Indian media knows its ABCDs 🔡

And some are playing it better than others

This is edition 336 of Beyond The First Order, a premium daily newsletter that demystifies the hidden models, incentives and consequences of the most significant events across India and Southeast Asia

A 🔒 paid newsletter that demystifies the hidden models, incentives and consequences of the most significant events across India and Southeast Asia. Someone sent you this? Subscribe to BFO

Good morning,

Sticking to basics always helps. IPO-bound Robinhood’s basic premise is keeping its retail investors happy. So it is using its own IPO to further democratise investing. Something Paytm may want to look into. India’s stock market regulator though has a very different idea on the basics of getting more people. Now, if you ask Indian media, they will tell you, it is those who got their ABCDs right who are winning the negotiation match with Google.

The ABCD of cracking digital news business

A- Astrology
B- Bollywood (or just any celebrity content)
C- Cricket
D- Devotion

These are the most-visited categories on Indian news websites any day.

It’s a formula developed by some of the country’s top ad-reliant publishers after years of SEO research. Industry insiders say it’s based on the school of thought that ‘medium is the message’ – the expression, coined by Canadian scholar Marshall McLuhan, is often interpreted to mean that the forms and methods used to communicate information often come to dictate what kind of messages they deliver.

It wasn’t long before the digital business heads of traditional publications realised simply copy-pasting the content from their newspapers wasn’t enough to crack the internet. If they were to attract more ad money, more traffic to the website was key. Soon enough, the ABCD formula was born—based on Google Trends—giving them some indication as to what content was in demand and what wasn’t. 

Gossip, annually refreshed pages about festivals, celebrity photos—all added to the fuel. “A single page visit to a photo gallery would often generate 80 page views for the website,” a former Times of India executive says.

“No publisher will tell you that they do ABCD content. They will be holier-than-thou,” they add.

But the moral aspect of this is not what I want to discuss. It’s about how years of ABCD content has become crucial now as an all-new stream of revenue is opening up for these publishers—Google News Showcase. 

Launched in India this May, it’s a multi-million licensing program that pays news publishers to feature their content prominently on the Google News platform. We published a detailed story on the topic yesterday, if you haven’t seen it already. 

A key formula used by Google to determine a payout is based on how much the entire Indian news industry generates for the search giant in ad revenue, and how much a certain publication contributes to it, sources say. 

Naturally, publishers which went by the ABCD formula have a higher leverage. That’s what came to Hindustan Times’ aid when it scored a deal in the range of Rs 30 crore (~US$4 million) per annum for three years—around 4X what The Hindu, which doesn’t have as much ABCD content, reportedly got. 

Times of India, which industry insiders described to have mastered the ABCD art, meanwhile is still in negotiations with Google, with talks delayed over a final figure amicable to both parties.

Closing talks surely can’t be as easy as ABC(D)?

Paytm could pick up a trick or two from Robinhood

Robinhood, the controversial US-based investment platform, changed the way people invest. By enabling a free platform. By gamifying investing. By ‘gifting’ free stocks as an incentive to users who referred other people to the platform. 

So it was only fair that it continued that ‘tradition’ of upending tradition when it came to its initial public offering (IPO), which it’ll launch this week. 

First, Robinhood decided that it would set aside as much as 35% of its shares that could be bought directly by the retail customers on its platform. Typically during IPOs, most companies pander to the big institutional investors, who’re considered to be the long-term keepers of shares. And only reserve ~2% of shares to the retail folks. By setting aside a third of its shares for the small investors, Robinhood is in effect saying, ‘listen, we don’t want only the pros to make money when the shares pop (rise) on the day we list on the stock exchange. You little folks have made us the giant we are today, so you deserve to own a larger part of this company.’ 

And on Saturday, it took things one step further. Robinhood decided to livestream a presentation about the company to everyone(!) Even the small retail investors. 

Again, that isn’t what companies typically do. Since the usual targets are the big banks and hedge funds, companies do elaborate road shows instead, wining and dining the executives at these firms to hype up the potential of the company during its IPO. (A couple of days ago, we wrote about how even for Indian foodtech Zomato’s IPO, investment bankers were paid the big bucks for hyping the company to these large institutional players. Zomato’s had allocated only 10% of its shares to retail investors. That’s the standard regulatory limit for a loss-making company going public in India.)

Anyway, by doing the presentation on a Saturday and not during the workweek, Robinhood is showing retail investors, the ones who’ve a 9-5 job but trade stocks on the side, that its priority is them. 

And while Zerodha, a platform in India that also democratised investing, isn’t going public anytime soon, fintech player Paytm* is (expectations are for an October listing). And it has its brokerage platform Paytm Money, which claims to have over 7 million users. Especially from the smaller cities and towns. 

Although Paytm is loss-making, and has to pander to the biggies to lap up its shares during the IPO, it could still use a playbook similar to Robinhood to drive its growth. Because even if it can only set aside 10% of its share to retail investors, its ‘users’ across its multiple businesses—payments, ecommerce, insurance, investing—are still the little guys. So by making that segment feel special, it doesn’t really lose out on anything. 

Special livestreams for the public, AMAs with the top executives of the company, meet-and-greet with the founder 🤷 . And maybe even something else. 

Companies sometimes have a special quota reserved for employees to buy shares at a discount during the IPO. While that option isn’t extended to customers, maybe Paytm can lobby the regulator for an extension of this to have a discounted quota for its most loyal customers by whatever metric they choose? 

It’s up to Paytm what it does to really drum up interest and subsequently its own growth over the next few months.

*Paytm founder Vijay Shekhar Sharma is an investor in The Ken

If you want to travel…

Mutual fund platforms get a little too mutual?

If you invest in mutual funds in India, what’s your go-to option for executing a transaction? 

  • Physical forms?
  • Directly on the fund house’s website?
  • Free online platforms like Groww, Kuvera?
  • Camsonline?
  • BSE Star?
  • MF Utility?

Investors are spoilt for choice.

Now, if the capital markets regulator Sebi has its way, there could be one more. 

On Monday evening, Sebi published a circular asking mutual fund companies and registrar and transfer agents (RTAs)—who process and maintain records of transactions—to band together and set up yet another ‘platform’ to be a one-stop solution for mutual fund related affairs. Primarily for executing stuff. And for free. The one thing the platform can’t do is dispense advice. That’s left to the licensed pros.

Sounds great. And at first glance, it sounds like a direct attack on all the intermediaries that enable execution. But as an investor, why should I really use this new platform? What’s so attractive? Based on the circular, nothing. It’s everything that’s already out there. And there’s no incentive for whoever is building this to really create an attractive and simple interface which users love. 

Here’s an edited excerpt of something we wrote in August 2020 (BFO#95) about all this disintermediation being attempted by the regulator.

First was the news that investors could soon directly access the stock exchanges to buy and sell mutual fund units. Then there were rumours that Direct Market Access (DMA) that did away with the intermediary a.k.a broker was in the works. But if you use platforms like Zerodha for investing, it’s because it’s free and offers a slick user experience. Along with their ecosystem of other financial products all integrated in one place. So, why would users make a switch from something that’s already free and offers a great experience?

A few years ago, the Association of Mutual Funds of India (Amfi) set up a similar free platform to make the lives of investors easier for executing mutual fund related transactions. The objective was exactly the same as the new one. It was called MF Utility (MFU). 

So, something on these lines already exists. And the former CEO of MFU doesn’t seem to find Sebi’s new circular quite appealing.

Couldn’t Sebi just have asked MFU to step up its game instead of mandating the creation of yet another platform?

That’s it for today.

Don’t forget to write in with your thoughts and observations on the reshaping of businesses, societies, and economies. We will be back tomorrow.

Stay safe,

PS: Yesterday, we asked parents of kids aged 3-14 how they and their children have coped during the pandemic. If you haven’t taken the survey already, we would love for you to take this completely anonymous three-minute survey. Click here.

Read the full edition. Sign up now.

Receive our premium newsletter, Beyond The First Order delivered to your inbox every weekday for the next 30 days.

If you’ve already signed up, just enter your email below or login using Facebook or Google

Recent Editions of Beyond The First Order


How often is Beyond The First Order published?

Five days a week. From Monday to Friday.

Do I need to login to the website to read the newsletter?

Nope. We send the day’s edition right to your inbox, where you can read it in full.

I have already paid for a subscription to The Ken. Do I need to pay separately to read this newsletter?

Nope. Paid, premium subscribers of The Ken get our newsletters delivered for free.

My corporate or campus has paid for a subscription to The Ken. Do I need to pay separately to read this newsletter?

Nope. You have complete access to our newsletters for free.

How do I pay to access your newsletters?

In two ways. You can buy a premium subscription to The Ken here which will give you access to all our stories and newsletters. Or you can purchase each newsletter for Rs. 99 or $2/month.

What modes of payment do you accept?

We accept all major international credit and debit cards. Your payment will automatically recur every month if your card supports it. You can stop this anytime from your Account section.

How are your newsletters different from your stories?

Our stories are typically long, originally reported, narrative and analytical in nature. Our newsletters are more timely and help you connect the dots on recent events.

I am a premium subscriber to The Ken but I am not receiving your newsletters. Can you help?

Sure. Just write to us at support at the-ken dot com. We’ll get this fixed.

Can I claim GST credit for this subscription?

Of course. Just enter the GST details during checkout, and you’ll get a GST invoice from us.