A few decades back, nobody would have imagined that the Rs 5 billion Jagran Prakashan, headqaureted in the north Indian industrial town of Kanpur, would straddle a sizeable part of the Indian media industry, which is picking up pace in terms of turnover, employment and influence. Though media scrips still account for a miniscule portion of the overall stock market, with recent moves towards liberalization being envisaged by the government, it is expected that many more companies would hit the IPO trail as also attract foreign investment.

In such a scenario, the Jagran group has shown enterprise having expanded not only in the print business, but also foraying into the electronic medium via a news channel, Channel 7, earlier 2005. Realising that a print-to-TV model would not only enhance the company’s value, but also help it to take on competition more effectively, the Jagran group embarked upon a thought-out plan, much to the dismay of some critics who had thought that ambitions of becoming a broadcaster was just a pipe dream.

In this interview with Indiantelevision.com at the Noida (on the outskirts of Delhi) studio of Channel 7, Jagran TV Pvt Ltd’s director Siddhartha Gupta holds forth on the television foray and future plans.

Excerpts:

Wouldn’t it have been better if the Jagran group had stuck to its core area of print instead of foraying into the tricky business of TV broadcasting?
I don’t think so. If that logic is extended, then media companies around the world would not have presence in a variety of media and entertainment related businesses. Some of the top media companies in India and elsewhere too are diversified and have presence in various categories. In a way, it brings about a synergy. However, I agree with you that broadcasting is indeed a tricky business, but then every business has an element of risk involved.

What I meant was that at a time when the group is expanding its print business in a big way, would it have been more prudent not to spread resources thin? Especially when the TV space is cluttered?
I reiterate, every business has an element of risk. Before we ventured out into the world of television, we did study the area well. And, the conclusion that we drew was that there was still a place for a player who can keep his head on his shoulders instead of going overboard with the venture. (Having said this, Gupta points out part of the vast studio on the ground floor, indicating that the construction work is functional without being extravagant.)

As far as resources are concerned, the Jagran group has been in the media business long enough to understand that resources should not be spread thin. That’s why, the TV venture has been separated from the print and treated as an independent wing of the group. This way we de-risk the business up to an extent.

Was one of the reasons for the TV foray done keeping in mind that the print infrastructure and manpower could be put to good use?
I wouldn’t agree with you fully. As I said earlier, there could be some synergy in terms of information collection, but the business of TV and print are carried out in different settings, demanding different treatment. When there is so much of difference, using print infrastructure does not arise. Yes, at times, we might be using a print medium journalist from the group for a TV story too, but in essence both the businesses are carried separately from separate places with separate goals.

How much is the initial investment that has been made in the TV venture?
We have invested close to Rs 700 million in the initial phase. It may not be a very big amount if we take the example of some of our neighbours (that include some big names in news broadcasting and TV programming). What we have done is invest the money prudently. If technology and equipment demanded heavy investment, it has been done. We haven’t gone overboard.

A few months down the take off line, do you feel additional funds are needed as a sizeable chunk of your budgeted investment must be directed towards distribution, marketing and promotional activities?
At the moment, I don’t think additional funds would be needed. Not till we complete at least one year of operation. However, I do agree that distribution and some other related activities have taken up lot of our money and time too.

So, you agree that distribution has been posing a problem in an over-crowded news space?
Of course we have been facing problems relating to distribution of the channel. And, smaller the place, the steeper the demands have been from cable operators.

But carriage fee is a truth in today’s India and it makes me wonder at times as to why the government isn’t doing something about it.

How would you say the channel is faring considering distribution problems are being faced?
We are still in our early days. I can tweak available figures to say that we are doing well, but I would refrain from doing so. What we know is that people are watching us after the initial sampling and that’s encouraging news for the whole Channel 7 team. We need to improve our distribution and our present focus is on that. We also know that Mumbai is pulling the channel down (in terms of overall reach because of acute distribution problems there). Still, I am confident that we’ll be able to surmount the problem and rock Mumbai as we are rocking in several other parts of the country.

(Initial TAM data of April-May indicated that in certain pockets of the country in certain day parts, Channel 7 has been ahead of the likes of Zee Business and Awaaz)

Is Jagran TV looking at introducing other channels too to have a bouquet of its own like others?
We have no plans to come out with another channel. We need to get a fix on this one properly before we think of another channel. Nothing’s coming from the group apart from Channel 7 till we achieve the target.

What’s the first year target?
The first year target is to achieve between 15-20 per cent of the market share of the Hindi news segment. And, I think it’s achievable. I feel elated when I get the feedback on the channel. But it also tells us to be careful of the market forces and distribution issues.

Channel 7 is such a young outfit, but desertions have already started happening. Any comments?
We cannot help it. In this industry where manpower is limited up to an extent, we’ll have to live with the fact that the best of professionals will join Jagran TV and some of them will leave the organization too.

However, as a company, we have attempted to have some of the best HR policies and expect that our employees too appreciate the fact. If somebody has to leave, then he/she will go. But there shouldn’t be ad hocism on the part of employees.

Moreover, I feel that poaching on other’s turf is not going to do good to anybody. At the end of the day, it pinches the promoters’ (pocket).

Like other news broadcasters, is Jagran TV also looking at an initial public offering (IPO) to give an exit route to existing investors and raise money from the public for the next round of investment for expansion?
IPO is one of the exit routes for existing investors, I agree, and it’s an issue that has been discussed internally. There could be an IPO between 12 and 24 months, but not before that. We are very sure of one thing: Channel 7 needs to be established firmly as one of the leading players before we take the company to the public.

(Jagran TV Pvt. Ltd has got permission from the Indian government to offload about 25.7 per cent stake to Mauritius-based fund New Vernon Bharat Ltd. The size of the deal is approximately Rs 300 million. According to Indian government guidelines, news channels uplinking from this country cannot offload more than 26 per cent equity stake to foreign companies or investors.)