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July 26, 2016, 1:31 p.m.
Business Models

For Western news companies looking to India, partnering with local publishers is a path in

Vice is only the latest American or British publisher to seek out an Indian partner — in its case the Times Group — for reasons that combine local knowledge and legal restrictions.

If a publisher wants rapid success in India, a hugely attractive but notoriously difficult market, it might be best to set up a partnership than go it alone: One Indian media giant claims it can help boost audience and revenue by a factor of at least four.

Vice has become the latest big American media company to announce a major launch in India, setting up a joint venture with the powerful Times Group, perhaps best known as the publisher of the highest-circulation English-language newspaper in the world, The Times of India. Vice CEO Shane Smith says he’s looking forward to bringing “content to the largest millennial population on earth.” Just as significant, the company will also make original content in India for its worldwide audience, through a new bureau and production hub in Mumbai.

The business case for foreign media companies in India is by now clear: Globally, only the United States contains more people who speak English fluently, and aside from physical geography, there is little to distinguish the wealthiest young Indians in Mumbai or Delhi from their counterparts in London or New York. Many end up at university in the U.S. or U.K. and are into Beyoncé, Cristiano Ronaldo, and Xbox. It makes perfect sense for BuzzFeed, The Huffington Post, and now Vice to attempt to tap into the market.

Half of India’s population — 600 million people — is under the age of 25 and as access to the internet improves, the overall audience will grow. A huge number of people — again, we’re talking hundreds of millions — are now connecting to the Internet on increasingly affordable smartphones, and they are demanding content that represents their lives.

But it is worth remembering that despite the hubris around “the largest millennial population on earth,” most Indians are not English speakers. It would take an especially brave, ambitious foreign company to take on the extremely difficult challenge of developing content and platforms in multiple languages. The BBC — aided by its long tenure in India, historic British-Indian ties and deep enough pockets — will soon announce a new digital hub, serving several languages, based in New Delhi. But most non-Indian companies operate only in English, at least for the time being.

The 100 million Indians who do use English still constitute a tempting market, even though it’s only a small fraction of India’s 1.2 billion population. But setting up shop there is far from straightforward. The government is gradually opening the country up to foreign investment in a number of key industries but media is not yet one of them. It is not possible for foreign media companies to operate subsidiaries in India, if the headquarters remain outside the country.

There are two ways around this. One is to set up a separate company, registered and firmly based in India, through which the tasks of hiring, firing, and distribution are controlled locally (even if major decisions are, in practice, taken in New York or London). The BBC, BuzzFeed, The New York Times, and others have gone down this route. It allows for a significant degree of autonomy, which is valuable in different ways to each company, but it’s more difficult to build a brand, hire staff, and develop distribution networks in such a fiercely competitive market.

The other, increasingly popular way is to enter into a partnership with an established Indian media house, removing the hassle of setting up and maintaining an entirely new company. This is what Vice has done with the Times Group, and it’s not alone in using this strategy to acquire an audience and hopefully achieve rapid growth in India.

India’s Internet boom has enabled the growth of several homegrown digital media companies, who are chasing pretty much the same audience as Vice or BuzzFeed. ScoopWhoop is a social entertainment site, now also producing hard-hitting documentaries, that began life as a BuzzFeed clone. It now claims a total mulitplatform audience of around 200 million.

“India is unlike any other market,” says ScoopWhoop founder Sattvik Mishra. “It is complex. We have over 1,600 languages. It’s not easy to understand the pulse of this nation, especially if you aren’t here. So it makes sense for foreign publishers to partner with Indian companies.” Indian companies, in other words, enjoy a significant home advantage that can help their partners from overseas.

The Times Group, one of India’s biggest media houses, has a Global Partners division which makes deals with digital companies from all over the world and promises to help them operate in India more efficiently than they could if they tried to do it alone. It works with, among others, Uber and Airbnb, as well as no fewer than 15 publishers, including The Huffington Post and Business Insider. Puneet Singhvi, chief operating officer at Times Global Partners, is confident that they can help Vice be successful in India.

“We have demonstrated it with other partners, who have all grown 400 to 600 percent within the first year of partnership,” he says. “Times Group understands the Indian audience and the Indian media and advertising landscape better than anyone, and we bring those capabilities to the partnership. Most of their competitors are largely flat over the same time.”

They work with companies who are, on the surface, rivals chasing similar audiences. But for the Times Group, The Huffington Post, and Vice are separate products, each with unique growth potential, and are treated accordingly.

“The publisher portfolio of Times Global Partners is pretty diverse, spanning technology, sports, news, finance, investing, gaming and lifestyle,” says Singhvi. “All partnerships have independent teams that focus on growth. We believe each partner title that we work with is a unique product and has ample headroom for growth within the genre. The addition of Vice will augment the diversity and strength of the portfolio.”

It remains to be seen how successful Vice will be in India. For them, a partnership means a loss of autonomy and presumably, a smaller share of any revenue that’s brought in. The Times Group won’t divulge the precise nature of the joint venture, so it’s hard to get a reading on who gets what. But it is a relatively low-risk way for Vice to begin dealing with an unfamiliar audience. India rarely makes global headlines these days but continues to be a source of the sort of stories that its worldwide diaspora will click on. That’s another market of millions of educated, relatively affluent users that will please advertisers.

Indian publishers, for their part, don’t seem to be worried about the increased competition. “I think it’s great for the ecosystem,” says Mishra. “I genuinely feel there is lack of quality content and with Vice in the picture it may help fill that void…It’s not a winner-takes-it-all market. Time will tell how Vice shapes up in India. A lot of international publishers like BuzzFeed, Huffington Post, Mashable, TechCrunch, Gizmodo have entered India but have had little impact. Hopefully, Vice will change that and surprise us.”

Photo of The Times of India, the Times Group flagship paper, in 2010 by Phil Whitehouse used under a Creative Commons license.

POSTED     July 26, 2016, 1:31 p.m.
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