Hindustan Times vs The Times of India

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Case Details:

Case Code : BSTR016
Case Length : 9 Pages
Period : 1999 - 2001
Organization : Hindustan Times, Times of India
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Media, Entertainment & Information

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"We are totally baffled by this price war and don't have funds to compete. Pricing a paper at Re.1 is ridiculous, even by their own admission. We can only hope this irrational pricing does not last."

- A Senior Manager at The Indian Express.

"For many years, no one (at HT) considered ToI competition. We thought the advertiser can't do without us. Now, we are on our toes, always looking at what the competition is doing."

- Shobhana Bhartia, Vice Chairperson, Hindustan Times.

In the late 1990s, Hindustan Times (HT)¹ was facing tough competition in Delhi from The Times of India (ToI)² so far as circulation, readership and revenues were concerned. HT earned more than half of Delhi's ad revenue, but ToI too, was getting close to 40% by 1999-2000.

This was a major cause of worry for HT, as three-fourths of its ad revenues came from Delhi. Also, except for the Hindi daily Hindustan, HT had no other strong brand whereas ToI had The Economic Times, Filmfare and Femina.

For the first time in its 76-year history, HT made an operating loss in the first quarter of fiscal 2000-01. Though the gross profit stood at 6% in 2000-01, it was far below the average of 30% earned during 1990s. In 2001, Shobhana Bhartia, Vice Chairperson of the HT Group, decided to fight back and announced an investment of Rs.4 billion to counter ToI. It seemed to be the beginning of a spectacular battle in the domestic publishing industry.

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A Brief On The Industry

Newspaper companies in India came to be projected as public service institutions after independence.

However, in the late 1980s, they became just another fast moving consumer commodity. The companies started aggressive marketing and promotional strategies to increase circulation and readership. The industry witnessed tough competition both regionally and nationally. In 1999, the top 10 newspapers accounted for about 90% of the readership and the top two made 90% of the profits. There was fierce competition for the advertising rupee By late 1990s, electronic media like television had made a dent into the print media revenues. Print media was facing a squeeze due to the increasing popularity of television-initially color television and then satellite television. The ad market worth about Rs.90 billion slowed down and newspapers saw a steady decline in advertising share - from about 75% in 1995 to almost 50% in 2000.

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1] HT, the flagship publication of, Hindustan Times group, was inaugurated as a tabloid eveninger by Mahatma Gandhi on September 24, 1924. In 1927, Ganshyam Das Birla took over the paper. According to Audit Bureau of Circulation, in 2000, HT had a two-thirds readership share of all English newspapers published from Delhi.

2] The first edition of The Bombay Times and Journal of Commerce, later renamed The Times of India, was launched in Mumbai in 1838. After several years of change, evolution and growth in the paper's character, Bennett, Coleman & Co. Ltd (the proprietors of The Times of India Group) was established with the principal objective of publishing newspapers, journals, magazines and books. By 2001, The Times of India Group emerged as multi-edition, multi-product organisation. Some of the brands owned by the Bennett, Coleman & Co. Ltd. are The Times of India, The Economic Times, Femina, Filmfare, Navbharat Times, Sandhya Times and Times FM.