Like its peer Jagran Prakashan, HT Media too has a diversified business model. While its newspaper business continues to be the mainstay, in order to face the increasing competition and to diversify its revenues, the company has moved into newer verticals. In this article, we shall give an insight into the company’s diversified business model.
The company is following a three- step strategy, namely to increase geographical presence of the existing brands, to enter new segments and to scale up presence into new businesses. As we have seen in the previous articles, the company has increased its presence in different states in the English and Hindi newspaper categories. Also, it has entered into the business newspaper segment and has started a tabloid with Times of India.
A look at the new verticals...
To diversify from its exposure to print revenues alone, HTML ventured into the Internet and radio businesses. The move is to offer its existing clients a complete package in advertising, catering to local needs and hence have synergies with current operations.
Internet: Globally, with print media losing its share to the Internet, most of the newspaper companies in India have also used Internet to complement their models. In order to leverage its strong content database, HTML launched its web properties hindustantimes.com, hindustan.com and htcricket.com. It has also launched livemint.com to support its business daily, Mint. It has formed an Internet company called Firefly e-Ventures with plans to enter into the classifieds, matrimonials, travel and real estate verticals on its web property. It also wants to tap the value added services market like gaming, contests, alerts and short codes. The company recently acquired a social networking site Desimartini.com through its subsidiary in an attempt to enter one of the fastest growing segments in the Indian Internet space. Desimartini.com has a decent user base of 0.3 m people with more than 2.5 m page views a month. Though much details on the deal is not available, the company’s aim is to expand the Internet business and even demerge it once it acquires scale.
Radio: Valued at Rs 6.2 bn in 2007, the radio segment is expected to grow at a CAGR of 24% over the next 5 years. Seeing this huge opportunity, HT Media through its subsidiary HTMECL (HT Music and Entertainment Ltd) has launched the radio channel Fever 104 in Mumbai, Delhi and Bangalore under a technical collaboration with Virgin Radio. HTML owns 75% of this venture and its parent Hindustan Times owns the remaining 25%. At the start of the current year it launched its fourth FM station in Kolkata, completing the launch of all the stations that the company has a license for. The company has lined up further expansion plans for its radio operations in Chennai and Hyderabad after the third phase of radio licensing. Its strategy is to be a player in the top 10 cities in India going forward. The company, however, has to incur substantial establishment and advertising costs, which is affecting its margins. Currently, while in the investment phase, the management expects this business to breakeven in the next couple of quarters.
The company has been successful in transforming itself from just a newspaper company to a company with comprehensive media offerings. Its expansion into other segments gives an impetus to its strategy of bundling ad space, thereby accelerating its ability to garner advertising revenues. Though this would affect its margins in the near future and the execution risk remains, over a longer term it would benefit the company.
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