A colleague who has recently joined us, wrote a mail to our Vice Chairman, sharing his thoughts on how a free-sheet daily could take advantage of the millions of people who travel in New Delhi’s Metro.
I detail the same below, along with my response. In my reply, I also refer to an earlier blog post Free newspapers : Why free translates to profits!
I will continue to update this as it develops.
My colleague’s mail detailing his idea
I would like to share an idea, “Chhota Times”
I have observed in London that the ‘Evening Standard’ (semi-tabloid style paper), which has a circulation of 2 million/day, is distributed for free at all London tube stations. I have scanned this particular paper from different days (pictures are attached) and the paper is replete with ‘breathless crisis.’ The paper primarily contains UK celebrity gossip, lots of sexual imagery, scandalous political news and sports news.
The paper is a sachet version (reminding me of the concept discussed at the CEO’s presentation) of everything salacious going on in the United Kingdom – and appeared to be very popular with young people riding the train (I noticed this first hand).
The paper is replete with advertising – and their distribution method appears to be very effective. There is a man who stands outside the busiest metro stations for about two hours and hands out papers by the thousands.
Having used the Indian metro, I have observed that lakhs of young Indians (16-35) use the metro. I doubt whether most of them get a chance to read the paper in the morning – even if one assumes that their family subscribes to the paper. Typically, they are not allowed to carry the ‘home-paper’ with them when they are on the move in the metro. The long waiting time on the Delhi Metro makes it ideal for scanning/reading a capsule paper.
This demographic represents the mobile young Indian who is always running late, is therefore rushed and has disposable income (IT sector/call center job profile).
Why can’t we publish a special edition of the TOI, a small sachet type paper of only about 10-12 pages – a capsule of political news; lots of celebrity news/sexual imagery, cricket news/gossip (player/actor profiles etc.) Exclusive cricketer/actor profiles would add great value to the paper – like an injection of Delhi Times without the need for a supplement.
We could call it the ‘Chhota times’ – a younger, cheekier and zestier paper with lots of lifestyle advertising.
In phase 1, the special edition could be distributed free outside metro stations – and eventually we could tie up with FMCG companies wishing to promote sachet versions of their products; shampoo, beauty creams etc – which would be pinned to the ‘Chhota Times.’
The paper could potentially be a hit with the burgeoning college crowd and other younger consumers of news – who have limited time, and want capsule doses of news and celebrity gossip.
The “Chhota Times” would cater to a hitherto untapped audience – and would also not cannibalize existing TOI subscribers (if anything, it would encourage these new readers to shift to the main paper).
My response to his mail is below.
VC forwarded me (and a few others) your mail on Evening Standard / Chotta Times.
I am sharing a mail with my thoughts on your idea (Not so much to critique, as much as to set out the context in which the idea should be evaluated).
Firstly, London Evening Standard (LES hereafter) has a circ of just under 1m / day, not 2m as you suggest. See http://www.abc.org.uk/Certificates/47044320.pdf. They ‘may’ however be having a readership of 2m.
LES is profitable, and yes, it is the free-sheet strategy that made it profitable. See http://www.mediaweek.co.uk/article/1227663/london-evening-standard-profits-double-2013
I had written on the high profitability of London freesheets in one of my blogs where I looked extensively at why free leads to profits. I urge you to read it – it details the economics of the free-sheet model, and when and why it will succeed. see http://bit.ly/16rwlx7 – In that I have specifically covered the case of LES.
There are a few facts about the London / UK newspaper market that is worth factoring in.
1) The cover prices of UK quality papers are at £1.20 – 1.60 Mon-Fri. To truly understand this, let us compare it to a Starbucks Latte, which in London costs £2.10. Thus in London, a newspaper is about 60-80% of the cost of a Starbucks Latte, whereas in India newspapers are in the Rs 4-5 range and a Latte costs Rs 95/- (5% of a latte). So this helps us understand that Newspapers are quite expensive in UK. (Imagine if newspapers in India were priced as high as in UK – then if assume the same 60-80% of Latte framework, it is as if newspapers are priced from Rs 55 to 80/-.) In this context of high-priced dailies in UK, you can understand the value of a free paper. Since in India newspapers are priced very cheap and are ‘virtually free’, the corresponding appeal of a free paper will not be as strong.
2) Wireless signals do not penetrate most of the London Underground. This is very peculiar to London, and hence people cannot browse etc. This may seem very trivial but as I point out in my post, it is a critical factor which explains why freesheets work in certain markets (London) but not in NYC (where wireless signals penetrate). If we look at why people read freesheets, essentially timepass is the key reason. I am stuck in this train for the next 20-25mins and I can’t check FB / twitter, so let me glance through the free newspaper. The job to be done is to while away 20mins and I have hired a newspaper to do that. If there is an alternative (smartphone etc) which can help me do that job (fill that time), then I will use that alternative. Given that most of Delhi underground is connected (and hence people can access FB etc), again the appeal for a free-sheet will be somewhat limited.
3) When we look at media products, typically there is a timing factor to success. Would India Today be as successful if it launched today? It became massive solving a specific need in 1970s India (connecting Mofussil India to Delhi, Mumbai) which really doesnt exist today, but thanks to entrenched relationships with advertisers, force of habit among consumers, it keeps limping on. This is true of online too – Yahoo, AOL are examples of products that solved yesterday’s problems (but not today’s) but since they have a certain specific scale they will continue. Thus Freesheets are also products that solve yesterday’s problems (timepass with no recourse to smartphones), but not necessarily today’s. London is the exception but I think that is because of points #1 and #2. I dont think there are too many markets such as that. Worth checking how recent free-sheet launches have been received by the market.
These are my personal thoughts – they dont represent an organizational perspective or anything. In fact it may be worth understanding perspectives from the Brand and Circulation teams on the idea. I know for certain there have been some past explorations on this.
Very happy to clarify / discuss any point. Let me know!