The scene could have been from the 1961 film Guns of Navarone. In it a team of Allied commandos take on the suicidal mission of destroying a massive German gun emplacement watching over a vital sea channel.
Back home, in 2005, the island was Mumbai, at Rs. 800 crore - Rs. 1,000 crore, the single largest print advertising market in India and guarded like a fiefdom for close to two decades by The Times of India.
Under the mission leaders — Sudhir Agarwal, the sharp yet unassuming brains behind the Dainik Bhaskar group and Subhash Chandra, the self-made media baron who had dared to cross swords with Rupert Murdoch — was assembled a crack team of senior journalists, marketers, salespeople and distribution experts to not just take on The Times of India, but conclusively defeat it. Their secret weapon was a new newspaper called DNA.
Once Mumbai was conquered, DNA’s gameplan was to quickly replicate its success in most big metro and city markets across the country, becoming a pan-India newspaper advertisers and readers couldn’t ignore.
But after a bruising five year battle, DNA’s original ambition lies in tatters.
With the exception of current editor R. Jagannathan almost all the senior professionals it hired to fight The Times of India have deserted it. Its readership in Mumbai is down nearly 15 percent from its 2009 peak while The Times of India’s is still 2.5 times larger. To pare down losses due to lower-than-expected revenue, the paper has been forced to progressively do away with additional supplements, reduce pages and print lesser copies of the newspaper. Its ad rates are one-third The Times of India’s on paper, but close to one-seventh in reality due to severe discounting. There’s no sign of its revenue being enough to cover its operational costs for at least another year or two, says CEO K.U. Rao, leaving unanswered the larger question of how much longer it will take for the paper’s investors to recoup the Rs. 1,100 crore they have put into the project till date.
The result: Instead of gunning for The Times of India, Rao is working hard to make DNA an economically viable business. “Our vision since day one was only to become one of the top five English publications in the country,” he says.
It’s a compromise DNA had no choice but to make.
Bruised and Battered
DNA’s current predicament followed a rather impressive start — getting from zero to 400,000 copies in Mumbai within two years. It did that by using an all-out mix of editorial star power, free-flowing cash lines from both parent investors and a product that was crisp, well-designed and intelligently written.
But though CEO Rao outwardly seems thrilled to have broken into the top six English general newspapers in India on aggregate readership, things are not so rosy when you delve deeper.
In its largest market, Mumbai, which accounts for nearly three-fourths of its readership, DNA is a distant number three after five years of operations. Hindustan Times at number four is snapping at its heels, with just 7 percent lesser readership.
In Bangalore where it launched in December 2008, it is on the verge of being dislodged by Deccan Chronicle for the number three position. In Surat it shuttered operations after launching an edition in 2007.
“It was a dream we had. We wanted to give the Times a fight and to some extent we did. I don’t know about the future though,” says Sidharth Bhatia, a veteran journalist who was the editor of DNA’s edit pages from inception till December 2009.
Financially, DNA’s future is grim. Its revenue last year, at Rs. 148 crore, was up 22 percent over the year before, but that was still Rs. 70 crore short of covering its operating costs. Cutting costs is therefore Rao’s first priority as he attempts to steer DNA to profitability.
Under Subhash Chandra’s active guidance, who started playing a more hands-on role at DNA since the last one year after taking over from the Agarwals of Dainik Bhaskar, Rao is walking the fine rope of trying to print less pages but sell more ads. DNA’s print run in Mumbai was reduced by over 100,000 copies last year to reduce its cash burn rate.
Rao says DNA will also become more hyperlocal. That means it will intensify its news coverage that is local to the reader’s location. In Mumbai it has two supplements targeted at the suburb of Thane and the city of Navi Mumbai. Doing so will hopefully allow it to attract more retail advertising. “If a Hyundai or Maruti showroom takes out ads in a newspaper, it would not take much convincing to get Hyundai or Maruti themselves to advertise too,” says the head of an independent media planning agency.
The other area where Rao has taken a knife to, is staff salaries. In 2005, DNA lured a phalanx of senior editors and journalists to join it, in many cases from The Times of India, by offering salaries that were 50-100 percent higher than their previous jobs. While this allowed it to establish the DNA brand on the back of well-recognised journalists, it also got saddled with a bloated cost structure that was very top-heavy.
Infographic; Sameer Pawar
(This story appears in the 08 October, 2010 issue of Forbes India. To visit our Archives, click here.)
Hello sir i have heard the DNA has launching the edition in chennai. Shall i know when we can see that.
on Dec 9, 2010Too one sided article against DNA. About the same time as this article, DNA's readership grew in Mumbai dramatically, while Subhash Chandra whittled costs by sending home highly paid non performers. If there is hope for another paper in Mumbai it is DNA. The author has focussed to much in the past.
on Nov 7, 2010Looks like you have forgotten the media launches of 2005 in Mumbai.... Why TOI & DNA? Compare DNA's growth and stand with that of Mumbai Mirror & DNA in Mumbai. That will be justified.
on Oct 14, 2010TOI could not get at DNA for 5 years and now this article. The financial results of DNA are far better than Mumbai mirror which it launched to attack DNA. TOI itself is losing 200 cores every year on Mirror.
on Oct 4, 2010Your views seem very biased. Rather than understanding the fragmentation of readership and TOI's drop in market share you don't seem to appreciate healthy competition.
on Oct 3, 2010Such a skewed article. Isn't TOI satisfied with the media net which has already put a big question mark on journalism? Its quite imperative that they have started feeling the pinch from DNA. To sustain 5 years in this market against a 170 yr old is quite an achievement. I am regular reader of TOI and DNA both, nothing wrong in the product infant sometimes DNA is much more reader friendly and valuable than TOI
on Oct 2, 2010Read the TOI mainly for the advertisements - covers mostly all major ad-releases. Content-wise, DNA & HT are much superior. However, knowing the financial strength of the TOI group, I do not think anyone else can win a price war by itself. It is more of a war for sustained readership (even for free) and ad-revenues. As a reader, I am glad for the choices in newspapers and hope that all these can co-exist.
on Sep 30, 2010DNA is barely five years old and has already emerged a strong brand in Mumbai. It has also built a sizable readership base which is quite an achievement given that the market leader has a 165-year head start. There is no need to ready an epitaph now.
on Sep 28, 20105 year or 165 years 2005 saw the emergence of new dailies in Mumbai and people now want to experience every new product in the market. Hence DNA tried very hard to find foot in the Mumbai market but now its fighting for its survival and moreover the paper design and concept is borrowed from The Times of India thus it didn't have any new things to offer to reader apart from reduced Cover Price.
on Sep 28, 2010I am a regular reader right from inception. Investment return ratio on a timescale on current era among competitors is a little more difficult. This need not dictate or pressure DNA to deviate from its chosen 'vision and mission statements'. i still love to read DNA news daily.
on Sep 27, 2010The kind of thrashing it has got from the The Times of India that it has already Lost its "Vision" ,Forgotten its "Mission" and diluted DNA. Its waiting for its last rites. Enjoy reading the crap paper everyday.
on Sep 28, 2010The readers are speaking for themselves. Still you seem to be hell-bent on TOI's century old reign. Has it not occurred to you that they have only rotted with time. More so, the content is just phenomenally absurd. If there is a news paper that is trying hard to live up to people's expectation with an offering that is as honest as it sounds then why not accept it? Why pander to 165 year old crap.
on Jun 14, 2011