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Circulation wars: Hindu takes on Deccan Chronicle

Chronicle claims sales of 2.5 lakhs, Hindu disputes it.

May 8, 2006

Barely a year after its assault on Fort Chennai, Deccan Chronicle seems to have rattled Old Lady Hindu. The issue in question is Deccan Chronicle's circulation in Chennai. For decades, The Hindu had a steely grip on the English newspaper readers in Chennai. At that time, Hindu did not seem the Deccan threat important enough to take on.

David proved smarter than Goliath. Deccan Chronicle went to the stands at a price of Re 1. This sharp undercutting was the first sign that Chronicle was seriously into battle. The Hindu initially thought of cutting cover price, and then decided against it. It also announced an introductory offer of Rs 99 for an year of Chronicle. Deccan Chronicle also went for an IPO, to raise resources for the battle ahead.

Now, newspapers fix advertisement tariffs based on their circulation figures. The higher the circulation, the steeper the tariffs. For higher circulation, newspapers, for ages, have been known to use underhand tactics like printing newspaper which won't be sold, cooking the circulation books and appeasing hawkers to drive their own sales. Chronicle claims to have a hawker commission of 35 paise per copy, but Hindu now alleges it is much higher.

Things came to a head when Deccan Chronicle sought an ABC certificate for its Chennai circulation. Hindu sat up, and took notice. It was suspected for some time that Deccan Chronicle had been paying hawkers more commission than is allowed, to boost their circulation. If the circulation figures were artificially boosted by unethical means, then Chronicle's attempt to gain a smarter ABC certificate had to be blocked. Hindu moved court.

In the Bombay High Court, Hindu submitted that the issue of an ABC certificate "would adversely affect the circulation and advertising revenues of The Hindu" and would "also adversely affect the business interests of The Hindu, which has a dominant market share in Chennai." According to Hindu, "there is every possibility that their advertising market would be hampered" and claimed damages "on account of losses and hardships they suffered."

However, ABC that it issues circulation certificates only after due auditing, verification, surprise checks. "During the first surprise audit in January 2006, we were satisfied with the maintenance of publishers' books and records and had accordingly issued the Yellow Incoming Certificate containing the certified circulation figures of Deccan Chronicle, Chennai, for the audit period July-December 2005 based on audit of the second defendant's books and records," ABC said in court.

The Bombay High court did not grant Hindu's plea for interim relief or a direction to ABC to stop releasing the certificate. The claim for damages was rejected too. The court, instead, gave four weeks' time to Chronicle to reply to the Hindu petition. After that, Hindu gets two weeks to file a rejoinder.

Chronicle's Chennai circulation, according to Hindu officials, cannot be more than 50,000 copies, compared to Hindu's 3.5 lakh. However, Chronicle says that its circulation is nearly 2.5 lakh on weekdays and nearly 3 lakh on Sundays. Clearly, there is a huge divergence there. Regardless of whether ABC finally issues the circulation certificate to Chronicle or not, it is clear that for the first time, the southern titan has been challenged and rattled in its own stronghold. It's a
battle worth watching.






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