Dainik Bhaskar Group entering Jammu, Bihar, Jharkhand

Girish Agarwal, director, DB Corp Ltd, in a tete-a-tete with DNA, speaks about the media company’s expansion plans and launch of the group’s flagship Hindi daily Dainik Bhaskar in new markets. Excerpts:
 
You are in the process of expanding presence of Dainik Bhaskar in Jammu, Bihar and Jharkhand. What is the strategy?
The Dainik Bhaskar Group currently has a presence in around 11 states including Madhya Pradesh, Maharashtra, Gujarat, Chhattisgarh, Rajasthan, Haryana, Chandigarh, Himachal Pradesh and Punjab. While our current markets continue to grow well, we keep looking to tap opportunities in new markets. The decision to enter Jammu, Bihar and Jharkhand is the outcome of this strategy. Look at Bihar and Jharkhand, particularly in the last 5-6 years.

These states have come a long way in terms of growth. In fact, Bihar’s gross domestic product (GDP) has improved significantly and it currently has the second largest GDP growth after Gujarat. The average GDP growth in Bihar in the period of 2005-09 has been 11%, second only to GDP growth in Gujarat, against national GDP growth of 8.49%. Similarly, Jharkhand witnessed a GDP growth of 8.45% over the same period and is much better when compared with Rajasthan, Punjab, Haryana and Uttar Pradesh, so to speak.

What is driving growth in these new geographies?
In my opinion, it’s the political stability for the last five years in these states.  Secondly, the states have witnessed industrial growth and the law and order situation has improved significantly. All these factors have led to increase in consumption in these markets, which was not the case earlier. While on the one side the new markets are very promising, there is huge scope from a readership point of view. Of the overall population of 9 crore and 3 crore in Bihar and Jharkhand, respectively, the literacy percentage is around 50-59% between the two.

The interesting part is that of the number of people who can read, there is sizeable population that is not reading. For instance, in Bihar, of the overall population that can read, only 18% is reading and a city like Patna has only 40% of the reading population is reading newspapers. So, as a media company, what I am looking at is bridging that huge gap and adding value which is what we did when we entered the Mumbai market in 2005.

The newspaper business is largely dependent on advertising to sustain itself. How do you see these states from that perspective?
That’s true. Advertising certainly supports the business and we have analysed in our initial market study that the advertiser is very keen on having visibility in these geographies. In fact, the increase in consumption is making them seriously explore different options and target new audience for their products and services.

Competition must be vying for the same advertising pie too?
Yes. In fact between Bihar and Jharkhand there are 3-4 leading newspapers with a combined circulation of over 13.5 lakh. The striking feature of this market is that the newspapers have a cover price of Rs 4 for a copy, which makes it a fairly expensive proposition for masses to consume the medium. Thus, newspapers, so to speak, are currently consumed by a niche audience which is primarily why the market penetration is so low there. This is where we see an opportunity to introduce a medium at a reasonably affordable price that would also promise very good quality content that is not available with the competition. 

When do you plan to roll out in these markets?
The plan is to launch gradually by entering the new markets one by one. So I’ll probably launch in market ‘A’ to start with and gradually cover the potential cities in that market and replicate the process when moving in to market ‘B’. So it certainly will not happen on day one, and will be done over a period of 12-14 months. So between the three geographies outlined earlier, we will certainly launch in two markets before Diwali this year. Entry in the third market will be done six months hence from the earlier forays.

Could you share details about circulation or the number of editions you will launch with?
I am not at liberty to announce the details, as these will be announced closer to the launch. What I’d like to say though, is that if the No 1 in those markets is at 7 lakh copies, I’ll aim to come closer to that number as fast as I can. In terms of editions, when I launch in a particular market I’ll have to launch as many as possible in order to open up the market. So if a market requires 2-3-4 editions, so be it.