Company wants to be a billion dollar enterprise soon.
CHENNAI: In a short period of time, the US based company Magzter, run by two Indian founders, has become the world’s fastest growing cross-platform digital newsstand, selling magazines and books, with an app that gives consumers access to magazines from around the world at attractive prices.
Since its inception 18 months ago, Magzter has crossed six million users, with more than 1,500 magazines and working with more than 500 global publishers, helping them monetize their content across the digital world.
Magzter was formed by two technocrats, Girish Ramdas — who also is a sportsman of repute, having won six gold medals at national rifle shooting meets, and holds a national junior record which remains unbroken since 1994 — and Vijayakumar Radhakrishnan, who have wide experience in media and mobile applications.
Ramdas has more than 17 years experience in cross-platform publishing, including print, mobile, and web development. During this period, he has co-founded and run three successful start-up businesses. He was voted the CIOL Technology Person of the Year for 2012 for his contribution to the global digital publishing business.
Prior to Magzter, Ramdas managed operations for Dot Com Infoway (DCI) and Galatta Media. His duties included strategic marketing, partnership development, and monetizing content globally. DCI grew from a small team of three in 2000 to 300 by 2011 and was dealing with web, software and app development for clients globally.
Ramdas also co-founded South India’s largest entertainment portal www.galatta.com in 2000 and published South India’s first English language movie magazine in 2007. Both continue to grow exponentially based on the strong foundation set by him during his tenure there. He holds an engineering degree from the Anna University, Chennai.
Radhakrishnan entered the IT and media world as the founder & CEO of NTS, an IT services company offering integrated engineering solutions, design and development engineering, product testing, standards compliance and project management services to global clients.
NTS merged with Dot Com Infoway (DCI) in June 2005 and Radhakrishnan became the Chief Technology Officer of DCI. As CTO, he managed the IT team, monitoring small to large integrated projects, architecture for complex web, mobile and systems applications and executing internal IT audits for compliance with industry-expected standards. He also served as Chairman of SEPG for the CMMI process. In June 2008, he initiated the Mobile Application Development and Marketing wing of Dot Com Infoway, called DCI Mobile Studios, a leading mobile application developer in India, creating and marketing mobile apps for iPhone/iPad, Android & BlackBerry. DCI Mobile Studios has numerous successful, user-favorite apps under its belt, having developed and marketed business utility apps, entertainment apps, gaming apps, movie-related apps and eBook apps to name a few.
He holds a bachelor’s degree in computer science from Madras University and a master’s degree in management from the Birla Institute of Technology and Sciences, Pilani.
In an exclusive interview to The American Bazaar at their office in Chennai, Ramdas and Radhakrishnan discussed their company’s growth and future plans, including fund-raising to expand further, make it a billion dollar enterprise. Excerpts from the interview:
What made you enter the digital magazine store space?
We had a Galatta Express in print media and we wanted to sell them in digital form. Therefore, we started apps for this to suit Apple’s iPhone and once Android entered the space, we had another app. As we started having divergent platforms, we had to have separate apps. We felt the same issue will be faced by others in the print media. So, we thought we could provide apps that will benefit publishers to showcase their magazines in a digital format that can reach the globe in just 30 minutes.
What is the market value for this business?
We estimate the digital magazine store business as $100 billion market worldwide. We are an early entrant in this business and want to maintain the momentum and make a slice of our own share in this growing business.
Where are you placed now?
We are just 18-month old company and we have established ourselves as a leader in Asia. With this success, we want to take it globally and establish ourselves truly as a global leader in this form of business. We are looking into make Magzter a billion dollar company.
Also, if you look into the history, there are only few products globally conceived by the Indians and Magzter has catapulted itself to a prominent position within a short period of time. There are many service providers from India in the global map, but on a product scale, Magzter is the biggest one. We are a kind of path breaker or pioneer globally.
How does the Digital Magazine Store work?
A publisher of a magazine can approach us or we can approach a publisher to showcase their magazines on our digital platform, which is available globally. This, in turn, allows the buyers to buy the magazine either a single issue or multiple issues. A reader can buy the magazine in just 15 to 20 seconds from our platform.
What are the charges for a publisher?
There are no upfront charges. Just register with Magzter and we will market the magazine. Our business model is sharing of subscription revenue with the publishers. It is a single platform where a buyer can buy magazines from any part of the world.
What is the sharing proportion?
It is a 50:50 with the publishers. However, 30 percent will be paid to Apple if the apps is used from their gateway. In the case of Android, we have our own gateway and the payment is 10 percent to Android. The 50:50 subscription revenue sharing comes after making these payments.
What advantage does a publisher get?
Lot of advantages for not only publishers, even the advertisers stand to benefit. A publisher gets the magazine available globally in 30 minutes. All that a publisher needs to do is provide us the magazine with a PDF or E-pub format and we will convert it. In other words, provide us the magazine in a globally acceptable format. We will place the book in our platform within half an hour. This means there is no warehouse, no inventory and everything is virtual. Also, content is delivered as fast as possible to the global readers.
As far as benefits to advertisers, a reader can buy a product by simply clicking the product. For instance, a reader can order a particular product, say clothes or devices, without logging into a separate URL. Just a click, it can take you to the process of buying. In effect, we also promote e-commerce or online shopping for the advertisers. The digital store can become a one-stop shop for both magazines as well as online shopping.
So far how many magazines and publishers are there in Magzter?
We have already 1,500 magazines and 600 publishers showcasing their magazines in our platform. This will grow as we are expanding our reach globally. The beauty of this platform is there is no limit; we can add any number of magazines and books. For instance, if you visit a book shop, you can see only a limited number of publications; say 50 or 100 or 200 only depending upon the available space. Here, a reader or a buyer can view all the magazines in a single URL.
How many users are there now?
There are already six million users. We are adding 20 users a minute or one user per three seconds.
Are you providing a platform only for magazines, or newspapers too?
We are providing this to magazines only now and newspapers are not included. However, we are talking to several newswires to come on board. Hopefully, we will see some newswire on our digital store very soon.
Similarly, we shall be adding books to our digital store. An announcement will be made soon.
Yes. Tablets are being widely used in the schools in the US now. Therefore, making available books in the digital store is imperative. Moving ahead, with the technology becoming part of life, digital store will play a crucial role in allowing the students or readers to buy books digitally.
We also sell other books. This platform also helps small publishers to realize better sales as they don’t need to print to involve additional costs. In fact, their sales through digital are better than the physical one. For instance, if a physical recipe book has sold only 1000 copies, the same are sold about 2000 in digital store, mainly because of the visibility of such books for more buyers around the world.
Is the response for a magazine bigger from the home state or outside the country?
Our analysis points out that 75 percent of the subscribers are not home country or home state. This suggests that the digital store provide good opportunity to publishers’ to tap the untapped global market without spending. The readers can also access all the magazines around the world in digital store without having to go site after site and at the same time all over the place.
Your business model indicates that more smart device users are using the platform than the desktop users. In the last few quarters, China has replaced the U.S. as the largest smartphone market based on shipments. How do you plan to take it in China, where the smart devices growth is much faster than the U.S.?
In the US and the UK, English is the primary language and so there is not much market for a language magazine. Also, the adoption of technology in the US is faster. However, we have a game plan for China, where there is more languages spoken and written, like in India. There are two types of reading in China, namely, simplified and traditional. We have also got some magazines from China in our platform. We will be opening an office in Beijing soon to further expand our reach. Therefore, we are not ignoring any market, though there are many languages.
Are there any restrictions in China because of bilateral agreements?
Ours is a US based company with a subsidiary in India. Therefore, whatever is applicable to the US companies is applicable to us also. In any case, we are conscious of our responsibilities and we follow global policy on all searches. We don’t sell pornography in our digital store.
Additionally, we also have user or parental controls. This means that those aged above 12 can have access to articles and those below will not have access to articles, wherever such permission is needed.
Are there any restrictions on users’ device?
We allow the user to have family or friends sharing provided the buyer shares the user name and password. This allows five different devices to be used at the same time. For instance, I may be using smartphone, whereas my wife may read the same book using another device, say iPad.
Who is your target audience?
Global consumption is our target audience and the young generation, who are familiar with smart devices.
How did you fund your project?
Besides our own resources, Bangalore-based Kalaary Capital has invested $3 million.
How about your expansion plans?
We are already having our offices in New York, London, Singapore, and Chennai. We will soon be opening offices in Tokyo, Beijing, Cape Town, and Munich. This is to expand our business globally and reach out to more publishers.
Are you planning to get funding to expand your business?
Yes, we are planning to raise $15 million, mostly from the US-based venture capitalists. We need to invest in technology constantly to stay ahead. Our aim is to make Magzter a billion dollar company in 4-5 years.
How do you see your company in the near future?
We want to make Magzter the number one digital store globally. If you think of video, YouTube comes to anyone’s mind immediately. Similarly, if anyone thinks of reading, Magzter should come to mind. We are trying to redefine reading globally.
As far as the number of magazines or books is concerned, we would like Magzter to be a Walmart, where all the products are available. Similarly, in Magzter all magazines and books will be made available.
Do you plan to venture into other business or introduce your own content?
We would like to focus on our strength, domain knowledge on digital store. When we find there is more scope for expansion in digital store, we want to tap them fully. We don’t want to enter into providing our own content.
However, as part of our marketing plan, we shall be introducing pay per article to the readers rather than buying the entire magazine. For instance, if a buyer is interested in reading a particular author’s article in say, Readers Digest, a buyer can subscribe to that article and don’t need to pay for the entire book. This way, the publisher and the readers stand to gain.
Till we become a world leader in digital store, we don’t want to focus on anything else.