We expect Bihar to become EBIDTA break-even in 3-4 years: DB Corp

The New Year has been keeping the media moguls quite busy! In our opening edition of Adgully Trends 2014 earlier this month, we had spoken to various print media experts who shared with us their forecast for the New Year. A major aspect of their strategy remained 'growth'. Increasing their user-base / subscribers or expanding their reach is an essential part of the growth strategy. Following this mantra, Dainik Bhaskar Corp. is all set to enter a new market, Bihar. With a strong presence in almost all the Hindi-speaking states, entering Bihar seemed to be the next obvious step for the print giant.

Adgully caught up with an official from Dainik Bhaskar Group to know the reason for a Bihar launch, the pros and cons they foresee in the new market, the challenges that lay ahead and more.

DB Group comes with a long legacy behind in central India. It’s only in the last few years that DB Corp has entered markets like Rajasthan, Punjab, Himachal Pradesh etc. Now with Bihar in the circuit, speaking about the strategy with this launch, the official said, "We wish to present as a newspaper group, in different markets with rapid growth, readership penetration gap and Bihar launch makes right noise as we are able to present media planners and advertisers, combo of Bihar and Jharkhand market”.

With this launch, they cover almost all of the Hindi heartland, except UP. Was family disparity the reason for the non-inclusion of the UP? The official stated, "We look for market with higher GDP growth coupled with faster rising per capita income and consumption and markets important for media planners and media buyers. Fortunately, Bihar got preference for all right reasons. Family disparity never comes in way for UP launch, as we can launch the paper with ay different name. However, UP’s current GDP growth, per capita income and consumption, does not attract us, so for a UP launch its has to be a financially strong launch with great Return on Investment(ROI), which has been important and preferred criteria in terms of selection of any state and we preferred Bihar".

According the official, higher cover price of existing newspapers of Bihar and resultant low readership penetration, coupled with high average GDP growth and fast growing per capita income and consumption were the main attraction points for DB Corp to enter the state.

In terms of marketing and promotion of the new launch; they have local marketing team already in place for launch of Patna edition, which is also being captured and carried well by all leading business channels as well as trade media. Besides, their survey model provides great insight for the local ad-market, to know, well in advance about the daily’s launch.

Reason behind entering Bihar:

Bihar was high newsprint cover price market at around Rs. 4.50/- per day cover price, which was perhaps, highest for any state in India and we wanted to provide a better quality newspaper at a better price to the readers of Patna-Bihar. Also, Bihar’s readership penetration is around 19% which is very low, considering same for other markets of ours, like, MP, Rajasthan, Gujarat, Haryana and Punjab. Further, Patna readership penetration was only around 40% which was quite low, considering equal size cities penetration like, Jaipur, Indore and Cochi etc.

Bihar is rapidly growing market, in terms of GDP, per capita income and consumption. Patna is 5th fastest growing city of India and 21st fastest of Globe and we wanted to be partner in the growth.

Opportunities:

Our newspaper is known for its differential content, as per readers’ requirement and strictly providing exact. After doing a door to door survey, before every launch and ask readers about their liking, disliking and requirements from newspapers and reach back to them again with prototype of newspaper, exactly as per majority requirement of readers and stick to the aspirations and expectations of readers from beginning. The exclusive tie ups with Harvard Business Review (HBR), with Time magazine and 17 international magazines of repute helps us in giving exclusive and relevant content with higher localised content. 

Expectations with new launch:

We have been analyzing Bihar market since quite some time, which is of very strategic importance to us. We expect Patna-Bihar to add great value to us as a benefit of scale, with presence in 14 important and higher GDP growth state presences with fastest growing per capita income and consumption. With Bihar launch, we would further increase our lead over next player, as the largest newspaper group of India. We expect Bihar to become EBIDTA break-even in next 3-4 years time.