Thursday, 9 March 2017

Business models emerge and affect the production of content in the media

Political economy was the original term used for studying economic phenomena like production, buying, and selling of products and services, and their relations with law, custom, and government, as well as with the distribution of national income and wealth. Political economy originated in moral philosophy. It was developed in the 18th century as the study of the economies of states, or polities, hence the term political economy. 
Political Economy

Today, theories of political economy focus on the politics and economics of media institutions and the texts they produce. Some traditions of political economy also consider how capitalist politics and economics exert themselves on media audiences. While viewing the relationship between media and political economy, it is important to see the latter’s association with classical Marxist theory and Marx’s statement (back in 1859) that social consciousness is determined not by the collective will of individuals but by the ruling classes who own the means of capitalist production. Thus, the form and content of our media and the social consciousness which nurtures the media, is affected less by the opinions of the majority and more by the financial motives of the rich who control the economics of our media.

Karl Marx

There are primarily two aspects of media’s political economy which have gained maximum visibility over the past few years. These aspects are patterns of media ownership (and the thus emerging models of businesses) and the concept of paid news. They are often seen over-lapping each other.

Media Ownership Trends

The question ‘Who owns the mass media?’ is a rather difficult one 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. These features, as identified by renowned journalist Paranjoy Guha Thakurta, are:

The sheer number of media organisations and outlets often conceals the fact there is dominance over specific markets and market segments by a few.
The absence of restrictions on cross-media ownership implies that particular entities dominate markets both vertically (i.e., across different media such as print, radio, television and internet) as well as horizontally (namely, in particular geographical regions).
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.
The growing corporatization of the 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 which means the media content is bound to get influenced by factors like social acceptance and popularity.

The emergence of corporate entities in the media is the cause of an increasingly globalised but homogenized communication landscape, despite the growth of internet technology bringing about democratization by allowing for more user-generated content. 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.
In the political economy of the media there is clearly an alarming absence of not-for-profit media organisations. Neither subscription - nor advertising revenue-based business models of the media have been able to limit this tendency of large sections of the corporate media to align with elite interest groups. This is the reason why certain news items get more coverage than others. For instance, major business houses having financial interests in the Indian Premium League promises the league much more media coverage (both in terms of time and space) than other sports. And what ensures the business houses’ inclination towards IPL is the age-old populist philosophy. The media is also perceived as an active political collaborator 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. 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, Hindustan Times, and The Economic Times, would account for over three-fourths of the total market for all English dailies.

Whenever calls have been made for putting in place certain restrictions over media ownership and control, media conglomerates have unanimously refused the idea saying it would invite devilish forms of press control and censorship. Many different arguments have been proposed in this regard - 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. 
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.

However these corporate bodies fail to acknowledge the lop-sided reportage of news organizations, caused by restrictions imposed by corporate policies, which lead to a society with half-baked opinions and ideas. Another issue which needs to be taken into account is that today 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. And so, a report submitted by the Telecom Regulatory Authority of India (TRAI) in 2009 suggests that restrictions can no longer be placed on “companies” but on “entities” or groups, which would include large groups and conglomerates such as BCCL and Dainik Bhaskar.

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.

In January 2012, the Mukesh Ambani-led Reliance Industries Limited (RIL) – India’s biggest privately-owned corporate entity 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 was to 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.

In May 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).

Deals like the these raise 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.

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 multi-fold. 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.

It is also very interesting to note that 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, the decision-makers of our media are people who have probably never even studied or practiced the discipline of Journalism.

Paid News

Paid news or paid content are those articles in newspapers, magazines and the electronic media, which indicate favourable conditions for the institution that has paid for it. The Press Council defines Paid News as “any news or analysis appearing in any media (print or electronic) for a price in cash or kind as consideration.” The news is much like an advertisement but without the ad tag. This kind of news has been considered a serious malpractice since it deceives the citizens, not letting them know that the news is, in fact, an advertisement. Secondly, the payment modes usually violate tax laws and election spending laws. 

In 2003, Bennett Coleman Company Limited (publishers of The Times of India and The Economic Times, among other publications) started a “paid content” service - Medianet, which enabled them to charge advertisers for coverage of product launches or celebrity-related events. Many senior journalists criticized this initiative saying it is equivalent to buying and selling of media ethics. The idea of a newspaper entity taking money for performing its primary function of bringing out news seemed blasphemous. Bennett Coleman Co. Ltd. justified the concept of Medianet in an article in The Economic Times - '… all those shouting from the roof-tops admonishing sponsored stories have also turned a blind eye to the fact that some stories get into their newspapers, after veiled deals between public relations agencies and large sections of the media’. Indeed, some TOI journalists believe that blatant 'planting' of news and photographs by journalists acting in sync with PR agencies had triggered off the Medianet initiative. This article labels it as an attempt to “bring about more transparency and disclosure to the entertainment and lifestyle supplements of the group.”

In the run-up to the 2009 Lok Sabha elections, the practice of “paid news” emerged and became widespread in the political arena. This was the year when former Congress Chief Minister of Maharashtra, Ashok Chavan’s poll campaign for the State legislature drew scores of full pages of “news” wherein not a single one of those pages ever mentioned the name of Madhav Kinhalkar, his rival for the Bhokar seat. In a 2009-10 investigation into paid news, The Hindu found an article on Mr. Chavan that appeared word for word in three major rival publications. In two of them, on the same day - all of under different by-lines.
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 revealed what had long been an open secret: the collusion and uncomfortable closeness among corporate units, politicians and journalists. 

The real challenges that lie ahead for the media in India are to ensure that growing concentration of ownership in the media 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”.