ACK Media, a newly launched entertainment and education Company, recently made news by children’s media brands Amar Chitra Katha (founded in 1967, it’s the largest selling children’s publication) and Tinkle (a magazine) from India Book House (IBH). The company is co-founded by Samir Patil (right), an ex-McKinsey executive, and Shripal Morakhia, the founder of institutional broking and investment banking firm SSKI and retail broking outfit Sharekhan.
ACK is betting on a market of 300 million plus children in the age group 1 to 6 years. The Mumbai based company has plans to build an animation studio, besides venturing into digital and online space. It will invest $15-20 million in the business, and is also looking to raise capital in the future. The pre-teen entertainment space has been getting active with Mumbai-based IT and new media company Geodesic recentlythe Chandamama series, and also with the launch of Virgin Comics who plans to develop content across all media formats. ACK Media’s CEO Samir Patil talks to VC Circle on the recent acquisition and future plans. Excerpts:
How much have you acquired the Amar Chitra Katha and the Tinkle brands for?
We are still in the process of closing the papers, so we cannot disclose the actual acquisition price. But yes, we have acquired a majority (controlling) stake, well over 90 per cent. And we are investing to the tune of $15-20 million in times to come.
Is Shripal Morakhia an investor in the company?
Shripal Morakhia (founder of stock broking firms SSKI and Sharekhan) came in as an investor making the majority of investment. I assume the position of the CEO of the company, and Anant Pai would continue to stay as an editor.
What are the company’s future plans?
The company plans to expand in phases. The first phase entails establishing and acquiring some capabilities in developing original content and making them available in multiple formats including print, DVD, and in 500-plus retail stores that already carry ACK media offerings. Second, it will introduce new online services including an online store catering majorly to NRI audience and finally our strategy is to license and co-develop proprietary content for films, TV mobile and other emerging formats.
What is your business model?
Our business plan follows a three phase expansion model where in the first leg is to concentrate on the expansion through retail channels. Our print offerings such as the Amar Chitra Katha, and the Tinkle family of magazines will be made available across all stores, for instance, the megashops such as Crosswords and Landmark. There will be increased visibility in the form of animated DVDs and merchandising products made available across all markets. The second leg is our online offering, which is unique, with ACK online store, TinkleOnline.com and finally we plan to enter into licensing and syndication partnerships, for our animated proprietary characters. We are in talks with a couple of TV and film companies for the same. There will be mobile games and mobisodes based on the characters like “Suppandi” or “Shikari Shambhu”.
How do you plan to monetise the online offerings?
The ad-only supported model will not work for kids, the segment which we are targeting at. Our online revenue model is inspired by sites like webkinz where the kids communities are engaged in online gaming activities and are awarded with virtual currency as prizes, which can be exchanged for various Tinkle and ACK goods AND toys. This virtual currency can be bought for real money, also. This is primarily to tap the NRI market which has a significant interest in the Tinkle and ACK brands. I am very bullish on this unique online offering, DVD’s made available directly to home and promotion through mobile.
Will we see a Shrek with an Indian face? What are your animation plans?
Well, not really. ACK media is a “superbrand” by itself and we wish to leverage that across all markets and platforms, for there exists a market which wishes to see an Indianised fun experience. We are betting big on the 300 million plus children in the age group 1 to 6 years. A significant portion of our market is NRI. We are unique in the way we see it and position it. It is something on the lines of what FabIndia did earlier, packaged a truly Indian offering in a manner that it crossed all shores.
How do you plan to raise money to fund your expansion plans?
Initially, it is being borne through the recent investment that has happened. In six months from now, we may look at venture capital funding.
Do you plan to diversify yourself to other niche target segments also?
The fact that we have been mentioning kids of all sizes, we do have plans to cater to other niche segments too. With our focus area primarily on entertainment with the pre-teen segment, we wish to concentrate more on online educational offerings, maximizing utility behaviour for the teen section, and parents form our customer base indirectly, by influencing the buying decisions of kids.
Do you plan any retail formats?
No, this is not our practice area, and we don’t wish to get into it in the near future. With existing mega chains as Cross Words and Landmark, a Tinkle Store doesn’t seem to be a feasible proposition. And it entails a huge investment. But, we do see an increased visibility, where ACK media offerings will be made available in print, digital, merchandising (toys, games) across various retail stores-both big and small.