INDIA: Robust growth and a loss of diversity
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IFJ's South Asia Press Freedom Report for 2007-08.
Released on May 1 http://www.ifj-asia.org
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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
turnover.
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.
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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
Publications,Delhi
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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
due.
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.
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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
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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.
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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
accurate.
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
advertisements.
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
personalities.
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.
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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.
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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.
[END OF SECTION ON INDIA]
--
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
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