Competition can make strange bedfellows. The Times of India and Hindustan Times, bitter rivals in the national capital, have joined hands in Mumbai to take on DNA, the daily expected to be launched by the Essel Group-Dainik Bhaskar combine, in July.
The collaboration between two of the country's biggest media empires -- Bennett, Coleman and Co Ltd (publishers of The Times of India) and Hindustan Times Ltd -- will be in the areas of advertising, printing and human resources (the last in the form of a no-poaching pact).
HT has just begun advertising its planned debut in Mumbai in The Times of India and Radio Mirchi, Bennett's FM radio channel. The first full-page colour ad of HT, saying "Let there be light in Mumbai" appeared in The Times of India on Friday.
In return, HT will share its newly set up printing facilities at Airoli in Navi Mumbai with Bennett, which faces a short-term printing capacity constraint and is unable to increase supply in the face of the new competition.
Senior Times of India executives said using HT's surplus printing facility made sense as all newspapers in the group had a very large circulation base.
"It's a barter deal: HT will not pay for the space it is buying in The Times of India, and will offer its printing facility to the group," he said.
The third aspect of the collaboration is a no-poaching agreement -- a rare move in the media industry. Sources in the two companies said this was important in view of the huge churn in the industry, leading to skyrocketing salary bills and flight of manpower -- both journalists as well as marketing and circulation executives.
Senior executives of both Times of India and HT denied that the collaboration had anything to do with the high-voltage launch of DNA.
Says Ravi Dhariwal, executive director and member of the board, Bennett, Coleman: "It's not a change in strategy for either of the players. We compete for readers and advertising but that does not mean that we will not collaborate. In Mumbai, it will be a win-win situation for both of us."
Anand Bharadwaj, HT's marketing head, points out that it is a "simple business arrangement" where printing facilities have been bartered for ad space.
However, DNA's marketing head Suresh Balakrishnan refuses to buy the argument. "The signal is clear. It only suggests that Times considers HT a lesser rival than us", a point that Times insiders concede privately. DNA will launch a new campaign around this theme this week.
Both HT and Times declined to comment on how long the collaboration will last in Mumbai, whose share of the estimated Rs 4,500 crore (Rs 45 billion) national print media advertising market is over Rs 1,000 crore (Rs 10 billion). Of this, Rs 900 crore (Rs 9 billion) goes into English language media.
Media planners consider HT's move to be an astute one. Says a senior executive with WPP's media arm, Group M, "This collaboration will help HT reach out to a wider number of people as Times has the highest circulation in Mumbai. Also, the company will have limited cash outgo." According to industry sources, a full-page colour ad in Times costs anywhere between Rs 30 and Rs 35 lakh (Rs 3-3.5 million).
Media buyers add the deal makes sense for Times also as it will "prefer to deal with a known devil (HT) rather than an unknown one (DNA)".
This is not the first time that newspapers have come together in the city in preparation for heightened competition in the market. Indian Express recently bought 10 per cent of Mid-Day and the two now work a joint advertising tariff card.
Burying the hatchet
HT begins advertising its planned Mumbai debut in The Times of India and Radio Mirchi
ToI to share HT's newly set up printing facilities in Navi Mumbai
- DNA says Times considers HT a lesser rival than it