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'We would continue to look at different ways to deliver our content.' - Views on News from Equitymaster
 
 
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  • Sep 7, 2001

    'We would continue to look at different ways to deliver our content.'

    Mr. Tarique Ansari joined the family business in 1983 and then graduated to become the Managing Director of MML. In his role as the Managing director since 1990 he has been the driving force behind the company's venture into multiple media plays. An MBA from Notre Dame University, USA, Mr. Ansari plans to diversify MML with a focus on Mumbai, and is keen to offer value added offerings to its advertisers. MML is slowly and steadily reducing its dependence on the print business and venturing into other media plays.

    In an interview with Equitymaster.com, Mr. Tarique Ansari spoke on the achievements so far and challenges ahead for the company.

    EQTM: What is your view on the general advertisement scenario in the country?

    Mr. Ansari: The advertisement market is growing around 7% in the current year as against a 17% growth registered last year. Frankly I don't see a recovery in ad-spend even in the second half of the current year. However, premium end players are more impacted by the slowdown in advertisement market. We are infact emerging as a better low cost option for advertisers to reach out to the masses.

    We are using innovative ways to continue to grow ahead of the market. The USP we are offering to our customer is a bundle of advertisement options. Advertisement from dotcoms contributed around 16% of our ad revenues last year. That entire pie has vanished this year. In that backdrop I think we have grown much better than the overall market.

    EQTM: Midday has recently been revamped. How has the readership and circulation of the same improved post repositioning?

    Mr. Ansari: Before we revamped Midday, we did a fair amount of research. We actually went to our readers to have their views on improvement in Midday. The entire effort was to emphasis what people wanted and what they enjoyed. For example, people loved to read Majjorie Orr, but they complained that the fonts were too small to make interesting reading.

    What has happened is we have benefited on two terms in the entire revamping exercise. One, we were able to push readership in the upper income category of readers. Secondly, we are now writing much bigger contracts with our advertisers. We recently, won a Bajaj Kawasaki launch ad, which we never got before. However, it's too early to comment on readership and circulation figures.

    EQTM: There has been a drop in operating margins in the first quarter of the current year. One of the reasons for the same was a high newsprint price. How are newsprint prices moving now?

    Mr. Ansari: After moving to a high of US $ 660, newsprint prices are now showing a soft trend to US $ 450 per tonne currently. We expect the company to benefit from softening newsprint prices in the coming quarters.

    I think we have good inventory management practices in place. We have an expert two-person team, specifically monitoring newsprint prices. In an inflationary time we normally tend to stock up our inventory levels. We tend to fluctuate our inventory levels in between 30-45 days depending on the newsprint price movements.

    EQTM: What is the status of Gujarati Midday?

    Mr. Ansari: We have seen a very good growth in the Gujarati edition in recent times, both in terms of readership and circulation. We are selling close to 42,000 copies now. We believe that the Gujarati audience is a very important audience in the city of Mumbai. We are also generating good advertising for Gujarati Midday now. I think we will breakeven on Gujarati Midday project this year. In short, the board is quite happy with the progress of Gujarati Midday.

    EQTM: Please comment on your plans to launch Marathi Midday? What would be your pricing strategy considering that there are already tabloids competitively priced as low as Re 1?

    Mr. Ansari: We looked at the option of launching Marathi Midday quite closely. Well, there are three things, which are making us hold back on the project. One, there is still uncertainty over the newsprint prices. Secondly, as you rightly said there is stiff price competition in the Marathi tabloid market, therefore you have to survive on advertisement revenues rather than circulation revenues. Now when the advertisement market is going through a slump the first axe comes on where the advertiser is not sure of the return. Typically, new players are the ones, which are the worst hit as advertisers shy away unless there is concrete data on readership. These things are holding us back. Not that we are not interested in the project but we are looking at other viable options of achieving the same objective. The objective is to reach out to a larger section of the Marathi-speaking populace of Mumbai. Almost 50% of Mumbai speaks Marathi and we do not have any media product in that space. Therefore, our intention to do this continues, but we are evaluating how best to go about it.

    We also have very good acquisition opportunities. We are currently evaluating various options in this area.

    EQTM: Kindly comments on nature of tie-up with BEST in outdoor advertising business. What is your current capacity utilisation in this business?

    Mr. Ansari: In the Outdoor advertising business the company currently has over 1 m sq. foot of outdoor space covering over 35,000 sites and has exclusive rights for advertisements on 2,038 bus shelters, 33,000 electric pole kiosks and certain railway stations. We just got an extension of one year from BSES.

    In the outdoor advertising business, we are trying to move from contract-based to owned asset base structure. As far as current capacity utilisation it is quite low currently at around 10-12%. Still we are making profits. We need to understand one thing, that we have signed bulk contracts with authorities and not all locations are saleable.

    We are looking at expanding our portfolio to include owned assets, which reduces the risks of having short-term contracts with regulatory authorities. This is one area wherein we are looking for acquisitions. We are very conscious of the fact that we need to broaden our portfolio to make this business in a long-term viable proposition.

    Though Mumbai remains our primary focus area we are looking at acquisition opportunities in couple of other cities outside Mumbai also, where our market delivery model can work.

    EQTM: Can you share with us your game plan for entering the radio businesses?

    Mr. Ansari: Personally, I am bullish on the radio business. However, it being a risky venture, we want to put a cap on our investment in radio business. The incremental capital requirements would come from our partners in this business. We are looking forward to receive one important go-ahead from the government. Once we receive that approval, we will kick start our radio business. As far as content is concerned we plan to put up entertainment-based programme on the radio.

    EQTM: What is the status of your city centric portal Chalomumbai.com?

    Mr. Ansari: Chalomumbai.com must be the only Mumbai based portal, which has survived, as we are in a strong position to leverage our existing advertising relationships. Further, the portal being focused on the Mumbai city, our content costs are almost negligible. We are looking at different ways to deliver our services and the Internet is just one part of it.

    We received fantastic response for the SMS service launched with BPL. We had 15,000 registrations for our BPL mobile SMS service. We would continue to look different ways of delivering our content. We are also targeting NRI based portals.

    EQTM: What will be the revenue model for your GIS business?

    Mr. Ansari: GIS play has two parts to it. The first part is to enhance the quality of existing products. It also actually helps us in improving our business processes. For example, we are using our GIS product to map every single sales point of Midday. We know the daily sales of Midday and as well as of our competitors on a real time basis. On a similar basis, we can offer the GIS mapping to our potential outdoor advertising customers. They can look at the Mumbai map and our Kiosk positioning before deciding on the ad spot.

    Further, we are also evaluating opportunities to generate revenue streams from the GIS product. For example, we can offer the digital map of Mumbai to the Municipal Corporation or to the Mumbai Police. Other example could be we can sell the digital map to a pharmaceutical company who wants, to have a ready list of all chemists shops in Mumbai. We can use our existing data, lets say of ‘Good Food Guide' to provide digital information of your neighborhood restaurant.

    EQTM: Comment on your dividend policy?

    Mr. Ansari: I am reluctant to speak on it. It is upon the company's board to decide. I think the company's board would think what is in the best interest of the shareholders. We do have a strong dividend policy.

    You also have to understand here that there are two primary stakeholders in the company viz, promoters & family and another 300 strong workforce who are long-term investors. For these stakeholders, dividend is extremely important, as that is the only source of payout for them.

    EQTM: What does Mr. Tarique like to do when he is not working?

    Mr. Ansari: I spend time with my daughter.

    EQTM: Three personalities that have influenced you the most?

    Mr. Ansari: I would like to believe that it is not personalities but things people do. Different people do different things. I think my grandfather is one of them.

     

     

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