Introducing MEDIANAMA: News & Analysis of Digital Media in India

Last Friday, my new digital media site – Medianama.com – went live with an interview with S. Sivakumar, the CEO designate for Times Private Treaties, the ads-for-equity investment arm of Bennett & Coleman Co Ltd (BCCL), which owns some of India’s largest media properties – the Times of India, Times Now, The Economic Times, Mumbai Mirror, Times OOH, Zoom TV, Femina, among others.

We raised a few contentious issues, focusing on what exactly Private Treaties brings to the table for startups, about investing in competitive businesses, whether editorial content is a part of the deal, and and whether they offer any strategic support at all. It was a long and consuming interview, and you can probably tell by the audio how involved both the interviewee and the interviewer (me) were.

For Medianama, it was an explosive large start – the kind I wasn’t expecting – and I think we’re now settling into the rhythm of analysing developments in the digital media business. A few things will emerge with time – we’ll try to offer significant perspective on the Digital Media industry, while also covering news, and we’ll offer an increased focus on certain domains that are still emerging. The reasoning behind an emerging segments focus: the deeper we dig, the more knowledge we’re able to share about these domains. In effect, we hope to help decision makers – entrepreneurs, investors, consultants and observers – understand the domain better.

It’s not been much of a break for me – Medianama has taken around 3 weeks of work. I worked till 9:30pm on my last day at CS, and finished off with a Yahoo vs T-Series story and the Sify earnings report. I don’t think I wanted a break anyway – I love this domain and love my work…staying away for these three weeks alone was difficult, as you probably gauged by a few posts that I did in the interim.

Medianama will continue to evolve as we go along, and if you have any suggestions, please do share at nikhil AT medianama DOT com.

For now, it’s back to work.

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An update…and another soon.

May 31st was my last day with ContentNext Media (and at contentSutra), and I’ve been on something of a sabbatical since. Expect an announcement from me soon. Have done a few posts on this blog – which just goes to show how difficult it is for me to take a break from blogging. contentSutra was an incredible experience for me – something of a roller coaster, and left me completely consumed by the digital media business. Love the space and am committed to being there. All credit to Rafat and Staci for giving an untried rookie so much freedom and responsibility. Rafat gave me the confidence to fight for stories that were deservedly mine, and Staci guided me through many-a-tricky situation. Still remember one of the first few mails from Rafat, where he ended with “Let’s blow this up big.” To some extent, I think we did.

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TenCent To Invest $7.5M In MIH India Over 3 Years; Can Acquire Upto 50 Pc Stake

MIH India Global Internet, the holding company for Indian Internet properties like ibibo.com, dwaar.com, onefamily.com, Newscola.com and bixee.com, and ad network AdWinks, has entered into an agreement to divest as much as 50 percent stake (less one share) to China based Tencent Holdings. Tencent, in turn, will invest at least $7.5 Million in MIH India over a period of three years, though it has the option of increasing that investment if needed. There are some conditions (of assuming certain loans) under which Tencent can increase its holding to 50 percent shareholding (minus one share).

Burn Rate: Take a look at the losses that MIH has suffered since launch:

Assuming that MIH started operations around August 2006, they’ve suffered a net loss of $18.947 Million in 23 months – an average loss of $1.114 Million (Rs. 4.76 Crores) per month. Some of that money has been spent on acquiring a 30 percent stake in ACL Wireless for $12.3 Million in July 2007, acquiring Bixee and Pixrat (for websites and a team of developers in Bangalore), developing products, allowing users to call each other for free, payouts to users as prizes, sponsoring TV shows like ibibo MTV Superstar and ibibo FTV Fashion Photographer.

Internal company transaction? This may be considered to be an internal company transaction, since the parent company of MIH India – Naspers, owns a 35.5 percent stake in TenCent. Interestingly, I’d heard murmurs of TenCent being in talks with MIH India around a year ago, but wasn’t able to verify. The deal didn’t appear to mean much then, since both are a part of Naspers portfolio.

More on valuation, Tencent’s agenda, and probable launches –

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Motorola Launches MOTOMUSIC In India With MOTOROKR E8

So almost six months after struggling handset manufacturer Motorola acquired online and mobile music distribution company Soundbuzz, Motorola has launched music distribution service MotoMusic in India. MotoMusic powers the MOTOROKR E8, two versions of which are priced at Rs. 15.455 and Rs. 13,999 respectively. The launch of MotoMusic is significant, since it comes before the launch of Nokia’s content service Ovi.

Value Chain: This is what the value chain looks like, with a handset manufacturer also becoming a content aggregator. This should, ideally, result in increasing efficiencies, and hence offer a greater margin to Motorola:

Pricing, Distribution and content partners:

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SatNav Raises $7 Million From Sequoia Capital India

SatNav Technologies has raised $7 million in a first round of funding from Sequoia Capital India. The amount of stake diluted has not been disclosed, though Mohit Bhatnagar, Operating Partner with Sequoia says that it’s a significant minority stake, and two members have joined the board. SatNav was incubated at Satyam Computers, under the Satyam Entrepreneur Incubation Program. Here’s a brief on the various players in the consumer GIS space (in no particular order):

ARPU and Projections: SatNav claims that it had revenues of around $1 million last fiscal, and 22000 users. That’s an ARPU of $45.5. They’re now targeting 2 lakh users by the end of this fiscal, and assuming an ARPU of $35, they should have revenues of $7 million by then; at least a 7x increase in revenues. Of course, this calculation depends on whether the numbers they’ve mentioned in the press are correct or not.

Burn Rate: FE reports that the funds should see SatNav through the next 12-18 months. That’s a burn rate of between $389,000 – $583,000 per month, or between Rs. 1.6 – 2.5 crores per month. Where will that money go?

For Products, Targets and BCCLs Private Treaty Legacy click

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PayMate Closes $9 million Round Of Funding From Mayfield, KPCB And Sherpalo Ventures

Mobile payments company Paymate announced (BS, ET) today that they had raised a second round of funding of $9 million. The funding has been led by Mayfield Fund, and Kleiner Perkins Caulfield and Byers (KPCB) and Ram Shriram’s Sherpalo Ventures have also returned as investors. Coruscant Tec co-founders Ajay Adiseshann and Probir Roy will retain majority stake. There are a couple of things to note here:

The timing of the announcement: There have been reports that the RBI will release guidelines for mobile payments on the 15th of June, and I’m told that there was a seminar in Mumbai last week focused on the implications of these yet-to-be released guidelines. KPCB and Sherpalo have a history of investing in companies, and announcing the funding the time is right, so it’s possible that Paymate received funding a while back, but with all the expected buzz around mobile payments, it’s a timely press release.
Where’s Citibank? Paymate had launched initially with Citibank on board, but if you go through their redesigned website, you’ll notice that Citibank isn’t a partner bank anymore. So while they added ABN Amro last month, and are in talks with SBI (India’s largest public sector bank), Paymate appears to have lost their first big banking partner. 11 banking partners are still on board, including Standard Chartered, Canara Bank, Cosmos Bank, HDFC (among India’s largest private sector banks), South Indian Bank, etc. Paymate also has operations in Sri Lanka, and a tie-up with Bank of Ceylon.
The Burn Rate: KPCB had put in $5 million in July 2006. Assuming that Paymate closed the second round of funding in May 2008 and would have finished off the first round by August 2008, that’s an approximate burn rate of $200,000 (around Rs. 80,00,000) per month. This appears to be set to go up – this round, says co-founder Probir Roy, is going to last them 18-24 months. That’s serious money – a burn rate of $375,000-$500,000 (1.5 crores – 2crores) per month. I wonder where Paymate intends to deploy it.

There has been talk before of mobile payments as means of banking the unbanked, but concerns have been raised about KYC (Know Your Customer) norms, since the scrutiny on mobile subscription is not as stringent as in case of banks. But mobile operators have not been keen on working independently of financial institutions because then the money would be shown in their accounts as revenue. Since operators pay a share of their revenue to the government as license fees – 10 to 12 percent – these transactions would lead to a significant increase in their payments. Hence, financial institutions need to be a part of the deal.

Paymate primarily focuses on SMS based payments, which is accessible to a larger number of users. Others in this space include Obopay, MChek, NGPay (from Jigrahak). Earlier this year Tyfone was funded by Ojas Venture Partners. What interests me more right now is the role that cash card companys will play in the mobile space, since they’re not connected with banks – Itz Cash is funded Matrix Partners and Intel Capital.

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Overwhelmed

Am utterly overwhelmed with tech issues of late….

PC: One hard disk went kaput recently, and I did a reinstall of the OS. Since then, the other hard disk has stopped working. Sometimes the PC just doesn’t load. The system appears to be overheating,and just shuts off sporadically.

Mobile: The screen of the N95 went black during one call. A problem with Nokia service centers is that they format the phone every time, so I’m likely to lose all contact information. Trying to back it up with a blank screen is a major ask.

Net Connection: Sometimes it works, sometimes it doesn’t…the MTNL connection is erratic. Apart from this, the Speed i get from the Reliance connection is not good enough.

Wifi: erratic, again.

Laptop: on a couple of occasions, it’s just switched off on its own. The other laptop has Vista, which makes it unusable.

problem is that much of this is happening at the same time. I tried replacing parts of the PC recently, but that hasn’t helped. The solution – will need to buy a brand new PC (with XP, and NOT Vista). No solution for Reliance and MTNL net connections, or the Wifi. Have to get the mobile fixed,and risk losing all the contacts on my phone. aargh – i should havebacked up more often

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The Budget and the next elections

Well, a rather surprising, albeit boring budget. PC’s gone ahead and tried to please everyone, perhaps at the cost of corporate India. The 6000 crore waiver to farmers sounds good on paper, but there’s apparently a fine-print. I’m not too worried about the cost to the government – after all, money is a flow and it will stay within the economy. But if they’re printing money to make up for the deficit, coupled with inflation fears – will lead to inflation. I suppose that explains why interest rates havcen’t been cut. The part I liked (apart from the tax sops) was the allocation of Rs. 75 crore to Tiger conservation – for setting up a Tiger Police force. I just hope some of that money is deployed instead of being siphoned off.

So this was an election budget, and there will be elections in the next fiscal. I still haven’t decided on whom to vote for: one thing is for sure, it’s definitely not the UPA or the Congress party. The problem is that there is no credible alternative to the Congress yet. I was discussing this with a friend last Saturday (yeah, my birthday), and he said it boils down to succession planning, which the BJP hasn’t done. Interestingly, now Mayavati’s BSP is gaining ground alarmingly fast. Ever since she took over power, Maya has stayed clear of controversy and focused on spreading her party beyond UP; what helps her is the mess that Mulayam Singh left in UP after his goondaraj ended. But the contrast is stark – while everyone else is talking regional – a hangover of coalition politics – Maya started talking national, like a statesman (or should that be statesperson?). Not that I’m a supporter, though – the splurging on her birthday are legendary…the thing I don’t understand about that – why the rabid media, and indeed the election commission and the vigilance bureau don’t question the financing of such excesses…

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On Juande Ramos at Spurs

There was an incident in a Tottenham game a few months ago, very shortly after Juande Ramos had taken over as the manager of the struggling team, that caught my attention. Soon after being substituted, midway through the second half of a successful game, a player (I don’t remember who) was walking straight into the dressing room. Ramos called him back, to watch the game to its conclusion, to watch his team win.
I haven’t been able to watch much football over the past couple of weeks, so I haven’t really been able to track the success of Spurs, but I’ve read and heard that Ramos has been fairly strict since he took over. They beat Arsenal and Chelsea to win their first Carling Cup in years. More on that, and Ramos here. Would love to read a story on how he’s managing the team – star footballers tend to have egos the size of the football field. Ramos’ statements after the win:

“The team has been improving little by little in the terms of the security and confidence that they feel. This final reaffirmed that. They have improved their general demeanour, like in the [recent] games against Arsenal and Manchester United, and Chelsea are another one of those teams, they are on the same level.They have shown they are able to concentrate, to fight with the best of them. The key was not making mistakes. They managed that…(On captain Ledley King) “This was the sort of game that it was very important that Ledley played in,” said Ramos. “He made a tremendous effort to be able to play. Having lost the last time he played in a final [the 2002 League Cup against Blackburn], this was a new experience for him and one which he deserved.”

Little by little. A team that rises too quickly, tends to peak. And then it’s all downhill. Better to build slowly and steadily, litte by little. Hope the success doesn’t go to Tottenham’s head — I don’t think it will, in case of Ramos.

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Events, Events

so, like I’d mentioned earlier, I intend to go for a lot more events this year (and finish work by 6:30ish every evening). Since I’ve been out of the events loop for a while now, please do CC/forward me any event related mails/invites (Jai: if you’re reading this, please do send the habitat newsletter). So far:

National School of Drama Theatre Fest
3rd-20th Jan
Venue: Kamani Auditorium, Sri Ram Center, Siri Fort Auditorium, LTG
Schedule: http://www.nsdtheatrefest.com/ (warning: heavy flash page…ugh)

There’s also a rock fest on – Yamaha Roxx on 12th and 13th at the Auto Expo, and a whole bunch of gigs sponsored by Jack Daniels in Delhi (see http://www.gigpad.com)

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