I don’t get paid that much,” says Paresh Nath, who believes that media businesses cannot be run by an absentee owner.
As for the future, although Anant Nath’s vision is that of a diversified media group with newspapers and broadcasting, he’s well aware that building such a business is capital intensive. So, for now, he’s focusing on digital media. The Caravan has already gone online and some of its content may be put behind a paywall. Work is on to take Sarita and Champak online as well.
The older Nath doesn’t understand the logic of allowing free access to content online. But, as he puts it, “We will do what is required to be in the game even though I may not personally agree with it.”