In a happy-ending sequel to his March memo that effected pay cuts and sent waves of panic through India’s print media industry, BCCL CEO Ravi Dhariwal says “there is reason for us to look at the future more optimistically”.
The memo, that was sent out on Friday to staffers at India’s largest media company, Bennett, Coleman & Co. Ltd, Dhariwal adopts a sequential narrative, starting with: “Last time I wrote to you, a few months ago, we were in the midst of a perfect storm”. Dhariwal goes on to describe what was wrong in the business environment (high newsprint prices, ad slump), what measures were taken (cost cutting, putting future projects on hold) and what the measures have achieved (cost base is at “where we want it to be”).
The memo details other important changes BCCL management has worked on. “We have restructured our Private Treaties proposals, and they seem to be working well. We have a whole new approach to our rate card, and am sure, this will go down well with our clients. We are determined to tap both the high-end, and, the small retail advertisers with specialized products. Expanding Response efforts to smaller towns will also result in better revenues.”
And, in a line that is perhaps far more important than it sounds, Dhariwal wrote: “And today our organization is more aligned, nimble and flexible.”
For the staffers, the best part came the last, where Dhariwal announced a partial payout of a variable component of salaries for 2009-10.
Below, we are publishing the 637-word memo in full as it elegantly articulates the pain and hardwork behind a steady, if gradual, turnaround at an important media company.
There is a recovery story playing out at many media firms and we hope to cover this part of the curve as closely as we did the downward slope. We are hearing unconfirmed stories about salary reinstatements and raises being handed out selectively.
If you know about signs/stories of recovery at your company, please let us know. You can use the anonymous tip off form, or mail me at sk [AT] contentsutra [DOT] com.
Last time I wrote to you, a few months ago, we were in the midst of a perfect storm. On the back of astronomical newsprint prices, and our own expansion, our costs had galloped. As this was happening, Advertising revenues skid on fears of an impending recession. For the first time in many years, we saw a severe margin compression. For a few months we actually lost money. It was clear that we needed to take a serious course correction.
We took several measures to restore the company back to some semblance of financial health. We cut unnecessary expenditures, postponed some of our future projects, scouted the world for cheaper newsprint and also trimmed our organization. Looking back, it was one of the most difficult periods in my career.
In the last few months, there is reason for us to look at the future more optimistically. Whilst revenue growth is still a challenge, we have been able to bring the cost base to where we want it to be. We have restructured our Private Treaties proposals, and they seem to be working well. We have a whole new approach to our rate card, and am sure, this will go down well with our clients. We are determined to tap both the high-end, and, the small retail advertisers with specialized products. Expanding Response efforts to smaller towns will also result in better revenues. And today our
organization is more aligned, nimble and flexible. Best of all, I see our creative juices flowing once again.
We are working to make significant developments in our brands. With the launch of the Times of India Crest edition in Mumbai & Delhi, we will add authority to the TOI brand; and there are more ideas in the pipeline, and am confident that most of them will resonate well with our readers. I can also share with you that we are working on several projects which will continue to increase the affinity the Times brand has with our readers and advertisers. On ET too, the launch of ET Now has gone better than what we expected, and you will see more energy and synergy coming down in both ET and ET Now.
All-in-all, I feel a lot more optimistic about our future, even in the short and medium term. We will get back our advertising revenue, we will grow our circulation, we will increase our readers, we will expand TOI to new geographies, and we will add significantly to our printing capacity in key areas. We are going to try even harder to bring that extra rupee of revenue, and that extra copy of circulation. This year’s plan is really growth oriented, and with the increased production capacity and creative product ideas, we are confident that we will be able to achieve this plan. What also helps is that the newsprint prices are where we want them to be; above all, we are restless to do more. All in all, there is reason to look at the future optimistically. The way you all rallied forth makes me absolutely sure.
With this background, I am happy to inform you that our VC and our MD have asked me to do something very pleasant. We are going to make an advance pay out of 1/3rd of the TVP amount planned for the year 2009-10. You will receive this soon, in the next few days. This amount will be adjusted once we complete the year closing in July 2010 and work out the TVP due to us as per company policy. I am sure, this money is welcome in our pocket. I also think this is a measure of our combined optimism about our future.
I thought I should share this with you before we hit the festive season.