With 18 million users and more than 30,000 downloads per day, digital newsstand cum magazine store, Magzter’s annual growth rate is nearly 300 per cent. With its recent introduction of 10,000 book titles and the aim to take that number to one million book titles, Magzter is on its way to establishing itself as a one-stop reading destination in the digital world
DIVYA M. CHANDRAMOULI
As I walk through an interesting maze of cubicles encased by panes of glass (that I’m later told double up as white boards), the mood is more reminiscent of a gaming parlour than a completely functional office. There’s frenzied activity surrounding the foosball table as men and women dressed in black t-shirts talk animatedly amongst themselves. “This is just a typical Friday at Magzter, mind you, it’s certainly not a Black Friday. It so happens that our company t-shirt is printed in black,” quips Vijayakumar Radhakrishnan, co-founder and president, Magzter Inc. The newsstand cum digital magazine store which soon aims to be a one-stop reading destination, has no cause for depression, not when its user base has grown to 18 million and its daily downloads have risen to more than 30,000.
Today, the New York-based company offers over 3,500 magazines in 40 international languages, including certain niche publications that would otherwise be near impossible to find online. In the last few months, it has added more than 10,000 book titles and plans to take that number to over 1 million by the end of this fiscal (Jan 2014-Jan 2015). “What we want to be is the Youtube of this space. You think videos and you look up Youtube and we want to take our brand to the level where you think reading and look up Magzter,” says Girish Ramdas, co-founder and CEO, Magzter.
Nearly 25 per cent of the content on Apple’s newsstand is provided by us so we really do not view them as direct competition. – Vijayakumar Radhakrishnan, co-founder and president, Magzter.
What works for the company is that its technology is device agnostic unlike Apple or Google’s newsstand that is restricted to a single technology and device. Magzter’s application can be downloaded for free onto any device including smart phones. Its OREY (one click real-time everywhere) click publishing system allows publishers to upload content with a single click where the cloud software crunches the content to suit multi-device distribution. All of this in under 60 minutes. What’s interesting is that the company co-opts with the biggies and acts as an ‘aggregator for aggregators’, to quote Radhakrishnan. “Nearly 25 per cent of the content on Apple’s newsstand is provided by us so we really do not view them as direct competition,” he elaborates. While on the subject, Ramdas is quick to add that the likes of Samsung and other device manufacturers who are keen on creating a device app, approach Magzter to partner them on content aggregation.
What’s most unique about Magzter in the Indian context is its effort to bring vernacular publishers online. This is a huge hit with the Indian Diaspora that like staying in touch with their roots. Its multi-lingual focus sets Magzter apart from other aggregators who are unfamiliar with content produced in international languages and tend to focus on single geographies.
Where’s the money at?
At Magzter, the digital publishing platform is free to all publishers where there is a 50-50 revenue sharing agreement on sales. “We make all our money through subscriptions,” says Ramdas. However, that’s likely to change in the coming times as the company is looking at monetising content that is free to users. “We recently introduced free content in a bid to open up advertising opportunities,” shares Ramdas while demonstrating the dynamism of digital advertising on his tablet. Rolex, the luxury watch brand, has been impressed enough with the traction in its first month of advertising through Magzter that it has inked a deal for the remainder of the year. The company’s advertising to content ratio will be similar to what we see in print media today. Providing global publishers an additional means to advertising revenue wherein the advertisements in the online edition could differ from the offline edition is a seriously attractive proposition and the founding duo are aware of its draw.
Interestingly, Magzter has seen this success on nearly no advertising of its own. “We are very active on social media and even now, when our investors have a marketing mandate for us, we are likely to stick to a digital campaign. We think that targeted marketing would work best for us,” says Ramdas. The company is in favour of establishing a digital connect with prospective users and using the Internet to turn its existing users into loyalists. It’s very unlikely it will resort to mass media to spread the word, say the founders in unison. “We would rather use the money towards strengthening our product teams, enhancing consumer experience and our global expansion plans,” says Radhakrishnan. In December 2013, Magzter raised Series B funding to the tune of US $ 10 million. The round was led by a wholly-owned subsidiary of Singapore Press Holdings with participation from existing investor, Kalaari Capital which previously invested an undisclosed amount in the company in May 2012. A significant portion of this investment will be used to fuel Magzter’s global expansion into BRIC nations. “We currently have nine offices across the world and are looking to be operational in Sao Paolo (Brazil), Tokyo (Japan), Beijing (China) and Moscow (Russia) by this fiscal,” shares Ramdas. The idea is to create local teams that will represent Magzter to publishers in these regions.
While most startups struggle to build team strength, Magzter found this feat a lot less challenging, thanks to its founders’ previous entrepreneurial ventures. Prior to founding Magzter, Radhakrishnan ran a software engineering company called Network Technology Solutions while Ramdas ran another software company called Dot Com Infoway and the media portal, Galatta.com. “My company used to outsource projects to Vijay’s company for web clients and soon we merged the two companies to create a single entity in 2005,” says Ramdas. This was right up until Magzter’s inception in 2011, the duo was focused on creating apps for media and magazine content. It was then that they noticed a white space in this industry. With its head-quarters established in New York and a strong back-end in Chennai, the founding duo set about creating what they term a ‘truly global product’.
Significantly, the new company benefitted immensely from the apps creation team that the founders had previously set up. Despite this, Magzter had to scrap two prototypes before it launched a beta version. “While we had sound knowledge on app creation, we had to figure out how the different components talked to each other. We also needed to figure out the look and feel and we used Galatta’s content to experiment,” says Ramdas. In the last two years, Magzter has come a fair distance from where it started and the founders take great pride in maintaining a very low attrition rate. The foosball table, friendly work culture and flat organisational structure has a lot to do with that in addition to the fact that the company itself is seeing growth of nearly 300 per cent, year-on-year.
At Magzter, the one constant is innovation. “We’re always thinking of what we want to do next. At the moment, we’re trying to partner with airlines to take our app on board as they have a captive audience that we can reach out and we in turn, can help them with managing their weight limits,” shares Ramdas. He adds that digital libraries are also in the pipeline though here, it might take just a little longer to shake off the traditional mindset.
For countries such as India where smart phones enjoy better market penetration than tablets, Magzter is working on user-friendly formats, especially one that can help tap the Android user base. “It is challenging to replicate the look and feel of the app onto a smart phone format as the computing strength of these devices are much lower, but this is an area that we are definitely excited about,” says Radhakrishnan. Additionally, he shares that this is a certain growth driver in India where he sees magazine sales in the digital space going up to 30 per cent to 40 per cent of the print business over the next two years from the current rate of 5 per cent to 10 per cent.
As the afternoon chat draws to a close, I sneak in a question on revenue outlook and while neither founder was forthcoming with numbers, Radhakrishnan left me with this, “We have never focused on increasing revenues and even at our board meetings, we don’t discuss the numbers. We just work on increasing our user base and the numbers follow.”
Founders: Girish Ramdas and Vijayakumar Radhakrishnan
City: New York
USP: Aims to be a one-stop digital reading destination with an inventory of over 3,500 magazines and 10,000 books
Investors: Singapore Press Holdings, Kalaari Capital
MAGZTER IN NOS.
No of users: 18 million
No of daily downloads: 30,000
No of magazines on the platform: 3,500
No. of books on the platform: 10,000