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Media ownership trends in India
The growing corporatization of the Indian media is manifest in the manner in which large industrial conglomerates are acquiring direct and indirect interest in media groups. PARANJOY GUHA THAKURTA
Posted/Updated Tuesday, Jul 03 14:54:30, 2012
Who owns the mass media in India? That is a rather difficult question to answer. There are many media organisations in the country that are owned and controlled by a wide variety of entities including corporate bodies, societies and trusts, and individuals. Information about such organisations and people is scattered, incomplete, and dated, thereby making it rather difficult to collate such information leave alone analyse it. Nevertheless, a few salient aspects about media ownership stand out from the inadequate information that is available.
 
  • The sheer number of media organisations and outlets often conceals the fact there is dominance over specific markets and market segments by a few players – in other words, the markets are often oligopolistic in character.
 
  • The absence of restrictions on cross-media ownership implies that particular companies or groups or conglomerates dominate markets both vertically (that is, across different media such as print, radio, television and the internet) as well as horizontally (namely, in particular geographical regions).
 
  • Political parties and persons with political affiliation own/control increasing sections of the media in India.
 
  • The promoters and controllers of media groups have traditionally held interests in many other business interests and continue to do so, often using their media outlets to further these. There are a few instances of promoters who have used the profits from their media operations to diversify into other (unrelated) businesses.
 
  • The growing corporatization of the Indian media is manifest in the manner in which large industrial conglomerates are acquiring direct and indirect interest in media groups. There is also a growing convergence between creators/producers of media content and those who distribute/disseminate the content.
 
These trends can be perceived as instances of consolidation in a sector in which big players have been steeped in debt and strapped for cash over the past few years. The shake-out also signifies growing concentration of ownership in an oligopolistic market that could lead to loss of heterogeneity and plurality. The emergence of cartels and oligarchies could be symptomatic of an increasingly globalised but homogenized communication landscape, despite the growth of internet technology bringing about a semblance of democratization by allowing for more user-generated content by “prosumers” (producer-consumers). While the growth of the internet has led to a collapse of geo-spatial boundaries and lower levels of gate-keeping in checking information flows, the perceived increase in diversity of opinion has been simultaneously accompanied – paradoxically – by a shrinking in the number of traditional media operations in television and print.
 
Consolidation
 
In the last few years there has been a growing consolidation of media organisations across the globe. In the political economy of the media the world over there is clearly an alarming absence of not-for-profit media organisations. Neither subscription- nor advertising revenue-based models of the media have been able to limit this tendency of large sections of the corporate media to align with elite interest groups. In not just economic terms, the media is perceived as an active political collaborator as well seeking to influence voters on the basis of allegiances of owners and editors. This can, and often does, constrain free and fair exchanges of views to facilitate democratic decision-making processes.
 
The Indian media market differs from those of developed countries in several ways. For one, India is a developing country and all segments of the media industry (including print and radio) are still growing unlike in developed countries. The media market in India remains highly fragmented, due to the large number of languages and the sheer size of the country.
 
In India’s unique “mediascape”, it is often contended that the proliferation of publications, radio stations, television channels, and internet websites is a sure-fire guarantor for plurality, diversity, and consumer choice. There were over 82,000 publications registered with the Registrar of Newspapers as on 31 March 2011. There are over 250 FM (frequency modulation) radio stations in the country (and the number is likely to cross 1,200 in five years) – curiously, India is the only democracy in the world where news on the radio is still a monopoly of the government. The Ministry of Information & Broadcasting has allowed nearly 800 television channels to uplink or downlink from the country, including over 300 which claim to be television channels broadcasting “news and current affairs”. There is an unspecified number of websites aimed at Indians.
 
Despite these impressive numbers of publications, radio stations and television channels, the mass media in India is possibly dominated by less than a hundred large groups or conglomerates, which exercise considerable influence on what is read, heard, and watched. One example will illustrate this contention. Delhi is the only urban area in the world with 16 English daily newspapers; the top three publications, the Times of India, the Hindustan Times, and the Economic Times, would account for over three-fourths of the total market for all English dailies.
 
India’s established media conglomerates have staunchly refused to accept the need for restrictions over ownership and control, arguing that this would result in devious and dubious forms of censorship and have resurrected the ghosts of the 1975-77 Emergency. The government too has played along. After all, powerful politicians need media barons as much as they need them – a mutually beneficial back-scratching society of sorts. A few randomly-chosen examples would include Shobhana Bhartia of the Hindustan Times group, the late Narendra Mohan of the Dainik Jagran group (which brings out India’s most widely circulated Hindi daily), the Dardas of Lokmat, the Marans of the Sun group, and Chandan Mitra of The Pioneer.
 
A report prepared by an independent institution recommending imposition of cross-media ownership restrictions recently entered the public domain nearly three years after it was submitted following a rebuke to the government by a panel of lawmakers. The report, running into nearly 200 pages, was prepared by the Administrative Staff College of India (ASCI) at the instance of the Ministry of Information & Broadcasting (I&B). Though this report was submitted in July 2009, it was placed on the Ministry’s website only after Parliament’s Standing Committee on Information Technology sharply criticised the government for not initiating any action on the ASCI report’s recommendations.
 
Market dominance
 
The Hyderabad-based ASCI report pointed out that there is “ample evidence of market dominance” in specific media markets and argued in favour of an “appropriate” regulatory framework to enforce cross-media ownership restrictions, especially in regional media markets where there is “significant concentration” and market dominance in comparison to national markets (for the Hindi and English media).
 
The government seems unlikely to accept the recommendations of the report prepared by ASCI, which describes itself as an “autonomous, self-supporting, public-purpose” institution. In fact, a senior official of the I&B Ministry said so to this writer in an off-the-record conversation. The Ministry has, for the time being, tossed the contentious set issues on cross-media ownership on to the court of the Telecom Regulatory Authority of India (TRAI).
 
The Standing Committee on IT, headed by Congress MP Rao Inderjit Singh, noted that the issue of restrictions on cross-media ownership “merits urgent attention” and needs “to be addressed before it emerges as a threat to our democratic structure”. It urged the Ministry to “formulate” its stand on the issue in coordination with the TRAI “after taking into account” international practices.
 
The earlier (February 2009) report of the TRAI had stated that it is important that “necessary safeguards be put in place to ensure plurality and diversity are maintained across the three media segments of print, television and radio”. Before the TRAI report was finalised, during the consultation phase, there was strong resistance on the part of media groups to the idea of restrictions on their sector. Many different arguments were proposed, among others that regulation would stifle growth, that the multiplicity of media and the highly fragmented nature of the Indian market prevents monopolization, and that regulation of the sector amounts to an impingement on the Constitutional right to freedom of speech. Further, some groups, “particularly those associated with print” even argued that it was not under the jurisdiction of the Authority to make recommendations on any matter which did not relate directly to telecommunications. This view was not accepted by the government.
 
Having taken into account all the arguments of the media groups, the TRAI nevertheless came to the conclusion that certain restrictions are required. It argued for restrictions on vertical integration, that is to say on media companies owning stakes in both broadcast and distribution companies within the same media. The reasoning behind this restriction is that vertical integration can result in anti-competitive behaviour, whereby a distributor can favour his/her own broadcasters’ contents over the content of a competitive broadcaster. In this scenario, large conglomerates would be able to impose their preferred content, a clearly dangerous situation.
 
Disputes
 
According to the TRAI’s report, vertical integration in the media market is already causing serious problems. There have been numerous disputes brought before the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) between broadcasters and cable operators alleging denial of content by other service providers. New cases are being added regularly, which the TRAI regards as “a clear indication that the current market situation requires corrective measures”.
 
Further, the report calls attention to the fact that all restrictions on vertical integration are currently placed on companies. However, as we have seen, the large conglomerates of the Indian media are usually groups that own different companies. This allows them to have controlling stakes both in broadcasting and distribution by acquiring licences under their different subsidiary companies, thus totally bypassing current restrictions and defeating the purpose of their existence in the first place. The report, therefore, suggests that restrictions no longer be placed on “companies” but on “entities” or groups, which would include large groups and conglomerates such as BCCL and Dainik Bhaskar.
 
With regards to cross-media ownership, the report points out that no such restrictions exist in India, in stark contrast with most other countries in the world with a free press, including the United States, the United Kingdom, France, and Canada. It argued that restrictions are necessary and recommend that the Ministry should conduct a detailed market analysis in order to identify which safeguards would be most appropriate in the Indian context.
 
Debates on media ownership are almost as old as the nation itself. The country’s first Prime Minister Jawaharlal Nehru and his Defence Minister V.K. Krishna Menon would castigate the “jute press” in a clear reference to BCCL which was then controlled by the Sahu-Jain group which also controlled New Central Jute Mills. Then came references to the “steel press”. The Tata group, which has a substantial presence in the steel industry, used to be a part-owner of the company that publishes the once-influential The Statesman. Ramnath Goenka, who used to head the Indian Express group, made an aborted attempt in the 1960s to control the Indian Iron and Steel Company (IISCO). What was being clearly suggested by politicians was that particular family-owned groups would use their news companies to lobby for their other business interests.
 
Today, the situation described by Nehru has intensified multifold. In fact, instead of using their media companies to lobby for their non-media business interests, a few large media groups have been able to diversify their business activities, thanks to the profits generated by their media business. In India at present, promoters of media companies have subsidiary business interests in sectors as varied as aviation, hotels, cement, shipping, steel, education, automobiles, textiles, cricket, information technology, and real estate. For example, the Dainik Bhaskar group, which, in 1958, ran a single edition Hindi newspaper from Bhopal, has a market capitalization of Rs 4,454 crore (as on July 30. 2010), owns seven newspapers, two magazines, 17 radio stations, and has a significant presence in the printing, textiles, oils, solvent extraction, hotels, real estate, and power-generation industries.
 
According to research conducted by Dilip Mandal and R. Anuradha, that has been published in Media Ethics (Oxford University Press, 2011), the boards of directors of a number of media companies now include (or have included in the past) representatives of big corporate entities that are advertisers. The board of Jagran Publications has had the managing director (MD) of Pantaloon Retail, Kishore Biyani, McDonald India’s MD Vikram Bakshi, and leather-maker Mirza International’s MD Rashid Mirza; besides the CEO of media consulting firm Lodestar Universal India, Shashidhar Sinha, and the chairman of the real estate firm JLL Meghraj, Anuj Puri. The board of directors of HT Media, publishers of Hindustan Times and Hindustan, has included the former chairman of Ernst & Young K. N. Memani and the chairman of ITC Ltd Y C Deveshwar. Joint MD of Bharti Enterprise Rajan Bharti and MD of Anika International Anil Vig are a part of the TV Today’s Board of Directors. The board of directors of DB Corp (that publishes Dainik Bhaskar) includes the head of Piramal Enterprises Group, Ajay Piramal, the MD of Warburg Pincus, Nitin Malhan, and the executive chairman of advertising firm Ogilvy & Mather, Piyush Pandey. NDTV’s Board of Directors has Pramod Bhasin, President & CEO of the country’s biggest BPO company GenPact as a member of its board of directors.
 
Media companies tend to have a variety of professionals on their boards, such as investment bankers, venture capitalists, chartered accountants, corporate lawyers, and CEOs of big companies. Professional journalists, ironically, rarely figure. As a result, those at the top of the decision-making hierarchy are those for whom the bottom-line, not the by-line, is most important.
 
Evil of “paid news”
 
This closeness between the media and corporate India leads to a deplorable confusion of priorities. Instead of media houses relying on advertisers to fund quality journalism, the relationship becomes insidiously reversed. Advertisers and corporate units begin to rely on news outlets to further their interests. In 2003, Bennett Coleman Company Limited (publishers of the Times of India and the Economic Times, among other publications) started a “paid content” service, which enabled them to charge advertisers for coverage of product launches or celebrity-related events. In the run-up to the 2009 Lok Sabha elections, the more clearly illegal practice of “paid news” emerged and became widespread.
 
The behind-the-scenes influence of corporate and vested interests was made particularly apparent by the leaking of tapes recording conversations between Niira Radia, a powerful lobbyist with clients such as the Tata group and Reliance Industries, and a variety of business men, politicians, and journalists. They revealed what had long been an open secret: the collusion and uncomfortable closeness among corporate units, politicians and journalists, a world in which the line between politics and business, public relations and news, is increasingly blurred.
 
 That many media companies argue in favour of relaxed legislation with regard to media consolidation is not surprising, when one considers the difficulties of breaking even, let alone making money, in the business. From a business point of view, media consolidation has undeniable advantages. It allows for economies of scale, which enable media companies to absorb the costs of content and distribution over a large volume of revenue. This in turn allows companies to invest in better resources such as talent or technical equipment. In a competitive market, small media companies have a very hard time surviving. Consolidation makes a lot of economic sense and can even, to some extent, translate into improvements in quality.
 
Unacceptable
 
However, what is unacceptable is media barons using news outlets as tools to further their business interests. Rupert Murdoch, whom we recently watched fall from the heights of his empire due to the News of the World phone-hacking scandal in the UK, had spun a whole web of political influence, based mostly on the power wielded by the many newspapers and organs of propaganda (such as the far-right conservative Fox News) at his command to influence public opinion. This was also true in Italy where media tycoon Silvio Berlusconi has been that country’s longest-serving Prime Minister after the Second World War.
 
A few recent developments point towards the growing corporatization of the India media and the growing convergence between producers of media content and those who distribute the content.
 
On January 3 2012, the Mukesh Ambani-led Reliance Industries Limited (RIL) – India’s biggest privately-owned corporate entity with a turnover of Rs. 2,58,651 crore in the financial year that ended on March 31, 2011 – announced that it was entering into a complex, multi-layered financial arrangement that involved selling of its interests in the Andhra Pradesh- based Eenadu group founded by Ramoji Rao to the Network 18 group headed by Raghav Bahl and also funding the latter through a rights issue of shares. The deal will make the combined conglomerate India’s biggest media group, according to Bahl -- bigger than media groups such as STAR controlled by Rupert Murdoch, and BCCL controlled by the Jain family.
 
On May 19, 2012, the Aditya Birla group announced that it had acquired a 27.5 per cent stake in Living Media India Limited, a company headed by Aroon Purie. Living Media acts as a holding company and also owns 57.46 per cent in TV Today Network, the listed company that controls the group’s television channels (Aaj Tak and Headlines Today) and a host of publications (including India Today).
 
On December 21, 2012, Oswal Green Tech, formerly Oswal Chemicals & Fertilizers, acquired a 14.17 per cent shareholding in New Delhi Television in two separate block deals from the investment arms of Merill Lynch and Nomura Capital.
 
Key concerns
 
Deals like the three outlined raises several key concerns relating to consolidation within the Indian media industry. With larger television broadcast networks, including Zee, Turner/CNN, Viacom/MTV and Sony, expected to acquire/partner regional networks, the commoditization of news seems almost inevitable but not necessarily desirable. In this country, as in the world over, large media corporations are today clearly playing a bigger role in the political economy that they report on. Though a free media is fundamental to the existence of a liberal democracy, concerns about the accountability and transparency of media companies remain.
 
For instance, the RIL deal has enabled Network 18, Eenadu, and the merged group to expand its offerings to benefit both its stakeholders and its advertising target audiences. What remains to be seen is whether clear boundaries can be etched between the boardroom and the newsroom. The deal, therefore, raises significant questions about the diminishing levels of media plurality in a multilingual and multicultural country. Most of the reportage on the deal has focused on its business aspects. Questions about the future nature of editorial control remain unanswered. The complicated holding structures and investments made through layers of subsidiary companies make it difficult to discern the real “bosses” and the powers they wield.
 
The real challenges that lie ahead for the media in India are to ensure that growing concentration of ownership in an oligopolistic market does not lead to loss of heterogeneity and plurality. In the absence of cross-media restrictions and with government policies contributing to further corporatization, especially with respect to the television medium, diversity of news flows could be adversely affected contributing to the continuing privatization and commodification of information instead of making it more of a “public good”.
 
(Portions of this article have been based on earlier articles of the author written for The Hoot (June 10,2012), the Economic and Political Weekly (February 18,2012), and Tehelka (October 22, 2011).
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