"The Hindu" rate of growth

I don’t travel to Chennai often. Otherwise there is one person I’d have loved to meet. That’s N Murali of The Hindu. Somehow I have a feeling, at a time when most publishers are reeling under the advertising slowdown, he must be chuckling at the plight of his competitors (and, for that matter, even of some his esteemed contemporaries across the country).

In some of the earlier posts we have tried to examine, how some publishers (new and old) in their quest for super-normal growth have erred on certain fundamentals when the good-times rolled. It is equally important, therefore, to analyze what others did right – even if it’s by the benefit of hindsight.

When competitors came knocking at their door – The Hindu remained steadfast in their strategy refusing to drop cover price or get into a mad race for higher circulation to stay ahead of the new entrants. By all accounts, they didn’t give into advertisement rate-cutting tactics either. Many called this old world arrogance, others attributed it to an overly conservative attitude – both unsuited to today’s age of nimble footed competition. Some rushed to prematurely write an elegy for it – predicting the same fate as what “The Statesman” had met with in Calcutta by refusing to react to new competition.

In the Mint Article referred to in the previous post (read post)– Bagga predicts 3 broad trends in these times of media recession: 1) increase in cover-price, decrease in pagination and curb on circulation; 2) ‘right-sizing’ of operations and 3) consolidation across businesses. By default or otherwise, The Hindu wouldn’t need to do any of the 3. It didn’t drop cover price, increase pagination or pumped up circulation. It was always a tightly run ship with a ‘conservative’ cost structure. So there is little fat to trim in the system. Finally, it has always run its businesses on a ‘consolidated’ model.

Sometime back, another article in MINT had quoted – Farokh Balsara, Head of the Media and Entertainment practice at Ernst and Young saying: “Six months back, it was growth for growth’s sake for publications. Now the focus is on profitable growth as we see companies compelled to take hard decisions due to the liquidity crunch.” (click here to read the piece)

I don’t think The Hindu would have any such problem as they were never afflicted by the malady of chasing “growth for growth’s sake” unlike many others – be it because of pragmatism or innate conservatism – call it what you want. To my mind, the only weak product in their stable, as on date, would be the Frontline (does it still exist ?). Even that – even if they are holding onto for some sentimental reasons – is unlikely to be bleeding heavily. HBL should - by now – also be able to largely fend for itself. And, The Hindu - the main paper - never went over-board on the circulation of their multi-city editions in Bangalore, Hyderabad etc.

And, being the undisputed market-leader they would continue to garner maximum share of advertisement even when the chips are down (literally !!) and not being wholly dependent on ad-revenues - they would be able to tide over the down-turn better than the others.

So, there may be some merit in following “The Hindu” rate of growth, after all.

(Of course, being a distant observer and not close to the scene of action, I could be widely off the mark. For that – I would look up to my friends in the “South of Vindhyas” for validation of the facts. I am sure there are enough detractors of The Hindu – or “Hindu baiters” if I may call them – to blow large holes into my analysis. So it’s E & OE – comments and corrections most welcome)