The Hindu Business Line : `Mid-Day will foray outside Mumbai in coming fiscal'

MID-DAY Multimedia Ltd was in the news recently when Indian Express acquired 10 per cent equity stake in it for Rs 25.54 crore at Rs 60 per share. The Goenka-owned newspaper group bought the stake from the promoters of Mid-Day Multimedia, the Ansari family.

The media company has been attracting investor attention on the bourses. Mid-Day Multimedia, which publishes Mumbai's leading afternoon newspaper Mid Day, is also present in outdoor advertising, television and radio. Print media accounts for 80 per cent of the topline and in that space, Mid-Day Multimedia is looking to foray outside Mumbai.

Says Mr Manajit Ghoshal, CFO & V-P, Corporate Services, Mid-Day Multimedia, "The national tabloid story is waiting to happen in India and Mid-Day is best positioned to fill the slot. The coming financial year will see us foray outside Mumbai."

However, Mr Ghoshal declined from answering questions pertaining to the synergies with Indian Express. Excerpts from the interview:

With the advertising scenario improving, the media sector appears to have a good season ahead. Going into the next fiscal what will be the focus areas for Mid-Day Multimedia? Is there any specific segment you will be focusing on? To what extent will your hike in ad rates drive up revenues?

We expect the media market to open up now in terms of growth as well as competition. I believe, media & entertainment will be one of the fastest growing sectors. Mid Day will focus on becoming the number one newspaper read in Mumbai as well as evaluate possible expansion outside the city. We will continue to strive to make our media products more entertaining and tabloid. We will evaluate ad rate hikes in specific advertising categories in the coming financial year.

In terms of a topline and bottomline growth when do you see the spike coming? And, what are the factors that could propel growth?

The specific factors that can significantly boost the financial profile of Mid-Day are - change in radio licence fees, hopefully retrospectively; the release of our movie Black Friday (based on Mumbai serial blasts of 1993) and easing of newsprint prices. All these are expected shortly.

Margins in the print media were under pressure because of rising newsprint costs. How are gross margins now and where do you see them heading? How much does the print media contribute to the company's topline?

Print media contributes around 80 per cent of the group's topline. While gross margins were under pressure due to high newsprint prices, the rise in advertisement rates and volumes helped alleviate any major concerns. We expect revenues to be buoyant in future and newsprint prices to stabilise and come down in another three to six months.

Is there any indication as to how the Government will look at the radio scene? The radio licence fee resolution is expected shortly.

There were reports that Mid-Day had sold its outdoor advertising business. If so, to whom has it been sold?

We have not sold our outdoor business. We have entered into an operations merger with Clear Channel International's (CC) India operations. We have the same operations team managing both Mid-Day and CC businesses. This gives us immediate cost synergies. In future, we will explore a joint venture with CC. However, Mid-Day is very clear that though we believe in the potential of the outdoor medium, we will not be operating any outdoor business directly. We are a content business and we will stick to our core strengths. At present, the outdoor business incurs a loss of about Rs 2.50 crore per annum. We expect to get rid of this negative impact in the coming years.

What decision has the company taken on its foray into films? Will you be looking at any film projects beyond Black Friday?

Black Friday was conceived as a television product. Two factors contributed to its theatrical release. First was Mr Jhamu Sughandh's confidence in the project and his willingness to take on 50 per cent of the cost. The other was the low cost of digital technology, which allowed this product to be edited for television release as well as theatrical release. We have no intention of producing films. However, Mumbai news is our strength. We shall continue to produce `made for television' products on a commission basis for other channels. We see this as an additional revenue source on our existing cost infrastructure.

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