The billboards are hard to miss. Bombay has been plastered with nearly 1,300 in-your-face ads featuring all manner of ordinary citizens -- young, old, hip, conservative -- speaking out on everything from global politics to local corruption to sex. "George Bush should go back to school," says one. "There should be an official rate card for bribes," opines another. "Why can't pubs be open all night?" rants a third. They all bear the tag line: "Speak up. It's in your DNA."
No, it's not a new biotech discovery. DNA is Daily News & Analysis, an English-language newspaper to be launched in August by Bombay television station Zee Telefilms Ltd. and the Hindi-language Dainik Bhaskar, the country's largest-circulation daily. DNA's punchy advertising provoked Bombay market leader The Times of India to introduce a similar campaign. DNA's owners sued The Times, which quickly withdrew its ads, but the tussle left both sides still spoiling for a fight. "This will be the mother of all battles," vows Girish Agarwal, marketing director of Dainik Bhaskar. "We are taking on the biggest giant in the country."
India's media scene is becoming a free-for-all. In Bombay alone, three groups are expected to launch new broadsheet papers this year. In addition to DNA, New Delhi's Hindustan Times will appear, as may Calcutta's Telegraph. In response, The Times itself is planning to introduce a tabloid called the Bombay Mirror. "We welcome competition, it's good for the industry," says Bhaskar Das, executive president of Times of India Group.
The newspapers are being joined by four new all-news TV channels, which will add to India's existing 18 news channels -- twice as many as a year ago. "India is going from a developing economy into a developed one, and the media are leading that change," says Sameer Manchanda, joint chief executive for CNBC-TV18, backed by U.S. business news channel CNBC and a Bombay broadcaster.
India's boom has unleashed a wave of new advertisers. Cellular operators, banks, insurers, and makers of cars, scooters, and TVs are all looking to sell to the country's middle class, 100 million strong and growing fast. "India has a vibrant economy and a vibrant media market that's still nascent," says Michelle Guthrie, chief executive of Star Group Ltd. in Hong Kong, which a year ago launched its own Star News channel in India. "New channels will grow the market," she says. Spending on TV spots is expected to increase by nearly 12% this year, almost twice the global average of 6.7%. And ad spending in print is expected to grow as much as 25% this year, to $2.1 billion, compared with 3.8% growth worldwide, according to Bombay investment bank YesBank. Advertisers, meanwhile, are ecstatic about all the new outlets. "We are expecting better rates, about 15% to 20% less," says Hemant Sachdev, director for marketing at Airtel, India's largest mobile-phone operator, which has an annual ad budget of $25 million.
There's also plenty of new investment money sloshing around. Last year, New Delhi changed rules barring foreigners from the sector, allowing them for the first time to hold up to 26% of Indian news media companies. That has led to a wave of investment. In the past 18 months, Indian media ventures have raised about $300 million in foreign funds, and an additional $250 million is expected soon, says YesBank. Local investors are jumping in, too. The past year has seen four initial public offerings of media stocks, and three more are expected by yearend. The Hindustan Times is planning a $50 million IPO to fund its Bombay foray, and the Indian Express hopes to raise $40 million. One reason for the interest is that the return on equity for India media investments is 25% or more, twice the global average, says Vishal Marwaha, a partner at private equity outfit Henderson's Asia Pacific Fund, which spent $26 million for a 15% stake in The Hindustan Times last year.
That extra cash means more competition is on the way. Even as Zee TV helps launch DNA, print-media stalwarts are aiming to get into TV or expand into new regions and languages. The Times of India is planning Times Global Broadcasting, a venture with Reuters Group PLC, while Hindi-language Dainik Jagran has joined forces with the Irish Independent to launch Channel 7, a nationwide Hindi-language news channel. Calcutta paper Ananda Bazaar Patrika is a partner in the Star News venture, and South India's highbrow English daily, The Hindu, is planning a Bombay edition. "It's the beginning of Indian media conglomerates," says Sunir Khetarpal, YesBank's point man on media deals.
With so many players, there's bound to be a shakeout. The country is already awash in newspapers: Some 55,000 publish in two dozen languages, and nearly 2,000 of those are dailies, according to government statistics. Although most are tiny local-language operations, the biggest are substantial by any standard. Dainik Bhaskar has 18 editions and a combined circulation of 1.7 million, while The Times boasts eight editions and total circulation of 1.3 million. DNA, meanwhile, aims to attract 350,000 subscribers in Bombay, which already has a dozen dailies. And while ad spending on news channels is growing fast -- it's expected to hit $160 million this year, up from $10 million four years ago -- it's still not much when split among 22 rivals. In such a crowded space, "everyone will bleed after splurging, then a deep-pocketed player will step in and be a winner," says Mahesh Chabria, director with Enam Securities in Bombay.
Ordinary Indians have mixed feelings about the boom. Many say papers devote too much space to the antics of the country's Bollywood and social elites, ignoring stories about an India in transition, with its problems of corruption, education, infrastructure, and health care. With luck, some of the new outlets will focus "on things that affect us rather than nonsense that parades as news," says Bombay lawyer Javed Gaya. DNA, at least, promises to do that, citing research showing that Bombay readers also want serious news. "We [and The Times] both have the money and the resources, so the Bombay fight is that of quality editorial content," says Dainik Bhaskar's Agarwal.
Others are skeptical. The new media "promise to be poppycock and cater to vulgarian minds," grouses aspiring actor Vikram Rao, who reads five papers every day and watches an hour of news. "They will continue to breed mediocrity and make my stomach churn." At the very least, consumers such as Rao and Gaya will have more choice. As the action unfolds in coming months, they'll discover whether that choice provides them with more news or more nonsense.
By Manjeet Kripalani in Bombay