Deccan Chronicle: How the printing strategy went horribly wrong

By Rohin Dharmakumar and Pravin Palande

This is an excerpt of an article originally published in Forbes.

The presses-modern machines churning out tens of thousands of copies every hour with minimal human intervention-were the linchpin of Deccan’s growth strategy.

But the year 2010 brought with it the perfect storm for Deccan Chronicle’s business. First, the cost of printing a newspaper shot up due to increasing newsprint prices and a depreciating rupee. Second, the prolonged economic slowdown and uncertainty since 2010 caused most advertisers to tighten their purse strings.

[caption id=“attachment_444760” align=“alignleft” width=“380”]  AFP[/caption]

In hindsight, while many are saying Deccan Chronicle had it coming for years, fact is, till as recently as 2010 the company was considered a textbook example of how to run a modern newspaper business.

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Within a decade, it went from being primarily a one-city newspaper in 2000 with a circulation of roughly 150,000 copies and annual revenues of Rs 55 crore to nearly 10 times the circulation and roughly Rs 1,000 crore in revenue by 2010.

Along the way, it also bought or created numerous other businesses of which the two largest ones were Odyssey, a retail bookstore chain it acquired in 2005, and Deccan Chargers, an IPL cricket franchise it bid for and won in 2008.

Its share price kept appreciating, shooting from Rs 162 upon launch in December 2004 to Rs 900 in just over two years before going for a five-for-one split.

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Yet, behind the headlines and under the hood, its core business was slowly losing its edge over the last three-four years. Ironically, one of the reasons for that might have been Venkattram Reddy’s unshaken faith in his beloved printing presses.

You can read the entire Forbes article here.