News Corp, the world’s fourth largest media group, has been making some serious investments in India over the past year. The company has picked up stakes in Indian digital media players like VCCircle, PropTiger.com and BigDecisions.com. Nandagopal Rajan speaks to Raju Narisetti (Senior Vice President, Strategy, News Corp) who has been instrumental in these investments on the company’s plans for India and the scope of digital media in the country. Edited excerpts:
You have recently spoken about New Corp’s Mansion Global project. Is PropTiger.com going to be a similar kind of play?
We are the largest shareholder in PropTiger. We initially got 25 per cent and now have just over 30 per cent. But it is not a News Corp company. We have invested in an existing company and business model. Most of the property sites across the world are in the realtor/broker space, but in India we have decided to go in the primary homes space with PropTiger. Part of the reason was that in India, brokers are not regulated. They don’t solve a lot of problems and there is a lot of bait and switch.
I looked around quite a bit and decided that PropTiger was the right business for us to get into as it was a long term play. As a strategic investor I am not looking at paper valuation or an exit, we are looking at a business model that played into the Indian macro housing requirements. But PropTiger has an end to end play now as they have since invested in Makaan for listings.
If you look at the real estate segment with a 20-30 year horizon, the fundamentals of India’s demographics are not going away and we are playing into that. I am looking to build the business and grow it with the founders. The fact is that it could take us a while and there will be some up and down cycles, but we are willing to have a long term view of brand building. We have historically had a very strong real estate business.
But why would a news company be in the real estate business?
Most of us in the news business used to have a lot of revenue streams in terms of real estate and job listings, travel, cars etc. But they slowly started going away and became digital only and transactional. We in our wisdom at that time tried to hang on to it. But in the last couple of years, these companies have discovered that if they only rely on transactions, customer engagement will be very infrequent and building loyalty and retaining customers will be very expensive. For example, in the US a real estate transaction company talks to a customer once in seven years. Try to imagine keeping them engaged for that long. So these companies have discovered that the best way to keep them engaged is to give them tools and a lot of content around the neighbourhood, transportation, safety and the like.
We have a lot of strong real estate content, very strong B2B relationships and a huge funnel of audiences. We also know how to monetise as we have had the subscription model in WSJ for long. The only thing missing was the transaction capabilities. So the thinking is to reacquire the transaction capabilities. PropTiger, for instance, produces a lot of content now.
Is there an issue with trust in the real estate business in India?
None of the existing players were solving the trust issue as they were making money off the brokers. But PropTiger, while listing properties from a developer, will also tell you the average time taken by him to deliver. And hence there is a lot more transparency.
News Corp’s view in markets like India is that we can help level the information playing field between the haves and the have-nots and build trust, in the long term you will make money. Which is why we acquired a two-person company called BigDecisions.com, as most of us will be making a lot of big decisions online in the coming years.
Does News Corp have a time frame for success in India?
Because we are not here to build up paper valuation for a bunch of people to exit we are comfortable building the business. But from a pure transaction point of view, PropTiger is already in the top 3. A lot of the listing business does not lead to transactions, but the real revenue is in people actually buying homes.
But I think there is going to be a lot of consolidation in this space because there are too many players, some of them purely financial players. Our view is that India is unlikely to be a winner-takes-all business as there are too many geographical complexities and we could be one of the big players. The Indian investments we have made recently are financially insignificant, but strategically very important for us.
Is there a plan to bring a Mansion Global model to India?
Yes, Mansion Global will soon have high-end Indian homes powered by PropTiger.
What about VCCircle?
It is one of those rare content businesses in India where 10 years ago they believed and then followed through on something that has five revenue streams — advertising, subscriptions, database, events and training. For us it was a natural fit, hopefully we will scale that up.
What is your take on the news startup scene in India?
It is interesting and attractive in many ways — from the sheer number of news consumers and the fact that most of it is in English. But I am seeing zero innovation around business models. Everything is advertising based and even there I am not seeing any innovation. I am very sceptical this business model will work, because it hasn’t worked anywhere. As a business I have not looked at anything and thought that was compelling.