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.

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 -

Valuation: Two numbers are specifically mentioned: a $7.5 million investment, and a 50 percent stake. Some executives (update: industry reports as well) are implying that this indicates that MIH India is valued at as $15 million. One can’t comment on the valuation unless we know how much stake is being picked up for $7.5 million.

What’s in it for Tencent?: As per the filing, this deal is a part of a long term strategy from TenCent, to take strategic stakes companies in Asia. Tencent believes that India as a market is similar to China. Indirectly, this will also give Tencent a stake in mobile value added services company ACL Wireless, in which MIH India has a 30 percent stake.

Products Perhaps gaming might get a boost - with the QQ gaming portal. TenCent is also known for its multi-platform (mobile and Internet) instant messenger QQ, as well as mobile chat, Interactive Voice Response services.

Download the document (pdf) Tencent filed with the Hong Kong Stock Exchange

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:

Pricing: What are they thinking?: Really, what is the music labels, Motorola, Mobile Operators thinking? Who’s going to pay Rs. 19.99 per song, when most of the music is available cheaper on CDs. Digitial distribution is cheaper than audio cassettes. You’re offering the consumer the convenience of selecting his music, but with the same music available much cheaper openly on P2P networks and grey markets, Rs. 19.99 per song is really pushing it. Give them an affordable option of Rs. 5 per song, and they’re more likely to pay.

Payment Method: An interesting addition is the Music Card (details), which allows users to Buy and Gift users a Music Card for purchasing music. The denominations are from Rs. 50-500. Uhh…which a minimum amount of Rs. 50, I guess one can buy 2.5 songs (at Rs. 19.99/song). If you’re buying these cards online, then you’ll have to pay by credit card. We’ve got no information on offline distribution.

Soundbuzz India? Motorola completed the acquisition of Soundbuzz in February, and I half expected Soundbuzz India to redirect to MotoMusic. However, Soundbuzz is still around, and it’s MotoMusic that is all Soundbuzz: apart from the colours, MotoMusic India is a mirror of Soundbuzz.

Content Partners: No announcement here yet, but those mentioned on Soundbuzz’ website include EMI, Warner Music, Sony-BMG, Universal Music, and Saregama, Tips, Venus, Inreco and T-Series in India. Do keep in mind that Inreco is the label owned by former SIMCa Joint Secretary Saha. Other partners mentioned include Indiatimes, Bharti/Airtel and TATA-VSNL in India. Prior to being acquired by Motorola, Soundbuzz had a content basket of 750,000 songs, and had plans to launch a DRM free store.

Dual Delivery and DRM Free? Soundbuzz had a dual delivery service for music, where tracks were both sent to mobile, and emailed to users (in case they lost the mobile version). We’re not sure if they have plans to launch the same service here, or even if they intend to launch a DRM free store which they had earlier announced.

Will it work?: I doubt it. Launching it as a handset independent service would have made sense. Users hate walled gardens, and this is just another one of those.

[Release]

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

Products: SatNav has a map site called RoadsofIndia, a PDA software SatGuide and a Personal Navigation Device. Pricing details here. SatGuide offers voice prompts in 8 languages: Bengali, Gujarati, Hindi, Kannada, Marathi, Oriya, Tamil, Telugu and English. The other significant player in this market is MapMyIndia, with funding from Nexus India Capital, and the KPCB & Sherpalo Ventures combine.

Putting the money to use: for marketing, to increase the customer base, as well as for increasing the number of cities covered by the maps to 72 from 40. RoadsofIndia.com needs a lot of work. I wonder if SatNav will work as an infrastructure player - just providing their data for others to build on - for mashups and location based services. If you notice, RouteGuru is providing their services as a mashup on Google Maps.

BCCL Exits? I don’t think so: BCCL had taken a Private Treaty stake in SatNav, and the funding story in ET has no disclosure of BCCLs initial investment, or whether they have exited. I would be surprised if they have, since the GIS is yet to take off, and the private treaty deals usually involve advertising/editorial space for inventory.

[Release]

The fact is that for sites in the Info Edge, Consim Info and TBSL portfolio, advertising remains a fairly small percentage of revenues: for Info Edge, two quarters ago, it was less than 5 percent of overall revenues. Even assuming that it is now 6 percent of total revenues for the Q4 2008, that’s a maximum of Rs. 4.14 crores. Compare this to Rediff’s online advertising revenues (pdf)of around Rs. 22 crores in the quarter. Frankly, a 42 percent increase in Info Edge’s ad revenues, or a 200 percent increase in Consim Info’s ad revenues doesn’t mean much if the base is low.

For classifieds businesses, there’s better ROI in advertising some of their own services to increase usage. For example, a TimesJobs is more likely to prefer advertising a special package of jobs in, say, Hewlett Packard, as a relationship building exercise with a client, because the returns are greater in the long term, instead of putting up an advert for Sunsilk or BigAdda. Classifieds businesses mostly use Adsense. Horizontals have an ad-sales team, and also use adsense for extra inventory; ergo Classifieds and horizontals aren’t a like-for-like comparison.

The bigger competition is from other content-based Internet conglomerates like Web18, though their collection of sites can well be likened to a horizontal. Then there are other horizontal portals like Yahoo, AOL and MSN. Bear in mind that these sites have a significant online marketing budget, and are able to draw in traffic using search marketing. Then they sell advertising based on these numbers, and make the margin. Since Yahoo India’s revenues have grown 100 percent y-o-y for the last five years, there clearly isn’t a case for verticals taking away advertising from horizontals.

P.s.: The story also quotes Comscore numbers, which I have debunked here. Talk to any of the Internet co’s and they’ll tell you that Comscore numbers are not in line with their internal stats. Also, the term Internet Conglomerates was coined by Outlook Business.

Disclosure: I own an inconsequential number of shares in Info Edge and Network18

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.

You might find them useful, but follow these at your risk entirely, preferably in consultation with a doctor/physician. I’m using these guidelines at my own risk.

1. Take frequent breaks, at least every 15 minutes. www.workrave.com is a free software for reminders and exercise. You’ll have to reset the reminder time in workrave from 3 minutes to 15 minutes (or whatever you want). Don’t forget to disable the “Skip” option (which is very tempting).

2. The Chair: is probably the most important element of your office setup - get a cheap table, but get an adjustable chair even if expensive. The features of the chair that I bought (photo attached)

* Back can be raised, so great middle back support
* The arms of the chair can be raised - this was critical for me since my shoulders have been in great pain. My arms used to be suspended while typing, which puts pressure on the shoulder joint and neck
* Neck support - my neck leans forward while typing, so cervical spondolysis can become an issue
* Height of the seat is adjustable, so my legs are bent at 90 degrees or more. less than 90 degrees is not recommended

What’s not there in this chair, but is available in other models:

* Lower back not adjustable
* The seat base cannot be moved forward
* The arms cannot be rotated or pushed forward

Keep in mind:

* No such thing as a perfect chair (in this case, the neck support isn’t perfect, so I place a cushion
* You need a chair with a straight back. So chairs you sink into are not recommended, neither are chairs that arch your back backwards.

3. The Table:

* The monitor screen needs to be placed at eye level, else one tends to lean forward while typing. This can cause back and neck problems. I’ve raised the height of my monitor. Ideally, don’t use laptops.
* Elbows need support, and should ideally be at 90 degrees. I’ve had the height of my keyboard drawer/rest and mouse drawer/rest on my table adjusted accordingly, and the chair has adjustable sides

4. Mouse: your wrist should not be cocked up while using the mouse, so keep some kind of a rest under the wrist. Also, the slimmer the mouse, the less your wrist is cocked up.

5. Laptop?

* Preferably not. Usually, the keyboards are smaller, and touch pads need you to sustain pressure on them for using. Also, since either the keyboard will be raised or the monitor will not be at eye level, somethings bound to give in the long term
* Solution: when at home, connect laptop to an external monitor, and use a USB keyboard and a USB mouse. These are not very expensive, and very very useful

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