The changing Indian media scene

T.N. NINAN

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GUESS which are India’s most valuable media companies? The chances are that you would not have thought of Adlabs and Balaji Telefilms as being among them. But they happen to be among the six media companies that are listed on the stock market, each of which has a company valuation of more than Rs 1,000 crore. That is not the complete story, of course, because some of the largest media companies in the country are not listed – Bennett Coleman and Kasturi & Co, for instance. Still, it is interesting that among the media companies with the highest valuations, three others either did not exist in 1991 or were cottage industries then: Zee Telefilms, New Delhi Television and Television Eighteen.

Some of the largest media players are not necessarily national entities, and could be regional players. Arguably, the biggest media story of the past decade is the super-successful Sun group of southern India. And who would have thought that Dainik Jagran and Dainik Bhaskar (the leading Hindi dailies with no presence in the south, east and most of the west) would have the same stock valuation as the Hindustan Times (No. 2 in the English market)? But they do, at over Rs 2,000 crore each.

And who knows, even these could be outdone by Harish Thawani of Nimbus, the advertising/sponsorship agency that has tied up a cricket sponsorship deal for the eye-popping sum of Rs 2,700 crore, and now thinks it is cheaper to do its own sports TV channel than sell cricket coverage to other TV operators.

In other words, check your premises before starting to debate media; it is not what you thought it was. The word does not mean just newspapers; and soon it will not mean just TV either. Nor does it mean just news. It means entertainment. And the clear line that used to be there between these two segments often gives way now to a continuum, where it is sometimes hard to decide what is which. Will an FM radio station run by Adlabs, which is debarred from broadcasting news under the government’s bizarre formulation, not be allowed to tell you stock market prices, or cricket scores? What is news, after all? Some newspapers now refer to advertising as ‘news you can use’! So ads too can be news. And newspapers find that (in comparison with an earlier age) they have to entertain more now, and educate a little less (and pander to the powerful rather than provoke them!). In short, this is not the media world of 15 years ago, when categories and rules and pecking orders and ethical choices and your place in the world were clear to everyone.

The other change is that Indian media is no more the same thing as media in India. Foreign media are here like never before (Star and Sony Entertainment are major players, and there are several international print players who have entered the Indian market); and Indian media are all over the world – NDTV and Zee, for instance, run channels across Europe and North America.

 

But anyone who thinks that the print media is challenged by the Johnny-come-latelies of the electronic world, had better think again – because print has fought back and by some reckonings has grown faster in the past couple of years. And there is another reason why TV cannot sit pretty, for there is the internet – as Subhash Chandra of Zee argued in some detail at FICCI’s ‘Frames’ conference in Mumbai last month. To some extent he was echoing Rupert Murdoch, who on more than one occasion in the past year has focused on the challenges posed by the internet. Think Google News and its variants – with Google ads; think ad-erasing technologies for TV that have gained ground in Europe, like Tivo, so that you can watch time-delayed movies on TV without being disturbed by Aishwarya Rai performing over and over again for Coke; and think of customized viewing by people who don’t want to follow network schedules and can soon set their own, and pick and choose. Access to news and views need not also be through TV sets or computers; it can be on ‘thin devices’ like mobile phones and palm tops, or through a broadband connection.

 

For sure, Indian TV now covers more than half the population (close to 600 million people) and therefore has among the biggest audiences in the world – one reason why the centre of world cricket has shifted to this country. So who has done the biggest sports telecast deal in history? Nimbus. Is that media? Not in the traditional sense, but it could soon be. With over 100 million TV sets, the majority of which are hooked to cable and satellite channels, the TV story is in fact the most important development of the past 15 years. As a business, cable and satellite TV now rivals print in terms of reach (about a quarter of the population), although it is barely 15 years old, and already carries greater political clout – quite apart from also being the pioneer with such innovations as sting journalism. But India also has 140 million phones, and four million are being added every month! Welcome to the world of genuine multimedia.

Even if one were to ignore the entertainment side of the business for the moment, any understanding of the media beast must begin with recognition of the fact that the news media is a two-faced animal. In one frame of reference it is the ‘fourth estate’, performing the public function of the free press in a democracy – and therefore blessed with the importance and recognition given to a societal ‘good’. But the media, in all but the rarest of cases, is also a business, clothed as it is in a corporate entity with shareholders who expect a return on their investment.

The tension between these two objectives – of publishing (or telecasting) all the news that is fit to print (without a thought for the cost of newsprint), with no quarter given to any power (including advertisers), and at the same time of maximizing profits – raises many questions: the autonomy and freedom given to the editorial function within a corporate hierarchy and pecking order; the tension between the very different goals of growing circulation and readership (which costs money) and pushing advertising (which earns it); and whether there can be virtuous circles, with strong balance sheets underwriting freedom from commercial pressures and therefore editorial independence.

 

These two faces of the media are usually examined without reference to each other. The general print media debate usually focuses on the editorial issues of freedom and censorship (internal, external), quality and relevance. The business media, when they look at their own sector, will focus on stock prices, growth rates, market shares, bottom lines and such. Almost no one looks at the interplay between the two, though each fundamentally influences the other and the full story cannot be told without keeping the duality in mind. (Journalists are not alone in this; political history in India is rarely studied with reference to the economic context that has often caused the birth of new political currents.)

Any holistic attempt must therefore be to understand each set of issues with reference to the other. That makes it a more complicated story, but hopefully also a more interesting one. Though one must immediately make the confession that, while several trends stare us in the face, they make no single cohesive pattern that can be immediately drawn out for the reader, all one can do is to lay out the mosaic in all its interwoven complexity.

First, even for print, there is the growth story, the rapid expansion and diversification of the Indian press, at a time when the sales of newspapers in western countries are in steady decline (in the US, by about five per cent a year). Thank India’s growing population and rising literacy – both trends that should keep the country’s newspapers in good nick for some time to come. Within this, there is the interesting, subsidiary trend of regional language publications coming into their own – with growth in circulation, a greater share of advertising, and (perhaps more important than both of these) growth in self-confidence. Perhaps that was inevitable at some stage, since the total readership for English publications is less than two per cent of the population, and less than a tenth of the total reach of print. And with spending power going beyond the metros, into the small towns and even villages, there is a shift of advertising and financial power as well. The stock market knows what it is doing when it values Jagran Prakashan and HT Media at about the same level.

 

As a natural corollary to this growth story, we have the advent of media as a sizeable and significant business – so much so that immigration forms now have media as a sub-category among the professions that you can tick. At least ten newspapers now count their daily copy sales in millions, not lakhs – three in English, as many in Hindi and the rest in regional languages. The largest publishing company (Bennett Coleman) is perhaps the most profitable among all privately held firms in India and would be worth more than a couple of billion dollars if floated on the stock exchange. Its chairperson, Indu Jain, figures in the list of 23 Indians listed by Forbes as dollar billionaires. This is no longer the semi-cottage industry of old; and the stakes are high.

Businesses that grow big usually cease to be wholly family-owned enterprises, and so it is that the larger Indian media companies have begun to get listed on the stock exchanges and invite public shareholding – with all the extra attention, accountability and media focus that this brings to sales trends, profits and market capitalization. A dozen media firms are now publicly quoted, and about half these are valued at over Rs 1,000 crore each on the stock market – including an unlikely candidate in the Deccan Chronicle. Not the stuff to set the market on fire, but a far cry from two decades ago, when the largest media company reported net profits of about rupees five crore. It is a hundred times that today.

 

Then, there is the growing sophistication of the media market. There is the professional polish of the news channels, the production values (if not always the content) of the soaps and sitcoms, the technical wizardry of cricket coverage, and the growing range of expertise in newspaper offices (full-time defence correspondents, science reporters, agriculture editors, personal finance pages, fashion editors, food specialists, environment reporters, people who focus on gender issues, media analysts, marketing correspondents…). Those writing on these sometimes have degrees in business management or a doctorate in physics, with even the odd accountant thrown in.

The rapid growth of editions and pages has meant a sharp increase in the demand for journalists. Three things have resulted: a mushrooming of media schools of varying quality to train journalists, the preponderance of young reporters and editors in newspaper offices, and a sharp spurt in salaries for all those with some claim to ability. Though youth and energy are more in evidence than experience, perspective and (sometimes) good judgment, the pay packet for someone with 12-15 years of experience and some special quality of his or her own can hit Rs 15-20 lakh and more. Even after adjusting for inflation, that would be more than Girilal Jain ever earned as editor of The Times of India (till 1988).

 

All these are elements of the growth story. On the business side, there is now the sophisticated computer modelling that determines media buying plans – leading to the birth of firms that do nothing other than media planning and media buying. And as printing presses of international quality have begun to get manufactured in the country, their costs have dropped dramatically, so you can now find a good printing press with colour facilities and speeds of 30,000 copies an hour in almost any major town in the country. That, plus the communications revolution, has helped newspapers start multiple editions and localise their news so as to focus on regional and district news, not just national and global – thus reaching out to new readers. In a parallel development, and as another manifestation of the communications revolution, satellite slots have become so plentiful and cheap that transponder costs are no longer a significant element of cost when launching a new channel. What you get, therefore, is media proliferation as entry-level costs have fallen.

All of these (multimedia growth, variety, size, entrepreneurship, wealth creation, technical sophistication, localisation) are positive developments, and reflect an open society with a free press that also has a rapidly growing economy and a burgeoning literate population that is hungry to read and get the news. Watch any parking lot where drivers of cars congregate, or bored guards outside affluent homes, or neo-literates in other occupations, and you will probably see a good percentage engrossed in reading the morning’s newspaper. This macro-trend tends to get ignored in a media debate that usually focuses on the problem areas, perhaps because good news is still not considered news.

But of course, there is the darker side to current trends. The focus must shift for a while, therefore, to the changing internal dynamics within media offices, with the relative decline of the editor or his equivalent, and the growing importance of the business departments. This is usually attributed to specific individuals, and it is of course true that trends manifest themselves through individual personalities who are driven by their own psychological needs. But it is important to recognize the larger forces at work, linked to some of the business and technological developments already spelt out.

 

For, in times of stable businesses, limited competition and general status quo, editors could ignore the market and behave as kings in their offices – buoyed by the mythology (sometimes based on fact) of editors who rub shoulders with the rich and the powerful, and even with god. Once media multiplies, though, markets become contestable and circulations get threatened by new rivals. So what sells becomes as important as the editor’s notion of what is important. Enter readership surveys (the editor may not know best, after all), brand managers and the rest of the marketing kerfuffle.

But even as the editor loses importance, section editors with ability gain in value – because one way to take on the competition is to upgrade quality and cater more closely to reader interests. This might mean more city coverage, or more business pages, or bigger sports pictures, or a splash on fashion, or arresting coverage of the entertainment sector. The variety is also dictated by readers’ perceived desire to move away from grand national politics to either local issues (like water supply) or to the new car models being launched. It is the section editors who deliver all this, and when the ‘Daily News Analysis’ was launched as India’s newest paper in Mumbai last year, all the section editors were hired before the editor was identified, almost as an afterthought.

 

Editorial quality thus becomes important, not editorial independence – and the reader usually does not care enough to know the difference. And within the newspaper world, a job offer with a 30 per cent pay hike is usually enough to make a journalist not worry too much about who actually decides what should be the news, the editor or the publisher, and to be willing to follow publisher diktat on who can or cannot be written about and how. So it’s not just the reader who is indifferent, in most cases the journalist doesn’t care either – in part because the gods of the media world have all too often been shown to have feet of clay.

This ties in with a parallel but reinforcing development, which is the increasing dependence on the advertiser for a newspaper’s revenue, with downstream consequences. To understand how this has come about, one must go back to the time when every region or state had its own newspaper-reading pattern, not just in a particular regional language but also in the multi-region languages of English and Hindi. The Times of India ruled in Mumbai, the Hindustan Times in Delhi, the Hindu in Chennai, the Deccan Herald in Bangalore, the Deccan Chronicle in Hyderabad, and so on, down to the Tribune in Chandigarh, the Pioneer in Lucknow, and Searchlight in Patna. Enter the era of low-cost printing presses, high-speed data lines that can zap a whole newspaper page to any printing centre in minutes, and ease of transportation, and newspapers began to think beyond a city, state or region.

With the era of multi-edition newspapers and therefore multi-newspaper markets, has come greater choice and a fierce fight for the reader’s attention. Along then came the vital discovery that readers may not be completely wedded to habit and to reading one newspaper, and that even a small difference in price could sometimes bring about a change of purchase decision. This has driven newspaper prices to the point where the leading newspapers fetch virtually no circulation revenue for their publishers (the little that is collected from the reader goes almost entirely to the distributor and hawker). Indian newspapers are now the cheapest in the world, though the world of completely free newspapers is still to descend on this country. Wait for the metros to become true transport pipes, though, and even that will come about in may be half a decade.

 

Once newspapers become virtually free, and the advertiser knows he is king (advertising usually accounts for more than 80 per cent of the revenue of almost any English newspaper, and about 50-65 per cent in the case of other languages), it is but a short step for some money-hungry publisher to give in to temptation and decide that he must keep his advertiser happy – and declare (as one publisher is said to have done to his journalists) that ‘my advertiser is your reader.’ Indeed, some newspapers even refer to classified ads as ‘news you can use’ – so advertising is now news. In through the side door, then, comes the doctoring of news so as to please the piper who is paying, and in a publishing version of Say’s law in economics (bad money drives out good), bad journalism begins to drive out good. Today there is one large publisher who has openly obliterated the line that separates news from advertising by introducing a ‘paid news’ category that earlier was whispered about with reference to publications without a reputation to protect. If the practice gets established with other leading titles in the market, don’t be surprised if others who protest today decide to follow suit tomorrow.

 

Advertisers determine content in more subtle ways as well. For they are interested in publications that reach more readers in the higher socio-economic categories, with money to spend. Newspapers therefore have begun to focus editorial attention on the interests of the well-heeled, and reduced the coverage given to bread and butter issues that affect only the poor, or indeed the civic issues in the areas where the poor live. As the criticism goes, more journalists cover Lakme Fashion Week than the distress of farmers who are committing suicide week in and week out. This reflects in part the shift towards increasing the entertainment value of newspapers, in part the secession of the rich in India from the poor in Bharat (to use political short-hand), and of course the greater stress on the commercial success of publications that face more competition than at any time in the past.

Even if a publisher wants to buck these trends, he or she runs into an enormous headwind. Because the fact is that the company with the biggest newspapers, the largest sales and the fattest profits – Bennett Coleman – is usually the one that is testing the limits of what is acceptable in polite society. The equally relevant fact is (and this runs counter to the proliferation of media that one sees) that the rule of three has been seen to operate in the media industry. This rule, perhaps articulated first by Jagdish Sheth of Emory University in Atlanta, says that in most markets the leader makes a lot of money; the No. 2 makes a little money; the No. 3 probably breaks even; and everyone else loses cash.

And so it is that Bennett Coleman (which publishes the Times of India, Economic Times, Navbharat Times and Maharashtra Times – all market leaders in their categories) earns more profits than the rest of the publishing industry put together – and it is this financial muscle that allows it to start price wars on other publications’ turf, undercut rivals and eat into their markets. The other publishers have understood what this means: if they don’t make enough money to be able to invest in a fight-back, they will be history. And in a steady trickle, one and then two and then more have/will come to the conclusion that the only way to fight Bennett is to copy its tactics. Ergo, advertising rules the roost everywhere and journalists become adjuncts in a business war.

 

Some of the stock market listings of recent times are directly related to the increased competition and the fightback by those challenged in their markets. HT Media went to the stock market to raise money for the launch of its Mumbai edition, and a pitched battle on the Times of India’s home turf. Deccan Chronicle in turn went to the market to raise the money for launching new editions in Chennai (home of The Hindu) and Bangalore (once the domain of the Deccan Herald). Others, like Dainik Jagran, have listed and simultaneously gone multimedia by launching a new TV channel. So the stock market listings are an indication that the game has got bigger, and private pockets are not deep enough to finance the battles being fought for survival and supremacy.

If in doubt that journalists are now being made adjuncts in at least some media offices, consider the meaning of the ‘private treaties’ that Bennett Coleman gets into – and several have been signed. These ‘treaties’ are basically the transfer of shares in return for advertising. Bennett has surplus cash coming out of its ears, which it invests in usually mid-rung companies that are keen to jump into the big league but without perhaps the big bucks to spend on marketing. The share purchase money is immediately taken back against the promise of guaranteed advertising in Bennett publications – to build the investee company’s brand(s). Part of the deal is even said to be editorial coverage, though this remains unconfirmed.

 

If true, this by definition will have to be positive coverage. Even if that is not the case, the idea is that the brands have to be built up, so that the shares bought by Bennett gain in value and can be sold – with the added benefit that (unlike ad revenue) profits from long-term capital gains are tax-free! But from the editorial perspective, out goes the whole business of the press being a watchdog. Consider the likelihood of journalists writing negative stories about companies that have done a ‘private treaty’ with the publishing company. Logically, if not by diktat, journalists now have to write about companies in such a manner as to boost their share price.

The commercialization of news, it must be stated in its defence, is in part a response to the growing tentacles of the public relations business. PR companies were born a little over a decade ago, and have become an essential part of the media scene. As the media has grown in reach and importance, and its power to do good and ill has become magnified, so have PR clients’ needs to try and influence if not control media operations grown in importance. The methods used by PR agencies to achieve these objectives are not what you would talk about from the housetops (plain bribes are not unknown), and the enterprising publisher could well say: if the news is that important to someone, why not I make the cash and not the journalist whom I hire?

When such cynical questions get asked, retired editors are back in business before you can say Press Council, railing about the ills of contemporary journalism and how it was different in their day. But the world has changed, and the media business with it. And all the retired editors’ columns and speeches will not bring back the old, clubby world of Indian newspapers, where editors ruled, the PR guys were hangdog fellows begging you to read their press release, and the marketing guys dared not step onto the editorial floor without treading very carefully.

 

And yet, it is also true that editors are in control in a new way, by taking on the role of publishers and responsibility for the bottom line – Shekhar Gupta at the Indian Express and Vinod Mehta at Outlook are the two obvious examples. This is a new way of acknowledging that the old diarchy of business and editorial functioning in separate silos cannot continue without damage to the enterprise. At the end of the day, one person has to call the shots. And at least some newspaper owners have found that more often than not it is the editor who has the greater commitment to the business than a marketing whizkid who may move back to selling soaps tomorrow. Putting the editor in charge also gets rid of the problem of how to maintain editorial autonomy within the office. However, the more common pattern is for the publisher (usually the principal shareholder) to take on the mantle of editor as well (or editorial director in some cases). Either way, the diarchy is no more. The question in the context of unified control is whether the wall between editorial and advertising survives, or has got porous. The logical construct must be that it is not the Chinese wall of old.

 

To many of the new generation, however, all of this looks and sounds like yesterday’s battles in yesterday’s industry. The mainstream media, especially for the young, is now television – as any readership and viewership survey establishes without difficulty. Newspapers printed on dead trees will at some stage have to adjust to these new realities and re-invent themselves, as many are struggling to do in the West. Because the natural news cycle is no longer 24 hours; it is sometimes not even hours, but minutes.

TV itself is about to undergo a major change, as the country gets ready for direct-to-home TV and a conditional access system for cable homes. The question is how many channels will decide to charge, and how many will go down the route that newspapers have taken – don’t charge the viewer, be free-to-air, and hope to make mega-bucks from advertisers.

A rapidly evolving sector, with new opportunities thrown up by technology and regulation, will see new entrepreneurs making their mark, the entry of serious money into the game, and high stakes battles. In a telling comparison that speaks of the shifting balances, Prannoy Roy and Raghav Behl, through their holdings in their publicly quoted companies, may soon have more wealth to show than Shobhana Bhartia of HT Media (also a listed entity), though the first two are new entrants into the TV game and Bhartia is a third generation newspaper owner. Why, Rajdeep Sardesai and Raghav Behl, in coming together to launch IBN in partnership with CNN, have created more stock market wealth in two months than Mid-Day Multimedia has after three decades of publishing in Mumbai. Money buys talent, and so it is that the smarter journalists now get drawn to television.

But what will attract more mindspace in the coming months is the birth and steady growth (admittedly from a small base) of the internet, the rapid proliferation of websites, and the birth of a new sub-culture: interactive, democratic (no paternal editor deciding what you should read in his pages), and real-time. It isn’t hard to see the internet growing as a rival force to the press and TV, and thereby to eventually redefine the news as well as the larger media business. The most likely result that one can foresee is the commoditization of news (you can get pretty much the same news from a variety of sources), and multi-channel, multimedia accessing of news by the consumer at any time of day or night, at home or office or on the move.

 

So publications and TV channels and indeed any media organization will have to go back to the drawing boards and ask the basic questions: how and why are you unique so that the reader and viewer should come to you and not to someone else? And how will you most add value to what you are doing?

At one level, the argument would remain that content is king, and the heightened competition underlines the need for more unique, high-value content. At another level, the answer could just as easily be that brand strength and distribution muscle will determine who are the winners. At a third level, the determining factor could be speed of adjustment to (and mastery of) new technologies. Since there is never one correct answer to complex questions, expect a combination of multiple responses as the Indian media grows and multiplies, fractures and consolidates.

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