FOR some time now, rearguard action legitimising faits accompli has been passing for state initiative in framing legislation in the Indian media sector. What has come to be has come to be, seems the rationalisation; let’s see how to let it be, or give it a cosmetic tweak without ruffling too many feathers. Given the high stakes involved, this approach would almost appear complicitous, if we did not also know from tiresome experience that the state and the bureaucracy are just congenitally late and lazy in such matters.
So, more than two decades after cable and satellite TV came, saw and conquered; after much of the turf there is to be occupied has been occupied, indiscriminately; and a monopoly media regime is entrenched, fully and firmly, the government comes alive to the peril that rampant cross media ownership poses to democracy and the citizen’s right to information. Technological convergence has engendered media conglomerates that combine print, television, radio and the Internet, and businesses that exceed these categories like DTH (Direct to Home), HITS (Headend in the Sky), the yet incipient podcasting and IPTV (Internet Protocol Television); and push applications across delivery platforms to 2G, 3G and 4G devices, electronic tablets, and so on. They draw on finite radio spectrum so that there is also implicitly an overlap of the purviews of the Ministries of Information and Broadcasting (I&B) and Telecommunications in their management. The business logic and opportunity of such vertical integration have led to the emergence of big corporate entities straddling many of these businesses.
It took until mid-2008 for the Ministry of I&B to take cognisance of the situation and seek the opinion of the Telecom Regulatory Authority of India (TRAI) on how to tackle it. The following year TRAI made a number of recommendations aimed at curtailing monopolistic growth and at ensuring pluralism and diversity in the sector. The I&B Ministry then commissioned a study the same year by the Administrative Staff College of India (ASCI), which went into the state and extent of cross media holdings in the industry, the international experience in this matter, the need for caps on vertical holdings, and for transparency and public disclosure of ownership and holding patterns in the media sector.
After three years, in May 2012, the Ministry of I&B again sought TRAI’s expertise to evolve a comprehensive approach to balancing the technological and business logic of vertical integration and cross media holdings with the need for pluralism and diversity and the need to protect the citizen’s right to credible choice and competitive pricing of the media he consumes. TRAI has— after updating the ASCI data on 54 companies invested across print, broadcasting and new media, with further information on them provided by 20 Registrars of Companies, and domain information about market share and extent of cross holdings of media companies from the Ministry of I&B and the Registrar of Newspapers of India (RNI)—come up with a “Consultation Paper on Issues relating to Media Ownership”, which is posted on its website (www.trai.gov.in) for comments by stakeholders, including the public concerned.
The paper recognises the growth potential of the entertainment and media industry in India as the best in the world, with industry estimates projecting a Compounded Annual Growth Rate (CAGR) of 17 per cent for the five-year period between 2011 and 2016. China with a projection of 14 per cent, Russia with 12 per cent and Brazil will 11 per cent over the same period come second, third and fourth respectively in this survey of the top 15 nations in the field, making the BRIC formation (comprising Brazil, Russia, India and China) the rising media constellation of this decade. The potential in India is underscored by the further fact that the average per capita annual spend on media and entertainment in 2011 was only US$ 6.6, as against $65 in Brazil and $22 in China.
The Confederation of Indian Industry and PricewaterhouseCoopers India’s “India Entertainment and Media Outlook 2012” cited in the paper projects that the combined advertisement and subscription revenue from the sector, which was Rs.68,500 crore in 2010, and rose by 17.52 per cent to Rs.80,500 crore in 2011, is slated to reach Rs.1,76,400 crore by 2016. Of this, broadcasting shows the biggest gain. Television grew from Rs.29,400 crore in 2010 to Rs.34,000 crore in 2011, a-year-on-year growth of 15.7 per cent, and is expected to touch Rs.67,400 crore by 2016, registering a CAGR of 14.7 per cent from 2012 to 2016. The corresponding figures for radio are Rs.1,300 crore for 2010 and Rs.1,400 crore for 2011, a 10.8 per cent rise over the year, and Rs.3,000 crore for 2016, representing a CAGR of 16.7 per cent over the same four-year period. Print posted a relatively modest revenue growth of 7.2 per cent between 2010 (Rs.17,800 crore) and 2011 (Rs.19,000 crore) but, bucking the international trend of steep decline, is set to accelerate ahead to touch a revenue of Rs.29,600 crore in 2016, with a CAGR of 9.2 per cent over 2012-16. The other media—a miscellany of Internet, gaming, music, and out of home (OOH) media—account for the rest.
But it has been a warped growth because the financial benefits accrue to a few pockets and there is no evidence of a commensurate social or intellectual dividend reaped by the public at large. A consultation paper, understandably, cannot be a position paper; but a clearly stated political will is what is missing both in it and in the situation it seeks to discuss. The core and crucial issue in the media sector is that the pattern and trajectory of growth has systematically eliminated or marginalised the small and medium player in favour of the big corporation. Entry barriers that are operational against the small or medium entrepreneur are as much a function of monopolistic exertions in the market as are disabling rules and prohibitive fees prescribed by the government for the new entrant of relatively modest means. In October 2011, for example, the net worth requirement of an applicant seeking to launch a general information or entertainment channel was raised from Rs.1.5 crore to Rs.5 crore and, in the case of a news channel, even more sharply, from Rs.3 crore to Rs.20 crore. Interestingly, the net worth stipulation for an additional channel by one already up and running was only Rs.2.5 crore for the general entertainment category and Rs.5 crore for news.
This was a blow to the notion of diversity. It was made out that the move was meant to keep non-serious players out and to place a reasonable limitation on the number of applicants. These are valid considerations, especially given that 848 channels had been licensed until December last year and about 650 of them are operational, including 350 news channels. But the profusion of channels has not meant democratic difference and variety. And privileging existing channels by making it cheaper for them than for a fresh entrant to get the licence for a new channel may at best lead to market specialisation and segmentation catering to niche viewership constituencies; which, again, would be a mode of market optimisation and not the same as diversity in the democratic sense.
The consultation paper’s pious reference to democratic values of diversity and pluralism in advocating caps on the market size and cross media holdings of media organisations seems more rhetorical flourish than an article of faith. There are also Freudian slips which confuse regulating the media market with controlling media behaviour and content, as, for instance, when it states: “The inherent conflict of interest which arises from uncontrolled ownership in the media sector gives rise to manifestations such as (i) paid news (ii) corporate and political lobbying by popular television channels (iii) propagation of biased analysis and forecasts both in the political arena as well as in the corporate sector, (iv) irresponsible reporting to create sensationalism.” How or what any of these, admittedly corrupt and unethical media practices, has to do with the market reach of a media house or its cross holdings in the sector is not clear.
The paper recapitulates the partial cross holding restrictions in force, particularly in the licensing of FM radio; the extent of equity a broadcaster or DTH platform owner can hold (not more than 20 per cent) in a company providing HITS-based broadcasting and vice versa, whereas there is no such restriction between a cable TV operator and a HITS service provider; and a similar equity cap between any mobile TV service and a channel broadcaster, again not applicable between DTH and mobile TV, and so on. They seem, for the most part, measures to protect the specific markets for different parts of the industry from aggrandisement by the other parts rather than to safeguard the interests of the end receiver or the public.
TRAI’s belief that political and religious bodies, government Ministries and departments and urban and rural public-funded local bodies should not be allowed to own broadcasting channels or uplink stations would be unexceptionable but for the glaring example of Doordarshan which, although behind the fig leaf of the autonomous corporation Prasar Bharati, continues to be pretty much a broadcaster of, by and for the government. A conspicuous absence in the consultation paper is the interesting experience of Lok Sabha TV, which has charted a somewhat different and independent course (being under the Speaker of the House and not the government) of intelligent debate, discussion and docu-features, and oftentimes offers refuge to the weary channel surfer emotionally drained by the high-strung fare on the private news channels.
One chapter in the paper skims over the key aspects of regulations in eight international markets, namely, the United Kingdom, the United States, Canada, France, Germany, Australia, South Africa and South Korea. These pertain to four broad restrictive aspects: of those ineligible to operate a media business; of the extent, in terms of percentage of market share, to which a publication, a TV channel or a radio station can dominate a given market; limitations on cross media holdings; and conditions and caps on mergers and acquisitions. While how these countries have tackled these issues in their separate contexts is instructive, it is not clear whether the suggestion is to follow the one or the other example or to arrive at an eclectic mix of the lot best suited to our purpose.
What emerges from the consultation paper is that the media in India first needs to be mapped thoroughly—and this may need some diligent investigative work—so that there is a clear picture of who owns what and, in some cases, who is a front for whom and how, or which big corporate is quietly bankrolling which media. The voluntary or even mandatory disclosures the paper makes frequent reference to are unlikely to reveal the real situation. A perspective informed by a sense of the political economy of the media in the country is necessary to frame an alternative media dispensation which is more inclusive, relevant, transformative and democratising.
In the absence of this paradigm shift, it makes no difference, in the final analysis, whether concentration in a media market is measured by either of the empirical methods the paper proposes: C3 or HHI (Herfindahl-Hirschman Index). Nor does the quibble over whether “entity” is a more appropriate appellation than “company” in the media sector—as though just calling it an entity will help expose information the company is withholding. As for the suggested permutations and combinations towards arriving at the most foolproof, or least damaging, formula for keeping cross media holdings in check, they tend to read like the riddle, or parable, of the boatman who has to ferry a lion, a bundle of grass and a goat across the river, and can only carry any two of them in each trip, and the lion cannot be left alone with the goat, nor the goat with the grass, lest the one eats the other. Both situations need some figuring out.