There is a storm all over Gujarat over the entry of Divya Bhaskar launched by Dainik Bhaskar. It has led to strong reactions from the Gujarati newspaper majors. While 80-year-old Gujarati newspaper Sandesh reduced its cover price to prevent any drop in circulation, Gujarat Samachar is spending over a crore of rupees every month on ‘Mala Maal Dhamaka’ offer to negate any impact of competition. On June 22, Divya Bhaskar was launched with a confirmed circulation of 452,150 copies. Following this, Sandesh reduced its price to Rs. 1.50. Explaining the reason, Falgun Patel, CMD, Sandesh, said: "The simple reason behind slashing the price to Rs. 1.50, that too on the day of the launch of Divya Bhaskar was to seal any possible pocket in which Divya Bhaskar can make a dent." Gujarat Samachar, with its ‘Mala Maal Dhamaka’ offers assured gifts to its readers. "The scheme is worth a little over rupees one crore a month, the total number of prizes are 8,000 with a luxury car as its first prize. And it will carry on for at least another four months," says B. B. Shah of Gujarat Samachar. Divya Bhaskar which now claims a circulation of 452,150 copies, had offered its newspaper at Rs. 1.50 with one year rate freeze. It has about 16-18 pages in colour. In comparison, Sandesh has, on an average, 4-6 pages in colour every day. But Patel added: "Very shortly we will be giving our readers 12 pages in colour." Sandesh too has a supplement every day on various subjects. Responds, B. B. Shah of Gujarat Samachar: "There are 6 colour pages in the main issue of Ahmedabad including the front, back and sports pages. We also have 14 colour magazines/supplements running across Monday to Saturday."

But did Sandesh’s strategy of blocking the entry of Divya Bhaskar at the price point of Rs. 1.50 work? Interaction with few key vendors in Gujarat revealed that Sandesh is losing heavily on the number of copies sold. But the newspaper says: "This is absolutely wrong information. Sandesh has not lost any of its circulation."

While the newspaper majors slug it out, who will be the winner? Well, no points for guessing that it is the reader who will get the best of content and in the best packaging possible, at the best price.

The Supreme Court quashed the orders of the Madhya Pradesh High Court in the Dainik Bhaskar title dispute case in the favour of M/s Dwaraka Prasad Agrawal & Brothers and asked the concerned authorities to restore the status quo that existed on June 29, 1992.

Hemalata Agrawal, who is a daughter of the late Dwaraka Prasad, and also a partner in the firm, expressed satisfaction over the judgement at a press conference in New Delhi last week, and said: "I hope that the judgement of the Supreme Court will be duly implemented in letter and spirit and soon the Registrar of Newspapers in India and the concerned District Magistrate will take suitable and prompt action in the matter."

Dainik Bhaskar was established by Dwarka Prasad Agrawal in 1958 but it was taken over by his son Ramesh Chandra Agrawal and his uncle Bishambar Dayal Aggarwal in 1992 using "fraudulent means" and without the consent of the actual owner, Dwarka Prasad. Following this Dainik Bhaskar was transferred to Writers and Publishers Ltd, a company owned by Ramesh Agrawal. The Supreme Court has now restored the ownership to M/s Dwarka Prasad Agrawal. and Bros.

The story of the newspaper war in Gujarat interestingly finds an echo in distant Taiwan. With the entry of Apple Daily, suggest newspaper reports, Taiwan’s leading, three Chinese-language newspapers: China Times, United Daily News and Liberty Times have cut retail prices and kicked off major promotions to stave off the competition.

It all started when Apple Daily entered the market with sensational gossip stories, flashy colour pictures and a price tag of NT $ 5. Other newspapers, selling at NT $10 and 15 decided to fight fire with fire. The China Times retail and subscription price were reduced from NT $15 to NT $10 beginning May 1," says Albert Yu, Chairman, China Times News Group. The United Daily News, too followed suit.

The third newspaper major of Taiwan, Liberty Times, which retails for NT $10, plans to give away NT $200 million in prizes, including cars and household appliances, to attract new subscribers. Even with these strategies in place, media experts are of the opinion that Apple Daily may soon grab 10 to 15 per cent share of the 2.5 million-market.

There was too much of hype of the FM industry some days ago all over the top cities in India. But now the scenario has changed. According to an industry analysis by the Confederation of Indian Industry (CII) of the six private radio operators in India, combined losses amount to Rs. 120 crore for the year ending March 2003. ‘Radio Mirchi’ was the biggest loser with Rs. 47.9 crore; ‘Radio City’ was Rs. 32.1 crore in the red and considering closing down operations in Lucknow. ‘Win’ has gone off-air on May 27, 2003 after sustaining losses of Rs. 14.3 crore; close on its heels are ‘Red FM’ suffering a loss of Rs. 13.8 crore and ‘Go’ at Rs. 13.4 crore. The figures of losses incurred by ‘Surya’ in Chennai are not available. Comments Sumantro Dutta, COO. Radio City: "The scenario has been grim for some time. We have made all our representations to the Information and Broadcasting Ministry (I&B). But there has to be a go-forward scenario in terms of moving to the revenue-sharing model. My prediction is that if this grim situation continues, all the stations will shut down." According to the CII analysis, the problems of the operators have been compounded by their inability to start operations and a weak advertising market. In the first year of operations (2002-03), of the total expenditure of Rs. 169 crore (including Rs. 31.35 crore on account of depreciation and interest loss on capital employed), private radio companies generated revenues of only Rs. 48.10 crore leaving a deficit of over Rs. 120 crore, whereas television channels in the same period are estimated to have made around Rs. 3,750 crore. In Mumbai alone, the five private FM stations have spent around Rs. 80 crore in the past one year but they made only Rs. 26 crore from advertising. The main problem is that they paid Rs. 48 crore as licence fee. FM operators reckon they could break even in about two years if the government dropped the licence fee and substituted it with a revenue-sharing model. Other costs include the roughly Rs. 660 an hour that is needed to buy music rights. This state of affairs has been compounded by low advertising revenues. The current ad spend on radio accounts forms less than 1 per cent of the country’s total ad pie of Rs. 8,600 crore. While the global average is about 4-5 per cent of total advertising going to radio in value terms, it is as high as 20 per cent in countries such as Sri Lanka; total advertising on over 6,000 radio stations in the U. S. A. added up to $ 3.2 billion .According to the CII study, although the government is planning to shift to the revenue sharing regime instead of bidding in the second round of licensing, a formal decision has not been taken yet.

The government is already embroiled in court cases on radio privatisation. So the government is wary of rushing into any new arrangement, as it is not too clear how the new arrangements will come into effect on a retrospective basis. However, one option the I&B ministry thinks is viable is the legal exit route for FM operators. This would involve their vacating their radio slots and terminating their contracts with the government—they would be free to bid again for licences.