FT India: The buzz is rising

Financial Times exits Business Standard; to roll out FT Indian edition, China magazine

By Our Media Editor
15 February, 2008:

When Asian giants wake up, British marques take note. For Pearson Plc of UK, it has been happening times, especially regarding its Asia operations. In just a month, Pearson, the publisher of Financial Times and Penguin books, has sold its stake in Indian financial daily Business Standard, announced plans to launch Financial Times from Mumbai, and kicked off plans for a financial magazine to be published in China.

Pearson, through Financial Times, had a long association with Business Standard in India, dating back to 1993. Business Standard, then just one of the three financial dailies around (others being Economic Times and Financial Express) was one of the first form a content sharing deal with Financial Times. Several pages from FT were reproduced in Business Standard, akin to The Financial Express sourcing content from The Wall Street Journal. While the Financial Express-Wall Street Journal content sharing was called off in 2001, the Business Standard-Financial Times tie-up survived - and did rather well.

When foreign investment in news media was opened for foreign investment, Business Standard was one of the front-runners, seeking and getting foreign direct investment from Pearson. As per India's FDI rules, foreign direct investment is allowed only up to 26% in news media. The rest has to remain with Indian promoters.

In 2003, Pearson Plc picked up 13.85 per cent equity stake in Business Standard for Rs 14.10 crores. Though Henderson Global Investors had, by then, already bought a stake in HT Pvt Ltd, the BS-FT deal was the first deal in which a foreign publisher bought a stake in an Indian publication. Moreover, this was the first such deal where a content-sharing deal was expanded to an equity partnership. There was cause for cheer at the BS headquarters in New Delhi.

However, despite the foreign investment and the launch of several regional editions and ventures in vernacular, Business Standard was not able to considerably expand its revenue sphere, thanks to stiff competition put up by market leader Economic Times, a new BusinessLine edition printed from Mumbai, and newcomer Mint (published by HT Media), besides increasing competition from business TV channels and the Internet.

It may be noted that bad times were not specific to Business Standard. Also-ran Financial Express too fell into bad times, witnessing falling circulation. At a time when India's GDP soared, self-proclaimed masters of business journalism witnessed a fall in fortunes.

Financial Times was in no great shape either. There have been persistent rumors of Pearson planning to sell off Financial Times, which was becoming a drag on growth. There were frequent demands from Pearson's investors that the company sell off FT. Pearson, however, had denied the rumor and refused any sale plan.

However, what must have forced the Pearson hand in exiting Business Standard -- which was becoming a dead investment -- and concentrating more on Asian markets must have been pure business sense: Print media revenues have been falling across the world, fuelled by the increasing influence of Internet media and television channels. In India, however, print has been posting consistently robust growth, backed by demand from an increasingly growing and better-educated middle class. A brand-cum-equity entry into India will help FT establish itself as a growing, global brand, besides positioning itself at a vantage point as and when print media opens up for more equity investment.

Again, the threat was growing with News Corp acquiring The Wall Street Journal. FT had initially considered a bid for Wall Street Journal along with General Electric, but had later backed out. News Corp's strong currency chest would help pump up Wall Street Journal and FT could not afford to wait and watch. With Wall Street Journal tying up a new deal with Mint in India - enlarging its brand reach - finding new markets in growing Asia became imperative for Pearson and Financial Times.

So, it was little surprise when Business Standard announced the end of the marriage in a front page brief on April 14. "Infina Finance Private Ltd, an associate of the Kotak Mahindra group, has acquired the 13.85% stake in Business Standard Ltd from Pearson, the owner of the Financial Times. Business Standard and the FT have also realigned the licence agreement between the parties whereby Business Standard will continue to have access to FT content till the end of the year. BSL and the FT have had a fruitful association for 15 years, and each wishes the other well in its future plans."

The end of FT-BS in India, but a new beginning for FT. Financial Times is now planning to launch its latest edition from Mumbai. Pearson has tied up with Network 18, an Indian media conglomerate spanning media interests on TV, Web, and wire services. For TV18, which is best known for its business news channel CNBC-TV18, having a business newspaper in its stable will be highly complementary. Headed by Raghav Bahl, Network 18 has been on expansion spree in the past few years, launching CNN-IBN and IBN-7 channels, acquiring Crisil Marketwire and launching several business and general news and features portals. Network 18 is also bringing Forbes magazine to India, but the contours of this venture are not yet publicly known.

The end of FT-BS deal was followed by news of Financial Times launching its India edition, to be based in Bombay. Pearson, however, may have problem launching the paper under the Financial Times masthead in India due to intellectual property rights issues, since Financial Times is a supplement which goes with the Economic Times in some markets in India. Last week, Mint reported that Jaideep Bose, executive editor and editorial top dog in Times of India may be on his way out. Jojo, as Mr Bose is known, is a veteran editor who has been an editor with Economic Times before he was tapped to be the editor of sister publication Times of India. Jojo has not confirmed or denied rumors of his exit so far. Given Times management's financial wherewithal to keep anyone back at any cost, it will be big catch for Pearson if it can finally rope in Jojo to steer Financial Times, one of world's most-respected media brands, in India.

Besides India, FT has turned active across the border too. Yesterday, Pearson announced plans to launch a Financial Times magazine in Chinese, tentatively called FT Rui, where Rui means intelligence in Chinese. FT already has a presence in the Chinese language with www.ftchinese.com, and the new magazine, may be published from Hong Kong. FT Rui is expected to be launched before Olympics in August. Rui will target the increasingly affluent Chinese middle class. FT's logo will be printed on the cover of FT Rui, to promote the FT brand. UK-based Zhang Lifen, who is chief editor of FTChinese.com will also oversee Rui. Daily operations, will however, be based in Beijing.

Apart from original content generated in China, the magazine will also have content sourced from FT and its group publications like FT Wealth. Pearson is currently in the process of securing approvals from authorities in China, where media is still highly regulated.

As FT pitches its tent in the growing Indian advertising market, its a win-win-win-win situation for all: The publisher, who expands revenues, the reader, who gets a wider choice, the advertiser, who gets more media to choose from, and last but not the least, journalists, whose valuations soar up as demand overshoots supply.