Rupert Murdoch in India: Eyes the Times of India group
Rupert Murdoch in India: Eyes the Times of India group
Wednesday - Jul 30, 2008
Kishore Sharma - Televisionpoint.com | New Delhi Just imagine the following scenarios. General Motors or maybe Ford Motors draw up strategic plans to acquire Toyota in Japan. The big daddy of retail Wal-Mart pulls off a stunning coup and takes over Metro in Germany. And AT&T stuns everyone by announcing to the world at large that it has acquired a strategic stake in Vodafone.
Breathtakingly unbelievable, isn't it? You might say the scenarios are laughably unrealistic too. How can struggling or ailing American multinationals buy out formidable players that completely dominate their home turfs in Japan, Germany and UK respectively?
Then, how about this one? Rupert Murdoch decides to forge a strategic partnership with the Times of India (TOI) group with the long run ambition of taking over India's biggest, most aggressive, most predatory, and most successful media group.
An file picture of Rupert Murdoch
Yet, believe it or not, the Times of India group led by the inscrutable Sameer Jain, and News Corp. led by Rupert Murdoch are currently negotiating to see how the two can forge a strategic partnership-or even a downright de facto takeover of The Times of India group.
Murdoch is on his sixth visit to India presently. After his two-day stay in New Delhi, he will come to Mumbai on August 01, 2008. He is scheduled to meet prime minister Manmohan Singh and Congress president Sonia Gandhi on Thursday.
Without a shadow of doubt, there is a buzz in the market about what Sameer Jain and Rupert Murdoch are planning together and what impact it will have not just on the Indian media scene, but on the country as a whole.
Well known media critic Sevanthi Ninan too has a similar view. "I am not aware about this deal. However I don't think that the Jain's would be interested in selling out their stake. They have been looking for bringing in foreign investment through equity," she says.
Part of the reason why some industry insiders are skeptical about the possibility of Sameer Jain selling out to Rupert Murdoch are the scenarios that we invoked at the beginning of this story. Just as Toyota dominates the auto industry in Japan, Vodafone dominates the telecom market in UK and Metro dominates the organised retail space in Germany; The Times of India group straddles the media sector in India like a colossus.
Forget how exaggerated some of the claims made by the Times of India group are and consider the following. The English language newspaper The Times of India is the largest selling English newspaper in the world with a claimed circulation of about 2.4 million copies. The Economic Times is claimed to be the second largest selling business newspaper in the world. The group's Hindi daily Navbharat Times lags behind leaders like Dainik Bhaskar and Dainik Jagran, but is still rated as one of the top Hindi dailies of the country.
To pre-empt the newspaper DNA, the group has launched the Mumbai Mirror tabloid in Mumbai and some other major cities. The tabloid is distributed free with The Times of India. In collaboration with the Hindustan Times, it has launched the tabloid Metro Now to counter the launch of Mail Today, a joint venture between UK's Daily Mail and India Today group. The Times of India has also tied up with BBC for the magazines in its stable, the best selling Femina and Filmfare.
That's just the print part of the media business that the group operates in. In television, it has launched Times Now, the 24 hour English news channel that has been consistently getting the highest rating points over the last six months. It has been running a lifestyle cum music cum Bollywood channel Zoom for quite a while. A Hindi news channel is in the pipeline. In FM radio, the brand Radio Mirchi has not only been the pioneer in the segment but is also well ahead (in terms of revenues) of Big 92.7 FM. In the internet space, the group is a leader with Indiatimes.com emerging as the most visited portal in the country. It has launched Timesjobs.com that is giving sleepless nights to pioneer naukri.com. Most importantly, the group has offered free ads to various corporate entities in return for picking up a stake in their companies.
Through this route, the Times of India group has become a strategic investor in more than 75 companies across the country. Even if half a dozen of these companies turn out to be world beaters in the long run, Times is assured of a multi-billion dollar revenue stream every year.
No wonder Murdoch is eyeing the group. Through ruthlessly predatory tactics, Murdoch has emerged over the last four decades as the biggest media tycoon of the world. Yet, the entrepreneur knows that he is far from dominating the media markets in the two biggest emerging markets of the world - China and India.
Murdoch has a presence in both the countries through the Star Network. But Murdoch and his media empires become pale shadows of their versions in Australia, UK and USA, when it comes to China and India. Murdoch knows that he doesn't have much time left in terms of age and probably wants to leave a legacy for his son James that will endure till the end of the 21st century.
And compared to China, Murdoch senses a bigger opportunity in India because it is a fractious and noisy democracy with a vibrant media sector that is growing at an explosive pace. Also remember, Murdoch has been known to emerge as a shadowy player in the politics of a country where he invests aggressively. He was an ardent fan of Ronald Reagan and Margaret Thatcher, both die hard conservatives in America and Britain respectively. He then supported Bill Clinton and Tony Blair. In fact, to please the Chinese regime, Murdoch also killed the publication of a book written by the British Governor of Hong Kong Chris Patten that was highly critical of China and its human rights abuses.
No wonder, there is outrage and dismay amongst many sections of India at the prospect of Murdoch muscling his way into the largest and most powerful media house of the country. His Star Network is already the second largest unlisted media house in India after The TOI group, which is also unlisted. A marriage between the two will take them so far ahead of rivals in terms of reach and revenues that the combined entity might emerge as the Indian version of Microsoft and Intel in the sense that it will literally dictate terms to customers.
Says Naresh Gupta, executive vice-president, planning, Publicis India, "In short term there will be no impact of the deal on the media industry. However, in long run it will give Murdoch a strong property in print media. In fact he may also launch a couple of his international brands in print media in India."
However, a majority of analysts and experts are of the opinion that even a marriage of convenience between the Murdoch and Jain empires will not lead to a monopoly status that is enjoyed by the likes of Intel and Microsoft in their domains.
"I don't think the deal can monopolise the media in India. There are modern 200 print houses in India and regional media is too strong in the country. So the question of monopoly is completely ruled out," says Amita Sarkar, head, media and entertainment Division, FICCI.
Rohit Gupta, president, network sales, Multiscreen Media, has a similar view. "I don't think that this deal will monopolise the Indian media industry. Newspapers like Dainik Jagran and Dainik Bhaskar have a much larger reach than TOI. In fact Manorma and other regional print media is much stronger in the country than TOI as per the reach is concerned."
Besides, you cannot write off players like Subhash Chandra of Zee Entertainment and Kalanidhi Maran of Sun TV, who have created formidable home grown media empires that have proved to be durable.
The reality is also that mainstream media shapes & influences public discourse & debates over social, political and economic issues that affect the present & the future of the nation. It is mainstream newspapers, radio stations, TV channels and websites that set the agenda for a modern democratic society.
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