Cross Media Ownership in India: Cause for Concern?

The following post is by Shashank Atreya, a student of School of Law, Christ University, Bangalore. He is a founding member of the Committee on Public Policy and Governance, School of Law, Christ University, and has headed research panels drafting suggestions to the Parliament Standing Committee and Law Commission. Shashank is a Media Law enthusiast, and vouches for net neutrality. He brings us a detailed analysis  on TRAI’s recent suggestions on Cross Media Ownership, which formed part of it’s recommendations to the Law Commission of India. 


The media plays an important and multiple roles in society. The most obvious of these are collection and dissemination of information, communication and entertainment among the people. Further, through its reach to the people the media also transmits social and cultural values and serves as a medium of education. Thus by providing information the media can inspire and generate political social ideas and aid in shaping policy agenda and priorities.

The Indian media industry has been experiencing steady growth over the last few years and the sector has also attracted large foreign investments (TV-18, CNN). Over the last decade, there has been diversification of Indian media into multiple sectors and this has created an atmosphere of inter-sectoral relationships.

Since media has evolved and brought upon itself important roles and responsibility in a democratic society, ownership issues in its sector have emerged as an important policy issues. There is a considerable amount of debate in other jurisdictions on ownership plurality, leading to plurality of views being expressed, which is obviously in the interest of democratic values. What concerns us is the lack of plurality views due to ownership constraints, and the consequent damage to editorial independence.

Although there have been no established cases of media monopoly, the recent takeover of a prominent media house by an industry leader has raised eyebrows over an absence of legislations or specific regulator in dealing with possible issues of media monopoly. The below table indicates the reach different forms of media have and how it is clearly indicative of the possible influence it could have on shaping societal views.

Size n 2008 ( Rs. Billion) Viewership/Penetration (Million)
Television 584 730
Print Media 172.6 181
Radio 8.4 159

The following data definitely reflects concern over the neutrality of fourth estate and if plurality is maintained while reporting.

TV Channels Print F.M Radio
Sun TV Yes Yes Yes
Essel Group Yes Yes Yes
India Today Group Yes Yes Yes
Malayala Manorama Group Yes Yes Yes
Times Group Yes Yes Yes

Source: Adminstrative Staff College Report and FICCI –PWC Media and Entertainment Review 2012

( More detailed data is available here.)

The above table is clearly indicative of prevalence of cross media ownership in the country. Moreover, large number of entities who own multiple platforms of media also have a large percentage of the shares. A suitable example in this regard would be Sun TV Network, 77% of the shares of which are owned byMr Kalanithi Maran. Kal Radio, which has been promoted by Sun TV, is again an establishment of which Mr. Maran holds shares in an individual capacity as well as a promoter of Sun TV.

Thus a major motivation behind the restrictions on cross media ownership is to preserve the diversity of media so that citizens have access to diverse viewpoints that enable them to have access to a wide variety of views and thereby participate fully in democratic process.

WHY IS THE TRAI RECOMMENDING?

The Ministry of Information and Broadcasting requested the authority to look into the specific issues of cross media ownership amongst others. The MIB also in the past requested the Administrative Staff College to engage in a comprehensive study of cross media ownership. The institution submitted an overview of cross media ownership in 2009. The study 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.

WHAT IS THE TRAI RECOMMENDING?

In its introductory chapter, TRAI says that the objective of its recommendations is to achieve plurality of views and opinions in media. It states:

The objective of these recommendations is not, in any sense whatsoever, to curb the media or deprive it of its rights – that, in fact, would be a disservice to the Indian citizen – but to put in place suitable safeguards that would ensure citizens the right to obtain objective, unbiased and diverse views and opinions.

The suggestions which partly borrow from concepts first mooted in a 2009 report on media ownership by the Hyderabad-based Administrative Staff College of India (ASCI), TRAI manages to negotiate these complexities with fair success. It looks into number of factors affecting cross media ownership and substantiating on most of them. However it is important to note that the TRAI has not taken into account magazines and the Internet, citing a limited reach for the Internet and limited circulation for magazines, and focused only on the TV and Print, due to their pervasive reach and influence. TRAI also undertook a study into the International practices to understand control in media. TRAI places reliance on companies’ act 2013 to understand the term ‘Control’. It is with these foundations, TRAI makes the following recommendations:

1) DEFINING CONTROL: The TRAI highlights the difference between ownership and control of a media outlet, saying that ownership implies economic benefit (shareholding) while control implies the ability to influence. The TRAI relies on the Companies Act 2013 to define the threshold of equity holding that defines control, via associate, subsidiary and relative holdings, but extends the definition of associate companies to also include control through loan and debt instruments.

From an anti-trust perspective, the authority has recommended the usage of the “Herfindahl Hirschman Index” to ascertain the concentration of media within specific states, to ensure that there is adequate compensation, and give media companies two years to diversify.

2) DEFINING THE MARKET WHERE DOMINANCE CAN BE IDENTIFIED: Given opinion from stakeholders that it might not be right to restrict publications by language, and others who suggested geographic boundaries, the TRAI has recommended that the market be a combination of both; the language in the state where it is the dominant language, and for English, pan-India.

The TRAI has recommended that Mergers and Acquisitions (M&A) in the media sector will be permitted only to the extent that the rule based on HHI. TRAI recommends that the media ownership rules to be reviewed three years after they are announced, and once every three years thereafter.

3) PRIVATE TREATIES: Given the inherent conflict of interest arising from practices such as ‘private treaties’, the Authority recommends that such practices be immediately proscribed through orders of the Press Council of India, or through statutory rules and regulations. This would cover all forms of treaties including (i) advertising in exchange for the equity of the company advertised; (ii) advertising in exchange for favourable coverage/ publicity; (iii) exclusive advertising rights in exchange for favourable coverage.

4) PAID NEWS: The Authority recommends that in “advertorials” (for that matter any content which is paid for), a clear disclaimer should be mandated, to be printed in bold letters, stating that the succeeding content has been paid for, and a fine print will not suffice. Also, “it is imperative that liability reposes in both parties to the transaction if it is tried to be passed off as news. For instance, if an MP/ MLA seeks favourable coverage in the media in exchange for payment, then if such coverage was given in the garb of ‘news’, responsibility would be that of both parties, not only of the politician. The best way to understand ethical practice in this regard is to look at legally India posts, where they flag sponsored posts.

 5) VERTICAL INTEGRATION: Vertically integrated companies are those that own the hole or most of the chain of production of the good or service they are selling. In the media industry, imagine a newspaper that not only owns the plant where they make the paper, but also owns the paper company, the ink company, the distribution truck company.

The entity that controls a broadcaster or the broadcaster itself, shall be permitted to control only one Distribution Platform Operator (MSO/HITS operator or DTH operator) in a relevant market and vice-versa. If a vertically integrated DPO, while growing organically or inorganically, acquires a market share of more than 33% in a relevant market, then the vertically integrated entities will have to restructure in such a manner that the DPO and the broadcaster no longer remain vertically integrated.

CONCLUSION

The current sets of regulators for different forms of media are toothless in regard to handling an issue this complex. Hence, a comprehensive regulatory framework for media needs to be drawn up for oversight on potential anti competitive behaviour and outcomes in a fast growing and technologically developing sector. Coordination mechanism between the Competition Commission of India and the regulator must exist in order to curb potential anti competitive activity. The framework would also be required to address cross media issues governing print broadcasting and the new media. And restrictions on cross media and vertical integration needs to be based on detailed market studies and should be periodically revised.

The current state of media does raise alarms over threats of cross media ownerships disturbing neutrality of news reported. The print media and public agencies have ignored and not given journalist space for reporting to take place on a critical issue such as this. In disagreement to public perception I believe the media to be at a crucial juncture and a comprehensive framework to stabilize media can help sustain democratic values and editorial independence.
SUGGESTED READING(s):

Cross media currents, Shashi Kumar http://www.frontline.in/columns/Sashi_Kumar/cross-media-currents/article4478587.ece

Striving for plurality in media – the promises and shortcomings of TRAI’s recommendations on media ownership: Smarika Kumar, http://kafila.org/2014/09/08/striving-for-plurality-in-media-the-promises-and-shortcomings-of-trais-recommendations-on-media-ownership-smarika-kumar/#more-23550

Broadcast regulation and public right to know, Sukumar Murlaidharan http://www.jstor.org/discover/10.2307/4419303?uid=3738256&uid=2&uid=4&sid=21104665420967

The TRAI Report on Media Ownership: The press curious response http://www.epw.in/commentary/trai-report-media-ownership.html

Paid News: Standing Committee report http://www.prsindia.org/administrator/uploads/general/1369825896_SC%20summary%20-%20Paid%20News.pdf

Media and Governance in Pakistan: http://www.initiativeforpeacebuilding.eu/pdf/pakistanOct.pdf

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