I thought it was a joke when I first heard about it. A newspaper publisher offering to take an equity stake in companies that wanted to advertise in the paper. But that's exactly what the Times of India (with a circulation of 2.4 million, the world's largest-selling English broadsheet daily; other publications in the group include the Economic Times, India's largest-selling business daily) is doing with something it calls Private Treaties. And it's not some secret backroom deal, either. It's all spelled out clearly on TimesPrivateTreaties.com (complete with a section labeled "Investment Philosopy" - that's not a typo on my part, as you can see above). Among the highlights of the "Why PT" section:
Private Treaties eases the cash flow constraints on a company to devote resources to its brand building initiatives. With the capital support provided through Treaty, a company can afford to take a long term strategic view of its market positioning. As a treaty partner, your company can also avail of a bouquet of professional expertise within the Private Treaties Department. Our three pronged solution encompasses:
- Advertising Support
- Branding Support
- Corporate image development
Some of our Private Treaty Partners for whom we have facilitated brand growth include Celebrity Fashions (Indian Terrain), Pantaloons, Shobha Developers, Deccan Aviation, Avesthagen, India Infoline, MCX, Videocon, Thyrocare, Sahara One, Paramount Airways, General Motors, Vishal Retail, Kuoni Travels being the notable ones!
Private Treaties provides the bandwidth to ad agencies and their client to work on media solutions that will create the right impact. We help remove budget constraints by sharing the risk of media spend of brand owners. Our own brand and media advisory team works closely with the media agency of our treaty partners. With our exposure to over 100 brands through Treaties, media agencies are welcome to leverage our experience to provide the best value to their clients.
Sucheta Dalal, a leading Indian business journalist, was among the first to write about Private Treaties (also see coverage of Private Treaties in Business Standard, a financial daily, and in Mint, the business daily edited by WSJ alum Raju Narisetti).
Given the economic success of the Times group, everything it does is watched closely by its competitors. But instead of being slammed far and wide for this Private Treaties business, some other media companies, it seems, are considering launching similar schemes.
To get a handle on this, I turned to one of the best observers of the international media scene, Salil Tripathi. He's a veteran journalist who's worked in India, East Asia, Europe and the U.S. and also one of the most prolific freelancers I know (turning out what seems like a dozen pieces a week). At the risk of annoying editors he has worked with at TOI, he provided his take on what he calls an "audacious, innovative and breathtaking" (he uses another adjective, too) business concept. Read his piece and reactions to it below (add your own, too - or e-mail them to saja[at]columbia.edu).
A Look at TOI's Private Treaties
By Salil Tripathi
Most serious and professional newspapers recognize the need to separate editorial and advertising. The Wall Street Journal goes further, separating fact and opinion. (So do other major US newspapers, but WSJ's distinctness stems from separate management structures for both. At the SAJA convention, New York Times editor, Bill Keller, said that the management structure of the edit page and news pages at the NYT too, were separate. Which is how it should be, but all newspapers don't have the luxury of such a roster of writers and management structures.
When editorial and advertising blend, the first casualty is credibility. A reader simply cannot know if a particular company, product, or an idea being promoted is because there's a mass base of support for it, or because some experts like it, or is it because of financial considerations.
The Times of India's new business concept, Private Treaties, is audacious, innovative, and breathtaking. And incredibly underwhelming. It trades advertising for equity in companies.
As described in its poorly-designed, shoddily-edited, and jargon-filled website, it creates intangible value for companies in which the TOI group has a stake, by highlighting its intangible qualities, through the medium of TOI's publications. If all that it means is a promotion restricted to discounted rates for advertising in the TOI, that would be simple enough, and acceptable to most purists in journalism. But with the Times you are never sure. in the past, it has encouraged its reporters to go on junkets to tourist resorts, and not always revealed the nature of the hospitality received.
When the Times group has launched its own businesses - such as music, entertainment, and so on - using prominent Indian performers, the newspaper's page 1 has to give way to stories about that event, as though it is the most talked about event in town, if not the only event in town. I recall in the mid-1990s, there were days of reporting on a modern ballet called Yes!, being staged under the choreography of my classmate from college in Bombay, the gifted dancer Shiamak Davar. The editor-in-chief would call senior Times editors to get hold of writers who'd say nice things about Yes! A tax raid on TOI's owners in the 1980s got barely a mention in the newspaper.
When things got tough, the Jain family's tax battles with the Indian government were cast as a human rights issue. A writer on the TOI edit page went on a junket with a European pharmaceutical company, and wrote an edit page piece extolling the medicine. Nothing wrong with a story about health on the TOI's edit page, but something was rotten in the state of Bori Bunder, if such a story appeared out of the blue, and no rival brand got similar coverage, or even comparison in that piece.
Then, the Times went the whole hog, with features like Impact and Spotlght, when news articles appeared on news pages, which were essentially advertisements.
When a plucky blog, Mediaah! ridiculed some of the practices at the Old Lady of Bori Bunder, the Times's legal eagles threatened to sue the website. Pradyuman Maheshwari, the spirited journalist who kept it
going, decided to close shop. . (It is, therefore, refreshing to see Times's Gautam Adhikari writing that his paper believes in publish-and-be-damned liberalism.
It is against this background that the Private Treaties are highly suspect. However much the Times might claim that it keeps editorial and advertising separate - when we know that's not really the case -
there will be an impact. A reporter chasing a story against a company in which the Times group has an equity stake will feel obliged to go softly. A reporter chasing a scandal involving a film star whose music
is marketed by the Times group, will view the release of the CD differently. It is so obvious, that it does not even need stating. A property scandal, or a scam, involving a company that advertises in
the newspaper may be problematic for some editors; how much more complicated it can get when the Times group has an equity stake in that company? And wouldn't the negative story drive down the value of
There are sound reasons why across the world, editors try to keep editorial and advertising separate, to enhance the credibility of the editorial matter. When I worked with a US-owned magazine (Far Eastern
Economic Review) and wrote an extensive piece on conflict of interest within some leading US investment banks, even though those banks were prominent advertisers in my magazine, at no stage did any editor tell me to go easy on that story. At the Dow Jones group, reporters cannot own stocks in companies they write about. Other major US papers have similar codes.
In my reporting days in Bombay in the 1980s, I've seen, with great dismay, financial reporters of several leading Indian dailies rushing out of a press conference where a company has declared its results, to make phone calls to their brokers to buy or sell shares (there were no cell phones then). Mint, the new business daily launched by the Hindustan Times group, has transparently placed its
code of conduct on the web. It also recently declared to its readers how it would publish advertorials, and how they would be distinct from edit pages, and how edit staff would not be involved in preparing them. (The International Herald Tribune and other American publications do likewise).
Unless the Times institutes similar safeguards, it would seem that Private Treaties marks another step in the journey the Times - "the leader that guards the reader" - has taken, transforming the nature of
In the late 1980s, the Times group had begun distributing promotional products in a plastic bag, together with the magazine, Illustrated Weekly of India, which the Times used to publish. We used
to throw those products away, preferring to read the magazine. Now the magazine is gone; the toothpaste remains.
Hopefully, the Times, in its drive to enhance the value of companies it invests in through this innovative mechanism, will also attach some value to its readers.
(Disclosure: I write frequently for Mint, and the Wall Street Journal's international editions; often for the International Herald Tribune, and on rare occasions for the Times of India. But this is not a case of sour grapes).
- Salil Tripathi, London
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