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"Frederick Noronha [फ़रेदरिक नोरोनया]" <[log in to unmask]>
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Frederick Noronha [फ़रेदरिक नोरोनया]" <[log in to unmask]>
Fri, 2 May 2008 03:15:31 +0530
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INDIA: Robust growth and a loss of diversity

 IFJ's South Asia Press Freedom Report for 2007-08.
 Released on May 1 http://www.ifj-asia.org

 India's media grew robustly
 over the year under review.
 Concerns about diversity and
 choice, however, remained
 high. Firm estimates on
 concentration of ownership
 and control in the media
 cannot be made in the
 absence of reliable statistics.

 The greatest malaise of the Indian media may well be a lack
 of transparency. Even so, it seems that the quantitative
 growth of the media in India has been accompanied by a
 qualitative deterioration and a loss of diversity.

 There has been little to suggest an improvement in the
 conditions of employment of journalists and other workers in
 the regulated sector, where the Indian Working Journalists'
 and Other Newspaper Employees' (Conditions of Service) Act
 apply. Two wage boards were created for media workers
 (nominally separate institutions for journalists and other
 newspaper employees, although under the same chairman) in May
 2007. The boards' deliberations and sittings have been
 sporadic; the terms of reference are not clearly defined; and
 there are ample opportunities within the constitution of the
 boards allowing for obstructive tactics. At the current
 writing, it seems likely that the wage boards could announce
 interim awards by early May 2008. However, the timing of
 these formal notifications and the extent to which they will
 be honoured remain moot points.

 Growth has been very rapid in the unregulated sector, and the
 competition among rival companies for scarce skills has
 perhaps led to improved wages. There is no basis for making a
 firm judgment here, in the absence of a centralised reporting
 and monitoring system. Employment conditions, however, are
 governed in the main by short-term contracts. And rapid
 personnel turnover has been a feature of the pattern of
 growth in this sector of the media.

 Media industry a star performer

 According to an estimate made by a leading business lobby,
 the Federation of Indian Chambers of Commerce and Industry
 (FICCI), revenues of the media and entertainment industry
 grew by 17 per cent in 2007, to touch an aggregate figure of
 INR (Indian rupees) 500 billion (about US$12.5 billion). This
 estimate places the revenue from advertising at INR 196
 billion, or just over 38 per cent of the total industry

 Subscriptions in the Indian media industry recover even less
 of the production and operational costs than counterparts
 elsewhere. Growth prospects, in this sense, depend
 significantly on the growth of advertising spending in the
 economy. There have been conflicting estimates of
 advertisement revenue growth. While the FICCI study puts the
 growth of advertising revenue at 22 per cent for 2007, a
 similar exercise by a leading advertising and market research
 firm puts it at a more modest 3 per cent. The latter figure
 points to a more difficult situation ahead for India's media
 industry. There is considerable anxiety that the sliding
 profits reported by the Indian corporate sector and the
 contagion effects of economic woes in the United States could
 lead to significant cuts in advertising spending. This could
 have adverse consequences for the fortunes of the Indian
 media. The surface reality is of a huge proliferation in the
 media. New newspapers have been launched over the year under
 review, many of them by major media groups.

 Main Issues

 * Concentration of media ownership
 * Stagnant working conditions
 * Dysfunctional regulatory systems
 * Competition and private equity
 * Uncertain standards on free speech right
 * Codes of conduct and self-regulation

 Investigative journalism fettered: Outside India's Supreme
 Court, three journalists and the publisher of Midday speak
 out against their conviction for 'contempt of court'. Right,
 Delhi Union of Journalists and other organisations protested
 against the judicial ruling. Photos: Courtesy of Midday

 Several new radio channels have started up under the third
 phase of the FM broadcast licensing process. According to
 the most recent statistics, 350 television channels are on
 air, with another 100 slated for launch in the near future.

 Foreign investor interest in India's media remained high. The
 US-based media conglomerate NBC Universal announced plans to
 acquire a 26 per cent stake in NDTV Networks, a holding
 company for broadcasters in the lifestyle and fashion
 segment, related through interlocking equity ownership with
 NDTV 24x7, an English-language news broadcaster, and its
 Hindi-language counterpart, NDTV India.

 Global Broadcast News (GBN), which runs several television
 channels, has similarly, announced plans to raise INR 8
 billion to fund an aggressive move into regional language
 broadcast and print media. This venture will be executed in
 partnership with the global media giant Viacom, which is
 already a 50 per cent equity owner in a partner organisation
 of GBN.

 Diligent Media Corporation (DMC), a joint venture between
 India's top Hindi-language broadcaster and second-ranked
 print organisation, already has an English newspaper presence
 in four major cities in the western region. It has now
 announced plans for business dailies in Hindi for several
 smaller towns in the same region. It also is reported to be
 making aggressive takeover bids for major newspapers in
 Nagpur, Bangalore and Thiruvananthapuram. In part, the
 expansion and takeover projects, will be financed through the
 sale of a major equity stake in the company to a foreign
 institutional investor.

 Big corporate houses, both Indian and multinational, have
 been increasingly making their presence felt in the media
 sector. Reliance-Anil Dhirubhai Ambani Group, one of India's
 largest corporate houses, has expanded its presence in FM and
 announced plans to enter television broadcasting with perhaps
 20 channels.

 India's media has grown faster and more visibly than other
 sectors of a rapidly growing economy. Yet, unlike other
 sectors, investment rules and norms in the media remain
 opaque and often subject to abuse.

 Murky investment rules and norms

 In February 2008, eight journalists from NewsX, a news
 channel that was then yet to be launched, resigned after a
 dispute with the ownership of the holding company. The
 episode involved public mud-slinging and allegations of
 journalists being wrongfully confined and forced to submit
 resignation letters.

 A delegation of concerned journalists subsequently went to
 the Minister for Information and Broadcasting in the Union
 Government, seeking an investigation into the financial
 sources of the company. While declining to intrude into what
 he called 'internal financial matters' at the broadcasting
 company, the Minister urged that all clauses of the
 journalists' job contracts be honoured. The financial aspects
 were referred to the investigative arm of the Union
 Government's Finance Ministry.

 When all else is said and the rights and wrongs determined,
 the immediate verdict that can be offered is that the NewsX
 episode did not inspire great confidence in the rules of the
 media game as it is played in India. If anything, the
 journalists' recourse to the Government as a dispute
 settlement authority, and the concerned Minister's
 protestations that he had no authority over investment norms
 in the broadcast sector, pointed to a seriously dysfunctional
 regulatory system for the broadcast media.

 At another level, the Union Government has seemed excessively
 diligent in scrutinising and holding up a proposal for a
 private equity firm's investment in the Eenadu media group in
 Andhra Pradesh. It has been hard to avoid the suspicion of
 strong political motivations, since the media group concerned
 has been a major backer of the political party that happens
 now to be in opposition at both levels: state and union.

 Since the state government in Andhra Pradesh changed hands in
 2004, an investigation was launched into Margadarsi, a
 financial company under the same ownership as the Eenadu
 media group. Figures uncovered by an independent audit of the
 finance company suggested a pyramid scheme, and possible
 difficulties in redeeming all the deposits the company had
 gathered. India's Supreme Court intervened to mandate a
 scheme for the company to redeem depositor funds as they fell

 With the fundamentals of the finance company being declared
 unsound by credible external evaluators, an ambiguous
 situation arose with respect to the media freedom
 implications of the state government's actions. The matter
 seemed to underline a critical issue for the Indian media:
 the need to maintain a relatively transparent ownership and
 financial structure and for other companies under the same
 ownership to maintain an arms-length relationship with the
 media interests.

 The Eenadu group has sought a way out of its financial
 travails by offloading shares to the private equity (PE)
 group Blackstone. The US$275 million (about INR 11 billion)
 that it hopes to raise from the sale of equity is, by its own
 admission, destined to bail out the Margadarsi finance
 company. These plans have putatively awakened concerns in the
 ruling party in the state about interlocking interests
 between media and other companies.

 In particular, one member of the Indian parliament from the
 state of Andhra Pradesh has been responsible for blocking
 approval of the PE deal on the grounds that a media company
 raising finance through this route should not be at liberty
 to divert funds to non-media interests.

 India's media has grown faster and more visibly than other
 sectors of a rapidly growing economy. Yet, unlike other
 sectors, investment rules and norms in the media remain
 opaque and often subject to abuse.

 Regulatory vacuum

 In the absence of a transparent regulatory framework,
 interpretations of what is right and wrong with the media
 often come down to contingent political interests. Cross-
 media ownership and the sale of media industry equity to
 foreign PE enterprises, which have been looked upon with
 relative equanimity in other contexts, are considered a
 matter of vital principle in the case of the Eenadu group.

 In February 2008, the Telecom Regulatory Authority of India
 (TRAI) introduced a discussion paper on minimum criteria for
 any entity opening broadcast operations. How far this
 consultation paper will actually influence policy is to be
 determined. But the TRAI paper could well be considered an
 effort to close the stable doors after the horse has bolted,
 since it questions the entitlement of several bodies that are
 already significant players in the broadcast media scene in
 India -- such as religious entities, political parties an
 cross-linked media houses.

 In its currently applicable guise, the guidelines specify
 certain eligibility criteria for obtaining satellite
 up-linking permission for television broadcasting. These
 include stipulations on the maximum extent of foreign equity
 ownership (49 per cent) and the minimum net worth of the
 entity seeking such permission (which varies between INR 10
 million and 30 million, depending on the number of channels
 leased by the broadcaster).

 There are no qualifications required in terms of media
 competence or adherence to ethical norms in any guise. Two
 recent events highlight the uncertain consequences for the
 Indian media:

 * In September 2007, a 24-hour news channel, India Live TV,
 was ordered off the air for one month as penalty for airing a
 fake 'sting' operation implicating a teacher in Delhi in a
 non-existent prostitution racket. The case obviously
 warranted prosecution under legal provisions covering the
 offences of falsification of evidence, extortion and
 incitement to violence. There was also a strong case for
 lawful recompense to the teacher, who suffered serious trauma
 and irreparable damage to her reputation. Yet the regulatory
 response was to take the channel off the air. No explanation
 has been offered for either the punishment or its duration.

 * In November 2007, a radio jockey on the Red FM channel was
 booked under the law for inciting communal violence between
 the Nepali Gorkha community and others. Red FM broadcasts to
 various urban markets in India. However, it is not known to
 have a signal in Siliguri district in the state of West
 Bengal, where riots broke out over allegedly disparaging
 remarks made against the Nepali Gorkha community. The
 individual concerned now faces prosecution in a West Bengal
 court. Red FM offended against a basic rule of ethical
 journalism, which is "to do no harm". But the sanctions that
 the individual faces under relevant provisions of the law
 dealing with the incitement to violence and creating
 disharmony among communities, seem excessive and illogical.

 These two events draw attention to a major lacuna in India's
 regulatory regime: there are no accepted standards on the
 exercise of the free speech right in the Indian media.
 Neither is there a credible regulatory framework in place.
 More serious transgressions (than that of Red FM) and more
 serious abuses (than that of India Live TV) escape sanction
 because they do not (for whatever reason) fuel violence on
 the streets. This raises troubling questions about how far
 media freedom can be hostage to inconsistent standards.

 Absence of accepted standards

 Media rights in addressing serious failures in the governance
 process and the administration of justice remain undefined.
 In September 2007, three journalists and the publisher of
 Midday, an afternoon daily in Delhi, were convicted by the
 Delhi High Court for 'contempt of court'. The court held the
 four guilty for a series of investigative articles and
 cartoons on the Indian Supreme Court's orders shutting down
 small commercial establishments and shops in notified
 residential areas of Delhi.


 In the absence of a transparent regulatory framework,
 interpretations of what is right and wrong with the media
 often come down to contingent political interests

 Political faction fight triggers arson: Fire services
 personnel at the office of the Dinakaran newspaper in Madurai
 after an arson attack in May 2007 that killed three media
 workers. Right, staff of Dinakaran in a demonstration
 demanding prompt action against the culprits. Photos: United
 News of India.

 The articles argued that India's Chief Justice, who assumed
 jurisdiction over the matter, may have had an undeclared
 conflict of interest, since his sons were involved in the
 property development business. Competent legal authorities
 who reviewed the articles pronounced them factual and

 Although the defendants have obtained a stay on the
 application of their sentence of four months' rigorous
 imprisonment, their conviction stands. Other sections of the
 media have failed to respond to the challenge posed by the
 judiciary's arrogation to itself of sky-high powers of
 conviction for the alleged offence of 'contempt of court'.

 Within the print media, a new threat to diversity has emerged
 in the rising price of newsprint. Since mid-2007, newsprint
 prices have increased by more than 40 per cent, compelling
 many newspapers to rework their advertisement-editorial
 ratio, and sharpening the competition for advertisement spending.

 Big print media houses such as Kasturi & Sons from Chennai
 (publishers of The Hindu), the Dainik Jagaran group in the
 Hindi belt, and Bennett Coleman & Co in Delhi (publisher of
 The Times of India) have launched either free or radically
 under-priced newspapers to tap into the market for

 Many, such as Bennett Coleman and HT Media (publishers of The
 Hindustan Times), have been offering their newspapers in
 various combinations at massive discounts. This has made the
 Indian print media dependent, more heavily than ever before,
 on advertisement revenues for survival. Smaller newspaper
 groups are understandably worried, as recent demands from
 some of them for the enactment of a 'price- page schedule'
 testify. This regulatory device, which has been introduced in
 the past and struck down by the Supreme Court as violating
 Article 19 guarantees of free speech in the Indian
 Constitution, mandates that newspapers should charge prices
 that reflect the volume of their content. It was devised to
 prevent larger newspapers from using their superior access to
 advertisement revenue to drive out smaller newspapers through
 price competition.

 The country's largest print media group, Bennett Coleman,
 meanwhile announced plans to promote a public relations
 company. This is seen to be continuous with its aggressive
 effort to increase its share of total advertising spending.
 For about five years, the company has pursued a strategy,
 named Medianet, ostensibly to go beyond the limitations of
 traditional news-gathering techniques, especially in new
 areas of audience interest which have high potential for
 attracting contextual advertising -- such as lifestyle,
 fashion, entertainment, product launches and celebrity

 Medianet involved the payment of a fee for coverage in news
 columns. The Times management initially committed itself to
 clearly identifying every story published under Medianet.
 However, media analysts concluded that the practice of
 identifying each story that was paid for, seemed to lapse
 after a few weeks.

 Media houses are now known to conclude 'private treaties'
 under which they acquire an equity stake in particular
 companies, which they pay for through ad support. This
 assistance in 'brand buildin' and 'corporate image
 development' is more than paid for since the companies that
 attract the media houses' interest invariably happen to be
 entities that are on the verge of seeking a listing on the
 stock exchanges. Shares in most companies are known to
 appreciate wildly from the day they are listed and this gives
 media houses ample opportunities to cash in on windfall
 capital gains. There has been little public questioning of
 the conflict of interest issues involved in this practice, to
 which an increasing number of media houses in both the print
 and broadcast domains have resorted.

 With fortunes being made and lost on India's stock exchanges
 and investor decisions being critically dependent on media
 coverage, there have been calls in recent times to put the
 practice of 'private treaties' under the scanner from an
 ethical point of view.

 Content code debate

 In the context of the rapid growth in television
 broadcasting, India's Government has sought several times in
 the past to put in place a 'content code' that all
 broadcasters would be obliged to follow. A draft code was
 introduced by the Ministry of Information and Broadcasting in
 July 2007 and abandoned in the face of resistance from
 several media organisations. The Ministry then delegated the
 job of evolving an agreed position to the broadcast industry
 and its apex organisations. According to reports available at
 the time of this writing, the drafting of a content code is
 now stymied by disagreements between two rival organisations
 of broadcasters.

 Meanwhile, in disposing of a public interest petition arising
 from the 'sting' operation that wrongly implicated a teacher
 in a non-existent prostitution racket, the Delhi High Court
 held on December 14, 2007, that any channel planning to
 broadcast programs involving a 'sting' should be legally
 obliged to obtain prior permission from a
 government-appointed committee. It recommended that the
 Ministry of Information and Broadcasting should appoint a
 retired judge of a High Court to chair the committee, which
 should also comprise two others drawn from the bureaucracy.

 The judicial intervention, it must be underlined, came well
 after the offending channel had been ordered off the air by
 the Ministry. Yet with all this, the grounds on which the
 Ministry licenses channels are unclear, since the only
 eligibility criteria specified deal with patterns of equity
 ownership and the company's net worth (as already mentioned
 above). The grounds on which the Ministry cancels permissions
 are even less clear, since the only explanation offered in
 most cases is a failure to conform to the 'broadcast content
 code' decreed by the Ministry, which is far from being an
 agreed document.

 Medianet involved the payment of a fee
 for coverage in news columns. The Times
 management initially committed itself to
 identifying clearly every story published under
 Medianet. However, media analysts concluded
 that the practice of identifying each story that
 was paid for seemed to lapse after a few weeks.

 With voluntary codes of conduct and self-regulation being a
 distant prospect, India's Government recently notified
 'monitoring committee' at the level of each state and every
 district to enforce its content code. These committees are
 constituted overwhelmingly by bureaucrats and police
 personnel. It must be emphasised that all discussions
 involving ethical practices in the media are currently being
 conducted between the Government and media ownership groups.
 The involvement of journalists, media professionals and civil
 society has so far been marginal.


 Frederick FN Noronha * Independent Journalist
 http://fn.goa-india.org * Phone +91-832-2409490
 Cell +91-9970157402 (sometimes out of range)
 Please see http://nursing.goa-india.org