Monday, 6 March 2017

Media Ownership Patterns

The media that exists in our Country is heavily influenced by the ownership form it takes. There are a number of factors – such as content distribution, profits etc. There exist some very basic ownership Patterns.

Individual Ownership Pattern – In this kind of partnership, the Individual has control, which allows him to take decisions for the company. Therefore, he takes responsibility for all the Policy – making decisions and is also accountable for them. It is best suited for small-scale media houses, be it newspaper or news channel. An example of this are the Local Evening Newspapers that usually follow this kind of ownership control.  The News Today is a daily English Newspaper that is printed out of Chennai. It covers news, politics, economy and travel.

[Advantages] In this kind of ownership, power comes in the form of individual and absolute control, which gives the person more secrecy in options. Along with it, the individual can make decisions at his own pace (which is usually fast) and is naturally more connected with the content and the newspaper. 

[Disadvantages] However, the secrecy stops the employees from any kind of democratic participation. The owner becomes liable for the debts and losses and the rate of success depends entirely on his ability.  There is less scope for expansion and unlimited responsibility.

Partnership Ownership Pattern - As per the Partnership act 1932, Partnership is defined as ‘ the relationship between persons who have agreed to share profits of a business carried on by all or any of them acting for all. The minimum limit is 2 partners while the maximum is set to 20 partners. There are 2 kinds of partnership – General and Limited. In India, Red Chilies Entertainment is an example of Partnership.  It is a motion picture production and distribution company, it is headed by Shah Rukh Khan and Gauri Khan and operates under various divisions like Film Production, VFX, Television shows, TVC production and the IPL Team, KKR. Sanjiv Chawla is the executive producer while SRK and Gauri are the chairman and chairwoman respectively. Venky Mysore took over the CEO a few years back. 
[Advantages] In this kind of partnership, responsibility, maintenance and operation cost can be divided. People with different talents come together and pitch in their ideas and solutions which helps in the growth of the company and also sets a democratic environment for all. 
[Disadvantages] In a partnership, selfish motives of a partner might harm the firm. Lack of unity and misunderstandings might lead to losses after which each partner will have to incur and pay back his share of debt. Also, there are chances of a partnership/ business getting discontinued after the death of any partner.

Corporation – It is the one of the most common forms of ownership pattern. The minimum numbers that can be a part of it are 5. It is an association of individuals under the authority of the law, which has a continuous existence independent of the existence of its members and powers and liabilities distinct of its members. The BBC group is an example of a corporation. They are spread across web portals,  television and radio. Increasing capital can easily expand operations and transfer of control is flexible. However cooperation taxes are imposed

Group/ Chain Ownership – This form of ownership is when two or ore same mediums are handled by the same organization. They are formed without a common holding but with a chain of command.  Hindustan has 13 editions that are printed in Hindu, under HT Media. Aaj Tak and Headlines Today are two different channels but are held under the same organization i.e. India Today group.  The advantages of this kind of partnership are that financial, administrative and human resources can be centrally managed. Because of this cost of production becomes low due to best possible utilization of resources – this adds to better training, work environment and more facilities being provided. However, permanence of management is always in question because management is divided.

Employee Ownership Pattern - In this form of Partnership, employees own a major part of the share. They are also responsible for the decision- making. E.g.: Community Media like the Bangalore based advocacy group VOICES organized a gathering of community radio stakeholders. During the inception 1996, a group of radio broadcasters, policy planners, media professionals, and non-profit groups joined hands to study how community radio could be relevant to India and what policies were needed. They wanted All India Radio to allocate an hour of airtime each day to community broadcasting [Advantages] In this, Employee issues can be solved faster and it becomes easier to break interdepartmental barriers. Also, the sense of ownership that the employees own helps the organization to grow faster. 
[Disadvantages] However, it gets difficult to induct new people and employees tend to get more preference than the benefit of the organization. It also becomes difficult to take quick decisions.

Vertical Ownership Pattern- In this, an organization owns or operates different media enterprises or some other enterprise under the same ownership. E.g: India Today Group, Living Media or Big Media-Reliance group. The India Today Group has Mail Today, Business Today, Aaj Tak and Headlines Today under itself – making it a combination of magazines, newspapers and TV Channels, yet they still fall under the same ownership i.e. the India Today Group. [Advantages]  It helps to promote different enterprises at the same time and reduced general expenses but [Disadvantages] in this management may not be able to devote sufficient time to any one particular media. Also, since the capital is invested in all media forms, a particular media form might not get the attention that it ought to.

Prevalent Ownership Pattern - The 3 types of prevalent ownership patterns are Conglomerate, Company and Trust.

1. Conglomerate ownership Pattern – It is a combination of two or more companies engaged in different business that fall under one corporate structure. A Media Conglomerate is a multi industry company that owns a large number of companies in various media such as TV, Radio, and Internet etc. 
Examples are Viacom, Living Media Ltd., The Walt Disney Company, Bennett Coleman & Co. Ltd. Etc. Viacom is the fourth largest conglomerate in the World after the Walt Disney, News Corporation and Time Warner. Viacom has its assets in Nickelodeon, Paramount pictures, MTV, Comedy Central, VH1 etc. Reliance Industries Limited are also an example of one of the most famous conglomerates in India.

Examples are Viacom, Living Media Ltd

[Advantages] – The Diversification results in reduction of investment risk and creates an internal capital market. Also, the downturn suffered by one subsidiary can be counterbalanced by another. 
[Disadvantages] However a lack of focus and culture clashes can destroy the value. This form tends to have extra layers of management, which increases the cost.

2. Company Ownership Pattern - In this type of ownership, the company owns the media. The same company tends to have listed shares in the share market. For eg: HT media has shares in BSE, NSE, KK Birla Group has 69% stake in HT Media, HT manages newspaper, radio etc. similarly, Reliance has a stake in GBN(Global Broadcast News) which operates the English channel CNN-IBN and Hindi channel IBN7.

3. Trust ownership Pattern - A trust is a relationship whereby property (real or personal, tangible or intangible) is held by one party for the benefit of another. An example of this is the The Tribune Trust. It was founded on 2nd February 1881 by Mr. Sardar Singh Majithia and is run by a trust comprising of 5 trustees. It enjoys worldwide circulation and publishes 2 other newspapers also – The Punjabi Tribune and Dainik Tribune. This kind of partnership focus more on welfare and not on profit making. Advantages of this ownership pattern are that it focuses on real news rather than sensationalizing it. There are also not too many people which result in lesser clashes and more harmony. However, they might face a shortage of funds. Sometimes, it also takes time to reach the masses, as they don’t indulge in promotional activities.

These ownership patterns decide the business models, profit engagement and the content produced and distributed by the Media.  Financial flows, recovery of costs for creating, assembling and presenting the product are all determined by their outcomes.