Badri Seshadri is confident of the huge potential regional language readership holds but what he hopes for is better infrastructure to unlock that demand. “Every year, through our sources, we find newer readers take up to books in the local language than the previous years. But sadly, since having set shop in 2004, only about 600 bookshops continue to exist in Tamil Nadu,” says the co-founder of Chennai-based New Horizon Media Pvt. Ltd (NHM). To counter this, NHM has taken up more decisive marketing techniques than before.
The Smart CEO had earlier featured NHM in the October issue of 2010. Though the company’s broad vision and focus have remained the same, along the way it has modified its business strategy to generate more revenue and made its distribution model more effective. NHM recently received its second round of funding from Sridhar Vembu of Zoho Corporation that would be used to further its growth and make it a more profitable venture. With this transaction, Vembu has also bought out Mauritius-based Beacon India Private Equity Fund’s stake. NHM received its first round of funding from Beacon and Mumbai-based Emergic Venture Capital. This fiscal year, it is targeting 30 per cent growth rate over the previous year with a turnover of Rs. 7.5 crore.
“Online sales now account for five per cent of our turnover but there is potential to increase it to 25 per cent.”
Marketing is the key
Tamil continues to be NHM’s leading revenue generator and it will remain so to cash in on this model. “Our first initiative would be to advertise through television and we will be setting aside a substantial budget to do this. In this past one year, I’ve realised the importance of social media marketing and we would like to tap into this,” says Sesahdri. NHM has also taken to the online sales route over the last five months through Flipkart (an online retail portal) which has resulted in higher sales. “Online sales now account for five per cent of our turnover but there is potential to increase it to 25 per cent,” he adds. It has also tied up with companies (like Cognizant, Wipro, Infosys, Ford, Murugappa Group, Chennai Petroleum Corporation Ltd and Zoho) to place book stalls in their campuses – a move that has also seen good revenue stream.
Currently, 80 per cent of its titles are non-fiction-based and a dearth of author-backed books continues to plague the company. Seshadri hopes to soon change that in the coming year. He wants to work with authors who are also good at reaching out to their readers. And as fiction holds great scope for the company, he wants to pursue it seriously in the coming year. “We are interested in picking up rights of both original and translated fiction works by big-time authors and do a huge promotional spree with high profile events and discussions,” he says. The company is targeting at selling 50,000 copies in one year.
While NHM has an efficient distribution model in place for its books published in Tamil, it is not the same case for its English books. “There are many authors who would want to translate and publish their works in English. To do this, we need to offer them a good bilingual publishing strategy, for which we need to improve our English publishing strategy,” states Seshadri.
In the past one year, NHM has become the biggest distributor for Lifco’s dictionaries and its published book ‘Rajini’s Punch Tantra’ has sold over 12,000 copies. With a 24-people team covering every district in Tamil Nadu, NHM has added stationary shops to its 2,500 outlets of its distribution network and decreased its operational inefficiencies. “Earlier, the cycle to collect money was more than 120 days. It now takes about 60 – 90 days and we hope to reduce it further,” says Seshadri. The company now also distributes books of other publishers, which has helped in augmenting its revenue. However, Seshadri has decided to stop its publication of Malayalam books. “Both English and Malayalam were giving us problems but we found the market for Malayalam books to be monopolised,” he adds. The company produced nearly 100 Malayalam titles but could not get them into most bookshops. Hence, it decided to focus on Tamil for now and perhaps enter the Telugu market later. But Malayalam still figures in NHM’s agenda of being present in about 10 languages.
However, NHM has been gaining ground in Sri Lanka for the past two years. From Rs. 10 lakh turnover in its first year, the Sri Lankan arm of the business now reaps Rs. 30 lakh and Seshadri sees more potential in expanding it further. Its plan of reaching out to schools has seen no breakthrough as yet due to NHM’s staffing problems. With no further additions to its team strength of about 90, the company is facing attrition in its sales department alone. “We need to revise salaries and ease the communication process. We still have a long way to go in terms of our HR,” he admits.
Plan of action
With 1,700 published titles behind it and 400 titles continuing to be good sellers, NHM has changed its earlier model of producing books every month and is instead focusing on bringing out more quality books since a base of older books is already present. “Previously, we had an imprint based model, where we brought out certain number of books on healthcare or religion. In 2012, we are preparing to bring out a set of 25 titles that will cover topics ranging from Tamil literature, history to science that many households will find useful,” shares Seshadri. Though the company is still undecided about its strategy for e-books, Seshadri is clear that e-books are the way to go. “We want to build revenue from publishing e-books and online commerce, so we want to make sure our books are present in all devices.” He is also planning to launch a Tamil monthly magazine with the start of trial issues this February. “It is a marketing strategy to get the word out. We will begin with 5,000 copies,” he says on a concluding note.
|Beacon India Private Equity Fund and Emergic Venture Capital were NHM’s earlier investors||Sridhar Vembu (Zoho Corporation) has invested in the past three months, buying out Beacon’s stake as well|
|Focussed on the widest display of books, going beyond bookshops with 2,500 outlets||Television, online sales, promotional events and tying up with companies have become its focus|
|Already established a solid distribution model covering every district in Tamil Nadu||Decreased its operational inefficiencies; distributes other publishers’ books as well|
|Imprint-based model on producing number of books every month catering to healthcare, religion etc.||Plans to bring out a set of 25 titles covering topics such as Tamil literature, science, history etc.|
|Problems plaguing its Malayalam market; Sri Lanka generates a turnover of Rs. 10L in its first year||Has stopped publication of Malayalam books; Increases its turnover to Rs. 30L from Sri Lanka|