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News Media Management

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IDEAL MANAGEMENT STRUCTURE

An ideal management structure in a newspaper or broadcast channel is one which ensures free flow of information, allows informed comment and unbiased analysis.

 

In any organization, including a newspaper, authority flows from the top. Therefore, the most important person in the organization is one who occupies the highest position and directs all other activities. It is usually the Managing Director or the Chief Executive Officer. These are the top people who coordinate all activities in the running of the newspaper or broadcast channel.

 

The MD or the CEO coordinate the work of all departments and it is to them that all disputes are referred to. Both report to the Board or the managing committee (headed by the chairman). The board decides the policy matters and objectives of the newspaper/channel, profits to be targeted and the pace of progress to be maintained. The board also specifies the activities to be undertaken and defines how the relationships between all departments should be.

 

The board does not take part in the day-to-day operations but allows the departments to run on specific parameters while granting them certain degree of freedom.

 

All departments function directly under the MD/CEO, but the editorial decisions (selection of news, display, layouts etc) are the complete prerogative of the editor.

In short, the board or the top management:

  1. a) Decides objectives, policies
  2. b) Prepares estimates of budget
  3. c) Financial adjustments like loans
  4. d) Decides ad rates, selling price of the paper
  5. e) Launching new editions or closing existing ones
  6. f) Organisation control and discipline
  7. g) Evaluating overall progress

Sometimes, the board may have to confirm a decision taken by the editor or other heads of departments. The best organization is the pyramid type where authority flows from the top and its decisions are obeyed without questions. In a functional type of management, each department has a fixed responsibility so that there is no duplication or confusion. All the respective heads would report to the MD/CEO whose duty it is to ensure that all objectives and policies laid down by the board/owner(s) are implemented.

 

Problems begin when one department interferes in the work of another. For instance, when the ad department takes upon itself the role of reporter/editor and insists on publication of some commercial news or events which have purely PR value.

 

The best-run newspapers have strong, well-knit administrative departments so that efficiency is maximum. Normally, the size of the newspaper, the environment of the area of its circulation and business go into the nature and size of the administrative department of a newspaper.

 

The board also looks into the external relationships of the paper. ie dealings with government, judiciary or other business houses. A dynamic CEO/MD is always able to infuse the right spirit among all departments. At times it is also advisable for the top rung to take their staff into confidence and involve them in decision-making. This ensures greater transparency and better inter-personal relationships in the organization.

 

These days, newspapers and channels have become a commercial enterprise. Hence the line between advertising and news is becoming thinner. In such a scenario, the role of the editor becomes crucial. As commercialization takes over, the editor’s role often comes under threat because news value is decided purely on the basis of its commercial profitability and not on its public utility or appeal value. This is an era of glossy production, stiff competition, brand equity. However, a good media house never compromises on the credibility factor which overrides all commercial considerations. A newspaper or a channel is no doubt a consumer product today, but it still has to do the role of giving credible, authentic and reliable news/information. Even today, the printed word is believed in and relied upon by a vast majority of people. Hence truthfulness should be the watchword in any media house.

 

Most newspapers do not accept advertisements of astrologers, cigarettes rand liquor. They also scrutinize advertisements of unverified and unsubstantiated claims of miracle cures for various ailments or magic remedies. The basic motto of any media house should be “Never mislead your readers/viewers.”

 

IDEAL MANAGEMENT STRUCTURE

An ideal management structure in a newspaper or broadcast channel is one which ensures free flow of information, allows informed comment and unbiased analysis.

In any organization, including a newspaper, authority flows from the top. Therefore, the most important person in the organization is one who occupies the highest position and directs all other activities. It is usually the Managing Director or the Chief Executive Officer. These are the top people who coordinate all activities in the running of the newspaper or broadcast channel.

The MD or the CEO co-ordinate the work of all departments and it is to them that all disputes are referred to. Both report to the Board or the managing committee (headed by the chairman). The board decides the policy matters and objectives of the newspaper/channel, profits to be targeted and the pace of progress to be maintained. The board also specifies the activities to be undertaken and defines how the relationships between all departments should be.

The board does not take part in the day-to-day operations but allows the departments to run on specific parameters while granting them certain degree of freedom.

All departments function directly under the MD/CEO, but the editorial decisions (selection of news, display, layouts etc) are the complete prerogative of the editor.

 

In short, the board or the top management:

 

  1. a) Decides objectives, policies
  2. b) Prepares estimates of budget
  3. c) Financial adjustments like loans
  4. d) Decides ad rates, selling price of the paper
  5. e) Launching new editions or closing existing ones
  6. f) Organization control and discipline
  7. g) Evaluating overall progress

Sometimes, the board may have to confirm a decision taken by the editor or other heads of departments. The best organization is the pyramid type where authority flows from the top and its decisions are obeyed without questions. In a functional type of management, each department has a fixed responsibility so that there is no duplication or confusion. All the respective heads would report to the MD/CEO whose duty it is to ensure that all objectives and policies laid down by the board/owner(s) are implemented.

Problems begin when one department interferes in the work of another. For instance, when the ad department takes upon itself the role of reporter/editor and insists on publication of some commercial news or events which have purely PR value.

The best-run newspapers have strong, well-knit administrative departments so that efficiency is maximum. Normally, the size of the newspaper, the environment of the area of its circulation and business go into the nature and size of the administrative department of a newspaper.

The board also looks into the external relationships of the paper i.e. dealings with government, judiciary or other business houses. A dynamic CEO/MD is always able to infuse the right spirit among all departments. At times it is also advisable for the top rung to take their staff into confidence and involve them in decision-making. This ensures greater transparency and better inter-personal relationships in the organization.

These days, newspapers and channels have become a commercial enterprise. Hence the line between advertising and news is becoming thinner. In such a scenario, the role of the editor becomes crucial. As commercialization takes over, the editor’s role often comes under threat because news value is decided purely on the basis of its commercial profitability and not on its public utility or appeal value. This is an era of glossy production, stiff competition, brand equity. However, a good media house never compromises on the credibility factor which overrides all commercial considerations. A newspaper or a channel is no doubt a consumer product today, but it still has to do the role of giving credible, authentic and reliable news/information. Even today, the printed word is believed in and relied upon by a vast majority of people. Hence truthfulness should be the watchword in any media house.

Most newspapers do not accept advertisements of astrologers, cigarettes and liquor. They also scrutinize advertisements of unverified and unsubstantiated claims of miracle cures for various ailments or magic remedies. The basic motto of any media house should be “Never mislead your readers/viewers.”

 

LEGACY MEDIA

Legacy Media, also known as the Old Media are traditional means of communication and expression that have existed before the advent of the new medium of the Internet. Industries that are generally considered part of the old media are broadcast and cable television, radio, movie and music studios, newspapers, magazines, books and most print publications.

 

Although studies suggest that New Media, primarily the Internet, is increasingly getting stronger, replacement of Old Media is not a widespread phenomenon quite yet.

 

The advent of New Communication Technology (NCT) has brought forth a set of opportunities and challenges for conventional media. The presence of new media and the Internet in particular, has posed a challenge to conventional media, especially the printed newspaper.

 

It is believed that the conventional media is going through a period of depression and is slowly losing out to the New Media.

 

Advertising revenues are dropping due to the severe economic downturn, while readership habits are changing as consumers turn to the Internet for free news and information. Some major newspaper chains are burdened by heavy debt loads.

 

As in the past, major newspapers have declared bankruptcy as several big city papers shut down, lay off reporters and editors, impose pay reductions, cut the size of the physical newspaper, or turn to Web-only publication. The latest example is that of reputed newspapers like Hindustan Times and The Telegraphy shutting down editions or retrenching people for lack of financial viability.

 

It is believed that the challenges faced by conventional media, especially newspapers has to do with the global economic crisis, dwindling readership and advertising revenues, and the inability of newspapers to generate money for their online efforts. The emergence of online services like the LinkedIn has eaten away a major share of classified advertisements. The situation has worsened with a depressed economy forcing more readers to cancel their newspaper subscriptions, and business firms to cut their advertising budget as part of the overall cost-cutting measurements. As a result, closures of newspapers, bankruptcy, job cuts and salary cuts are widespread.

 

The broadcast media like the radio, cinema and television and the Print media like the newspapers and magazines form part of the Legacy Media have not been able to sustain competition

BROADCAST MEDIA OVERVIEW:

Broadcasting is the distribution of audio and/or video content or other messages to a dispersed audience via any electronic mass communication system. Over-the-air-broadcasting is usually associated with radio and television, though in recent years both radio and television transmissions have begun to be distributed by cable (cable television). Broadcasting focuses on getting a message out and it is up to the general public to do what they wish with it. While there is a proliferation of TV channels in the last decade, the conventional radio has been replaced with FM channels who cater to a different audience altogether.

 

PRINT MEDIA OVERVIEW:

The structure of the Indian print media industry is highly fragmented with importance to regional dominance. The Indian print media segment primarily comprises newspaper and magazine publishing. Book Publishing also forms part of the print media though the share is not substantial.

 

The print media is further divided on the basis of the languages. Of the daily newspapers, about 46% are vernacular, 44% are in Hindi and 10% are English. Hindi and vernacular language newspapers offer a local and regional flavor to their readers. The content and circulation of English-language newspapers, on the other hand, are largely focused on the primary urban centers. The newspaper industry is regionally divided, with existing players enjoying strong brand loyalty. For e.g. Times of India follows strong brand loyalty in Mumbai and it was difficult for Hindustan Times to enter Mumbai.



MANAGEMENT ROLE IN ENSURING EDITORIAL FREEDOM

Responsibility, credibility and quality are key words for a large, serious media group. This applies in relation to the users of our media, customers, employees, shareholders and the societies in which we work.

 

At the forefront, however, is the publishing responsibility: to safeguard editorial independence and freedom of speech in the media which we own. Free media are among the main contributors to strong, live democracies.

 

A credible, strong media should defend important values such as religious freedom, tolerance, human rights and democratic principles. They must reflect a diversity of opinion. For this reason, they should also provide different ways of looking at issues and views on important questions in public debates.

 

The management must facilitate editors in complying with the legislation and ethical regulations of the country where the operations take place. Editorial quality and credibility are the cornerstone of publishing activities and these, together with the individual medium’s articles of association, form the basis for the editors’ work. The editor-in-chief has full freedom and is personally and fully responsible for the content of the medium of which he or she is in charge.

 

However, there are only few publications that allow their editors with total freedom. In reality, an independent press is a myth. Or at best, a glorified term. Most editors dare not write their honest comment/opinion. In other words, they are sometimes paid to keep their honest opinions out of the paper. And if they do defy the management, they would soon be out on the streets hunting for a new job.

 

Most managements have vested interests – political, social and cultural in running the paper, which may not gel with the opinions held by the editors they employ. It is here that the editors have to either compromise with their editorial values or pay a price for standing up to them.

 

In private, corporate media environments, editorial hiring and firing are the preserve of the owners. Media houses (read owners) have become highly profit-oriented organizations. So editorial values are always at stake  Distortion of news and comment in such a scenario becomes the order of the day. Most owners hand-pick their editors so that the policy of the owner becomes the policy of the editor. Dissent is seldom allowed

 

It is media owners who possess the greater weapon today – i.e., one useful against incumbent politicians fearful of bad press, lack of access, and endorsement of opponents. This sorry, quid-pro-quo, relationship leads to media corruption, benefitting only the ruling, corporate, class.

 

Managements giving complete editorial freedom is therefore rare. But any newspaper which enjoys more flexibility and freedom from their management, has the potential to make greater impact and live up to the reputation of a frank, fair and fearless media.

 

Today’s concentration of media ownership and editorial power brings into sharp focus not only the immense responsibility, but also the freedom and estate of editors – in particular those with huge audiences. Yet it is major-media owners, and their hand-picked editors, who decide what the vast majority see, hear, and read. Media owners and their editors have become the unelected, and unregulated, keepers of the public trust and molders of the public mind.

 

HUMAN RESOURCE DEVELOPMENT

It was around the mid-seventies that the newspaper industry in India transformed into big-time business. This was the period when newspapers adopted better technologies and focused on recruiting employees who were skilled for the job.

 

It was also around this time that the reading public sought more information. This was partly because the people in the country were blacked out from reading authentic news/information because of a dark chapter called Emergency. A censorship was imposed and news was either shut off or manipulated to mislead readers.

 

The advent of computers speeded up communication technology. Use of satellites facilitated simultaneous printing of editions.

 

A news organization is a dynamic set up. Therefore all newspapers have to fill and refill their cadres of journalists. These include, reporters, editors, jockeys, anchors, news readers etc. Big newspapers have a special HRD department that spots talent, recruits them, and trains them in modern communication practices. It helps the new recruit to familiarize with the work culture of that paper and coordinate to that extent.

 

Prominent newspapers have their own training schemes for their journalist and non-journalist employees. The television media lays a great emphasis on in-house training since, it has to have people directly dealing with its viewers as anchors and readers.

 

Some newspapers go in for campus recruitments. Those colleges that offer BMM curricula. The logic is such qualified recruits need less training. Earlier, newspapers had to give elaborate training (and also had to depend on the flair) to a raw recruit.

 

The three key areas are editorial, advertising and circulation. In these departments, the newspaper needs to have people who are trained for the job. The employees of these three departments are also taught to work in coordination.

 

The editorial recruits have to be taught the concept of news, and ethics of good journalism. The ad recruits are taught to garner as many ads they can without resorting to unethical means (ex desisting from liquor/cigarette ads etc) while the circulation recruits are ingrained into understanding how new circulation can be won. However, all recruits are also made to go about their job, keeping in mind the financial health and other needs of the newspaper.

 

BRAND SPONSORSHIP: Big newspapers who have reserve funds, manage to hold public shows, not only to create their brand, but also rake in some profits. Prominent examples are Filmfare Awards and Femina Miss India contests. These functions are well patronized (Manikchand, the gutkha makers would sponsor the Filmfare Awards) and have now become brands by themselves. They also strengthen commercial bonds.



FINANCIAL MANAGEMENT

Newspapers today are big business. Unless a newspaper’s finances are sound, it cannot expect to be in business for long. Thus management of finances in newspapers assumes great importance.

 

To run a newspaper efficiently, huge amounts are needed. Plus this, it also needs to have additional, reserve funds to take care of unforeseen expenses and meeting further targets. There has to be a balance between the outflow and inflow of finances. The outgoings comprise of salaries, costs of raw materials, capital expenditure and taking care of loans and overdrafts. With so many factors to take care of, continuous planning and coordination of all sources of income and expenditures has to be done. The responsibility to ensure that its finances are on a sound base, newspapers have a Business Manager or a Financial Director. He always seeks the help of ad, circulation and editorial departments to discharge his duties effectively.

 

Inability to manage finances often leads to a newspaper losing its independence which is its most important asset/characteristic. A financially sound paper can always report facts fearlessly and independently without compromising on the ethics.

 

The first responsibility of any newspaper is to earn profits to print the truth as it is. The richer it is, the more fiercely independent it is. With technological advances, most newspapers go in for expansion. This includes increasing the number of editions to attract a wider circulation and business. Most big newspapers like the Times of India, Indian Express, The Hindu and the Eenadu have multiple editions.

 

HUSBANDING FINANCES:

Planning and forecasting are the first steps to effective financial management. Funds allocation on small-term and long-term investments and targets have to be chalked out. Planning involves the financial objectives of the paper, policies and management of its existing capital.

 

However, this is possible only in big-size papers which make profits. Newspapers which lead a hand-to-mouth existence often find themselves in a financially precarious situation. When the planning part is taken care of, it becomes easy for the paper to decide on its selling price and advertisement tariffs. It also enables it to formulate its marketing strategies. It is the finance department that determines whether news editions are viable or, news mergers are possible.

 

The finance department thus has to draw up estimates for the future – normally for the current year. It has to draw the budget, prepare balance sheets, evaluate its assets, liabilities and its net worth so that finances are under control.

 

The finance department also has to coordinate with agencies like the Audit Bureau of Circulation (ABC), The Indian Newspaper Society (INS), The Editors’ Guild and the Registrar of Newspapers (RNA). These are compulsory. Plus, the department also has to provide its income tax details and provide for an audit of its accounts.

 

MANAGING FINANCES:  

Management of finances involves:

  1. a) Providing financial resources as and when required.
  2. b) Optimising profits and promoting growth.
  3. c) Planning and controlling in coordination with heads of other departments to expand, diversify and restructure.

d)Increasing productivity while cutting down costs and eliminating wastage.

e)A frequent review of resources.

 

NEWSPAPER REVENUE:

There are two major sources of revenue for a newspaper — from the sales and advertisements. Advertisements are classified into following categories.

  1. a) Classified

b)Display

  1. c) Colour
  2. d) Specified positions solus, front page, right hand side, ear panels, in the middle of a news story or sometimes even merging with the story.    

 

The advertisement rates are decided per centimeter per column. Rates are charges as per the category of the ad. Special positions and colour attract higher tariff. Newspapers are supposed to adhere to a ratio 40:60 in ad-news. However, most newspapers flout it to garner more profits. In recent times, it seems to have become a trend to present promotional (PR) matter as editorial reports/stories. The newspaper charge separate rates for such ad-news called advertorials.

 

GLOBALISATION, LIBERALISATION & FDI

The last two decades have shown how technology development has brought about a big change in the media. Newspapers and electronic channels have become commercial and corporate giants who are out to make their impact across a wide territory. They have acquired a status and authority that they did not have around two decades back.

 

Finance is the nerve-centre of the media. It therefore has to strive to increase its reader base and also increase its income through various means without compromising on its integrity.

 

The readers and viewers of today have a wide choice. The print media is facing a stiff challenge from the electronic media. In order to sustain the competition, most newspapers have resorted to crass commercialization (like “paid news” and unethical ads on liquor and cigarettes) with the result that decent readers are none too happy about it.

 

The managers of the print media argue that they have little choice but to resort to such methods for surviving the market competition. They cite newsprint crisis, economic recession and challenges posed by the Internet, cable and satellite broadcasting as the main reasons.

 

Newspapers in India are priced low. Hence they depend on ad revenue to keep going. They have to circulate well to get an ad revenue which not only makes up for the deficit, but also to earn profits. In recent times, growing technology has also increased maintenance costs. Technology upgrade and modernization costs a lot .With globalization and liberalization, the volume of advertising has also gone up. Usually, the bigger newspapers get the bulk of ad business while the smaller newspapers have to lead a hand-to-mouth existence. Smaller papers depend on local and government ads.

 

Just how stiff the competition between the print and electronic media is can be understood by the fact that while the former reached 65% of the population, TV reached 82%. The TV ate up a lot of newspaper ad revenue.

 

It was this situation that drove many newspapers to seek foreign investment. In June 2002, the Government of India allowed Foreign Direct Investment (FDI) to the extent of 26%. But the government made it clear that such investment would be scrutinized before being okayed. However, many prominent editors argued that such investment would make Indian newspapers vulnerable to foreign intervention. With a foreign agency investing money in Indian papers, they would obviously in a position to dictate terms.

 

Those in favour of FDI felt that in the current global context, many foreign publishing houses would like to invest in India considering the business and readership involved.

 

They also felt that FDI will change the way people think about news and views. FDI could enable papers to adopt latest technologies and also bring in professionalism.

 

There are advantages and disadvantages with FDI. It could change the authority controlling the paper and therefore, the way news and views are presented. It could also put in danger national security. In fact, these risks prompted the government to limit FDI only to 26%.

 

FDI has been welcomed in many industries on terms and conditions laid down by Government of India.

 

The main objective of the FDI is the transfer of managerial skills and technical knowledge. The government has permitted FDI to the extent of 49% in the media if the management remains in Indian hands.

 

The government stipulated that the editorial and management should remain in Indian hands. Three-fourths of the editorial staff and board of directors should be scrutinized by the government before being allowed entry.

 

Over 35 major newspapers were opposed to the FDI. According to them, even a 26% stake would affect their ownership rights adversely.The Times of India group and the BBC Worldwide have agreed to develop Filmfare and Femina under the FDI guidelines.



What is FDI?

 

Foreign direct investment is relevant when a company makes an investment by buying another company or diversifies business in a nation other than in which it is based. The investment made through FDI becomes a source of external finance which could strengthen the economy.

 

How do companies benefit?

 

Some of the advantages for companies who choose to invest in other countries are tax exemptions, lower cost of working capital, access to foreign markets and expansion of business.

 

What is the difference between a franchise (eg: Dominos, Pizza Hut) and an FDI module?

 

Many companies have established their franchised business in India so how is the FDI module different?

 

In a franchising arrangement, the franchisor usually does not make any contribution to the business in terms of equity. According to Franchise India, the franchisors contribution is in terms of grant of rights for the use of their intellectual property and business method. The equity is contributed by the Indian franchisee and the economic interest of the franchisor is limited to the franchisee fees that he receives from the franchisee. Whereas an  FDI occurs when an investor, based in one country (the home country), acquires some asset in another country (the host country) with intent to manage the asset.

 

Some arguments in favour of FDI:

  • FDI will generate employment in the country it invests
  • It could benefit farmers by eliminating middlemen
  • FDI gives consumers a wide variety of products to choose from at reasonable prices
  • It can improve food distribution systems
  • FDI can bring in better quality and standard products
  • FDI can increase the standard of living through its goods and services
  • It could raise the bar among other domestic companies in the same sector
  • It contributes to the health of the economy

 

Some arguments against FDI:

  • Allowing foreign players could destroy the livelihoods of millions of small store owners
  • Market prices could be manipulated by foreign retail giants
  • Local jobs could be at threat since the foreign players could purchase many products from abroad
  • There is no established correlation between advent of FDI and improvement of a country’s infrastructure

 

TYPES OF OWNERSHIP AND THEIR AGENDAS

By its very nature, a newspaper has to mould and lead public opinion. It thus plays a crucial role in a society. It also has to protect and safeguard the rights and freedom of the people. For a newspaper to be credible, it has to lay a great emphasis on facts and present them objectively. It must follow the highest traditions and ethics of journalism. Simultaneously, it also has to practice sound and credible business practices to make it viable. For this, the first requirement is to determine the basic principles, purpose, goals and aims of the newspaper desires to set for itself. It means the newspaper management first decide its philosophy.. Once this is done, it becomes easy for the management to adopt a clear and unambiguous course of action in pursuing its goals. This philosophy also decides the policies and programmes the newspaper must follow. In other words, the philosophy behind a newspaper determines its content, its thrust and its approach to its readers. Put simply, this in short means the newspaper management can decide its agenda.

Thus, every newspaper has its own philosophy, its own objectives and styles of presentation that appeals to specific sections of the readership and which helps build its own brand/circle of loyal readers. Hence, the more a newspaper expands its base of readership, the more successful it would be in its domain.

The tendency of every newspaper or a magazine is therefore to widen the base of its readership to attract more advertising. Advertising, as we all know is their main source of earning/revenue. If this effort matches the best traditions of ethical journalism, it is in the interest of the society. It is only when good principles of journalism are abandoned in the search for more business that a paper tends to lose its credibility and identity as a good newspaper.

At one time, all newspapers were local and most were run by individuals. But as population grew, and as newspaper operations became more complex,  newspapers were also run on other basis. Today, the most commonly found newspapers are run by individual, partnership, corporation, group, and trusts. In a few cases, they are also run by sections of the employees.

Following are the ownership patterns:

1)Trusts:

A trust is a legal agreement where its members (called trustees) manage the assets for the benefits of someone. Common examples are temples, whose property is managed by a trust. Trust is a relationship of reliance. A trusted party is presumed to  fulfill policies, ethical codes, law and the promises made. In newaspapers, trusts were formed because this type of ownership provided greater flexibility in business and the operations attained greater transparency than the usual business patterns. Some examples of trust-run newspapers are The Mathrubhoomi (Malayalam) and The Tribune of Chandigarh.

Now there are advantages and disadvantages of each pattern.

Advantages of a trust:

  1. a) Greater freedom in expression of views and editorial comment and coverage of news. Since the proprietors/managers have no vested interests outside the newspaper, they tend to be freer.
  2. b) Employees have a stake in the running of the newspaper
  3. c) Changes are less frequent in ownership patterns   

d)Disputes relating to wages, hours of work and other problem are better handled.

Disadvantages:

  1. a) Employee inefficiency tends to be higher
  2. b) There is no infusion of new blood
  3. c) Sale of property and handling of burdensome assets becomes difficult

2) PROPRIETARY CONCERNS/INDIVIDUAL OWNERSHIP:

This ownership is more common among weekly newspapers or smaller newspapers. The owner is usually the editor and manager (of almost all operations). He is all-in-one.

ADVANTAGES:

  1. a) The owner has absolute control
  2. b) He takes all decisions on editorial and business policies
  3. c) He receives all profits
  4. d) Is intimate with the newspaper

DISADVANTAGES:

  1. a) Not suitable for expanding business
  2. b) Unlimited liability
  3. c) Success depends on the ability and the credit status of the owner
  4. d) Such publications can be short-lived as the owner might run out of funds

 

3) PARTNERSHIP:

A partnership is formed when two or more persons make an ownership agreement, either orally or in writing for the purpose of establishing, purchasing and operating a newspaper. An example is the Mumbai-based DNA which is partnered by the Zee and Dainik Bhaskar groups.

ADVANTAGES:

  1. a) Persons of different capabilities and financial standings can pool their talents and money
  2. b) Responsibilities are divided, thereby lessening the load on each owner
  3. c) In business, it works on the principle that two minds are better than one

DISADVANTAGES:

  1. a) Each partner liable for debts
  2. b) Each partner equally obliged to fulfill responsibilities
  3. c) Each partner becomes liable in case there is a large debt incurred by any one
  4. d) An irresponsible partner can jeopardize the business and the welfare of other partner(s).

 

4) LIMITED COMPANY:

It can also be called as corporate ownership. Big newspapers go in for this pattern. There is a considerable less financial risk involved in the venture. Such ownerships are registered with the Registrar of Companies under the Indian Companies Act. In a private limited company the minimum number of members can be two and maximum fifty (50). In a public limited company, there should be at least 7 members. Once this is done, a Memorandum of Association and Articles of Association have to be prepared. These set out the aims and objectives of the company and the scope of its operations. The owners have to compulsorily submit audited accounts to the Registrar of Companies annually.

ADVANTAGES:

  1. a) Personal liability is limited to the extent of share-holding of the owners
  2. b) Business is not affected by changes in share-holding
  3. c) Transfer of shares is easy
  4. d) Operations can be expanded easily by increasing capital

e)Owners of 51% shares can control policies

DISADVANTAGES:

  1. a) Taxation and submission of accounts is cumbersome
  2. b) Editors or publishers are not compelled to promote social causes or even the interests of local readers.
  3. c) Every employee is compelled to carry out the wishes of the employer under all circumstances.

5) GROUP/CHAIN OWNERSHIP:

Chains of newspaper can consolidate financial interests, editorial direction and administrative command. The Indian Express is the most well known group/chain of newspapers.

ADVANTAGES:

Advertising space can be sold nationally and accounting methods can be standardized.

  1. b) Better, systematic and more coordinated working

DISADVANTAGES:

  1. a) Managers/ publishers may not feel compelled to promote  the product
  2. b) Subscribers and potential prospects seeking an opening in the newspapers may feel that the organization is remote-controlled. Editorial subordinates may feel they are not close to the editor.

6) EMPLOYEE OWNERSHIP:

Under this pattern, publishers allow employees to buy shares of the newspaper. In some newspapers, major shares are held by the employees, thereby allowing them to dictate the policies of the paper.

ADVANTAGES:

  1. a) Favourable to employees hence high employee morale

b)Fewer changes in administrative and editorial control

c)Employee-related disputes are handled better

DISADVANTAGES:

a)Employee may gent benefits even when he may not be competent or productive

b)Sentiment prevails over good judgement in policies

  1. c) Less chances of new blood entering the organization

FINANCIAL MANAGEMENT

Newspapers today are big business. Unless a newspaper’s finances are sound, it cannot expect to be in business for long. Thus management of finances in newspapers assumes great importance.

To run a newspaper efficiently, huge amounts are needed. Plus this, it also needs to have additional, reserve funds to take care of unforeseen expenses and meeting further targets. There has to be a balance between the outflow and inflow of finances. The outgoings comprise of salaries, costs of raw materials, capital expenditure and taking care of loans and overdrafts. With so many factors to take care of, continuous planning and coordination of all sources of income and expenditures has to be done. The responsibility to ensure that its finances are on a sound base, newspapers have a Business Manager or a Financial Director. He always seek the help of ad, circulation and editorial departments to discharge his duties effectively.

Inability to manage finances often leads to a newspaper losing its independence which is its most important asset/characteristic. A financially sound paper can always reports facts fearlessly and independently without compromising on the ethics.

The first responsibility of any newspaper is to earn profits to print the truth as it is. The richer it is, the more fiercely independent it is. With technological advances, most newspapers go in for expansion. This includes increasing the number of editions to attract a wider circulation and business. Most big newspapers like the Times of India, Indian Express, The Hindu, Eenadu have multiple editions.

HUSBANDING FINANCES:

Planning and forecasting are the first steps to effective financial management. Funds allocation on small term and long term investments and targets have to be chalked out. Planning involves the financial objectives of the paper, policies and management of its existing capital.

However, this is possible only in big-size papers which make profits. Newspapers which lead a hand-to-mouth existence often find themselves in a financially precarious situation. When the planning part is taken care of, it becomes easy for the paper to decide on its selling price and advertisement tariffs. It also enables itto formulate its marketing strategies. It is the finance department that determines whether news editions are viable or, news mergers are possible.

The finance department thus has to draw up estimates for the future – normally for the current year. It has to draw the budget, prepare balance sheets, evaluate assets, liabilities and its net worth so that finances are under control.

The finance department also has to coordinate with agencies like the Audit Bureau of Circulation (ABC), The Indian Newspaper Society (INS), The Editors’ Guild and the Registrar of Newspapers (RNA). These are compulsory. Plus, the department also has to provide its income tax details and provide for an audit of its accounts.

MANAGING FINANCES:  

Management of finances involves:

  1. a) Providing financial resources as and when required.
  2. b) Optimising profits and promoting growth.
  3. c) Planning and controlling in coordination with heads of other departments to expand, d diversify and restructure.

d)Increase productivity while cutting down costs and eliminating wastage.

e)Frequent review of resources.

NEWSPAPER REVENUE:

There are two major sources of revenue for a newspaper. From the sales and advertisements. Advertisements are classified into following categories.

  1. a) Classified

b)Display

  1. c) Colour
  2. d) Specified positions solus, front page, right hand side, ear panels, in the middle of a news story or sometimes even merging with the story.    

The advertisement rates are decided per centimeter per column. Rates are charges as per the category of the ad. Special positions and colour attract higher tariff. Newspapers are supposed to adhere to a 40:60 ratio in ad-news. However, most newspapers flout it to garner more profits. In recent times, it seems to have become a trend to present promotional (PR) matter as editorial reports/stories. The newspaper charge separate rates for such ad-news called advertorials.

 

MANAGING RESOURCES

ADVERTISING REVENUE:

The three major sources of revenue for a newspaper are advertising, sponsorship and circulation. Most common are the classified ads, display ads of specified sizes and meant for specific positions. In half and full page, they are also spread across the centerfold pages.

The number of ads is a clear indicator of that newspaper’s popularity or market value. Of all the media, print media is the most durable, but less effective. Ads on the electronic medium have more impact given their visual appeal.

An advertiser always pays for a newspaper that has wider reach in terms of circulation, region in which it operates and the language. At times he opts for two papers depending on the saleability of the two papers in a metropolis.

Statistics shows the share of ads in print media is steadily declining at the cost of TV. Even cinema is losing out to TV. This has driven newspapers to devise better means to mop up ad revenue. In this quest, they sometimes resort to unethical means. Among them is what is called as paid news. All sorts of publicity stuff is passed off as “news stories” in the process. A relatively new phenomenon called Celebrity Journalism has also been institutionalized with clients, event managers and ad agencies shelling out money for some publicity which otherwise would not have qualified as true news. Newspapers justify it claiming that without ad revenue it is almost impossible to sustain. But then, it also triggers an unhealthy competition between themselves.

CLASSIFIED ADS:

Classified ads are small ads where one advertises his merchandise/wares in compressed 25 words (often without illustrations). It is also regarded as indicator of the newspaper’s popularity or pull. The more number of classifieds, the more its acceptability.

DISPLAY ADS:

Display ads are those where the content of the ad goes much beyond a few words. It takes course to better design, colour, catchy slogans and gloss. They are often used to sell something directly to the buyer or consumer through retail stores or open markets. NGOs, government agencies resort to them to propagate some achievement or a programme for social welfare. The govt uses it for people’s health, education, environment, safety, family planning and social harmony.

Most small newspapers, which cannot get ads from big corporate houses or industries for want of funds, sustain on govt ads. However, the govt does not pay the same rates of ads as the corporate ads. Sometimes, the govt stops giving ads to newspapers to punish them for being critical of its policies.

The rates for govt ads are decided by Directorate of Advertising and Visual Publicity (DAVP). It fixes the rates on the basis of the certificate of circulation produced by the newspapers.

COMMERCIAL ADS:

Here the advertiser demands the position in which the ad has to appear. The newspapers charge extra for special positions like front page, right hand side, above the fold, below the fold etc. The only space where ads are not allowed is the editorial page which is supposed to maintain its editorial sanctity. Papers also charge fancy rates for ads that merge into news columns and thus appearing to be part of news.

PAID NEWS ADS:

These are passed off as news and the only way one can recognize them is by the word “advt” which is mentioned in the right hand corner below the ad.   

CODE OF CONDUCT FOR ADS:

There is a code of conduct for ads and advertisers as well. Any complaint or dispute on a ad is referred to the The Advertising Standards Council of India. According to the code, ads have to be truthful and ethical. There should be no exaggerated claims. Using pictures and representations any person who is identifiable is not allowed without (his) permission. They have to be in good taste and not offensive to any sections. Vulgarity is a no no. Ads should not incite people into committing crimes or violate law and order. Reference to caste, creed, religion should be avoided. Banned products cannot be advertised.

The IENS has its own conduct. It does not approve ads relating to abortion, birth control (except contraceptives or measures adopted by the govt) and any magic miracle cures. Similarly, ads under Box Nos asking for submission of testimonials, certificates or photos are banned. Ads relating to job vacancies cannot refer to caste, sect or community.

In case of commercial ads, newspapers prefer to accept them from advertisers rather than directly from the clients because of the service charges issue. Some papers allow free space for social causes while some offer heavy discount.

Disruptive Media

Disruptive Media is a technology is one ‘that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network’. An example is the mobile phone – which, with their built in cameras, disrupted both the compact analogue and digital camera.

Disruptive technologies ‘enable new markets to emerge’. Organizations ‘entering these markets early, have strong first-mover advantages over later entrants’. The problem is, as these organizations ‘succeed and grow larger, it becomes progressively difficult for them to enter the even newer small markets destined to become the large ones in the future.

Earlier, the media business used to be fairly simple. It dealt with content, distribution and audience, with a small number of publishers, producers and programming executives making editorial decisions for the rest of us.

The Internet blew that model apart. Today it is obvious that anyone, anywhere can get their voice heard. Platforms like YouTube, WordPress and Pandora offer a cacophony of voices from major media companies to journeyman professionals and hopeful amateurs.

While this is a good thing, it also comes with a built-in problem. Increase the supply of anything and prices fall, which makes it much harder for creators to finance their work. Now, a number of new business models are rising up to fill the void and it’s changing what we read, watch and listen to.

In the 1980’s, the rise of cable TV began to change the media scene with niche networks, like CNN and Cartoon Network, to appeal to narrow audiences that were underserved by the big broadcast networks. Another important development was the rise of Pay TV networks such as HBO and Showtime, which offered movies and live sporting events such as boxing matches. They began investing in original content that was free from the restrictions broadcast networks had to follow.

The Internet accelerated these trends. Today, rather than local monopolies and regulated broadcast spectrums, there are nearly universal platforms. WordPress, a free-open source platform popular with bloggers, runs more than 20% of the sites on the Web, including major media outlets like Forbes and CNN. On YouTube, major marketers and production studios can be found.

Platforms like Netflix have shown that you can reach large audiences.

The explosion of new platforms has been great for audiences, but its effects have been more uneven for creators.

So, as the media business continues to evolve, we can expect new business models to emerge and that, in turn, will continue to shape how creators inform and entertain us.

Changes in the way we consume news have affected all aspects of media. Innovation in business models, products and pricing strategies can alter the playing field dramatically. Media companies are adapting and inventing solutions on the fly with some success, but many are still searching for that elusive new business model that will allow media companies to be profitable while preserving quality journalism that set them apart from the competition.

An advertisement could alert you about new products that come into the market. It contains information about what the product is, what it does and why you should buy it. It brings to your attention where the product can be bought, how much it costs or who may use it; in terms of age and the lethal effects if used improperly.

Both print and broadcast media cover huge audiences at the same time. The subsequent effect on advertising is that it raises the rate at which the products or services being publicized sell. A well-executed advertisement prompts you to try out the goods by purchasing them. This, in turn, increases sales. Increase in sales translates into profits for the manufacturer.

Advertising popularizes brands. The media popularizes the brand by constant replay and in print media, through repetitive publication. Thus the target customers remember the brand and buy the product. For instance, the recognition of labels like Coca-Cola’s is attributed to successful advertising.

Whether the form of media is print or broadcast, the target audience is large. Where the advertisement persuades and convinces the public about the goods offered or services rendered, more people will be inclined to purchase or go for the said services. The products already in the market get exhausted and the services crowded. There arises a subsequent demand for more products and services.

FROM WEB 1.0 TO 2.0

Web 1.0 is the “readable” phrase of the World Wide Web with flat data. In Web 1.0, there is only limited interaction between sites and web users. Web 1.0 is simply an information portal where users passively receive information without being given the opportunity to post reviews, comments, and feedback.

Web 2.0 is the “writable” phrase of the World Wide Web with interactive data. Unlike Web 1.0, Web 2.0 facilitates interaction between web users and sites, so it allows users to interact more freely with each other. Web 2.0 encourages participation, collaboration, and information sharing. Examples of Web 2.0 applications are Youtube, Wiki, Flickr, Facebook, Yahoo, Craigslist, Google, Twitter, Whatsapp, Pinterest and so on.



HUMAN RESOURCE DEVELOPMENT

It was around the mid-seventies that the newspaper industry in India transformed into big-time business. This was the period when newspapers adopted better technologies and focused on recruiting employees who were skilled for the job.

It was also around this time that the reading public sought more information. This was partly because the people in the country were blacked out from reading authentic news/information because of a dark chapter called Emergency. A censorship was imposed and news was either shut off or manipulated to mislead readers.

The advent of computers speeded up communication technology. Use of satellites facilitated simultaneous printing of editions.

A news organization is a dynamic set up. Therefore all newspapers have to fill and refill their cadres of journalists. These include, reporters, editors, jockeys, anchors, news readers etc. Big newspapers have a special HRD department that spots talent, recruits them, and trains them in modern communication practices. It helps the new recruit to familiarize with the work culture of that paper and coordinate to that extent.

Prominent newspapers have their own training schemes for their journalist and non-journalist employees. The television media lays a great emphasis on in-house training since, it has to have people directly dealing with its viewers as anchors and readers.

Some newspapers go in for campus recruitments. Those colleges that offer BMM curricula. The logic is such qualified recruits need less training. Earlier, newspapers had to give elaborate training (and also had to depend on the flair) to a raw recruit.

The three key areas are editorial, advertising and circulation. In these departments, the newspaper needs to have people who are trained for the job. The employees of these three departments are also taught to work in coordination.

The editorial recruits have to be taught the concept of news, and ethics of good journalism. The ad recruits are taught to garner as many ads they can without resorting to unethical means (ex desisting from liquor/cigarette ads etc) while the circulation recruits are ingrained into understanding how new circulation can be won. However, all recruits are also made to go about their job, keeping in mind the financial health and other needs of the newspaper.

BRAND SPONSORSHIP:

Big newspapers who have reserve funds, manage to hold public shows, not only to create their brand, but also rake in some profits. Prominent examples are Filmfare Awards and Femina Miss India contests. These functions are well patronized (Manikchand, the gutkha makers would sponsor the Filmfare Awards) and have now become brands by themselves. They also strengthen commercial bonds

 

 

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CROSS-OWNERSHIP, CONVERGENCE

Cross ownership also refers to a type of media ownership in which one type of communications (say a newspaper) owns or is the sister company of another type of medium (such as a radio or TV station).

 

If any one branch of media holds stake in other media ex. broadcast or television, it will be in a position to control the opinions of larger section of people which will ultimately injure the very root of pluralism (Pluralism here means the freedom to hold diverse opinions by diverse people) in democracy. Suppose, there is, on the one hand, a newspaper is publishing as many as seventeen editions from different cities of the country and on the other; one print media company has full or major control over a broadcast company or a television company. In both the cases, the free flow of information meant for the public in a democratic society will be definitely obstructed, if not totally killed. This is called cross media ownership.It’s where one person or group owns more than one form of media – radio, TV, newspapers, especially in the same area.

 

This is terrible for democracy – there is no incentive for the reporters to investigate and get the story, since the ownership alone decides what is news and what isn’t and there is no competition for viewers/readers.

 

Democracy can only survive if the people are informed – hence the emphasis placed on our freedom of the press.

 

CONVERGENCE:

Convergence normally would mean the occurrence of two or more things coming together. Convergence in this instance is defined as the interlinking of computing and other information technologies, media content and communication networks that have arisen as the result of the evolution and popularisation of the Internet as well as the activities, products and services that have emerged in the digital media space.

 

DIGITAL REVOLUTION AND ITS IMPACT:

Digital Convergence is the bringing together of many communications, information, media and transactions from any of my service providers, on any of my devices. it will offer a consistent service experience, in a cost effective way in order to manage and engage in my personal, social and business life – anywhere. It refers to the sweeping changes brought about by computing and communication technology.

 

Positive aspects include greater interconnectedness, easier communication, and the exposure of information that in the past could have more easily been suppressed. The economic impact of the digital revolution has been large. Without the World Wide Wb (WWW), for example, globalisation and outsourcing would not be nearly as viable as they are today. Negative effects include information overload, Internet abuses, forms of social isolation, and media saturation.

 

While there have been huge benefits to society from the digital revolution, especially in terms of the accessibility of information, there are a number of concerns. Expanded powers of communication and information sharing, increased capabilities for existing technologies, and the advent of new technology brought with it many potential opportunities for exploitation. The digital revolution helped usher in a new age of mass surveillance, generating a range of new civil and human rights issues. Reliability of data became an issue as information could easily be replicated, but not easily verified.

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GLOBALISATION, LIBERALISATION & FDI

The last two decades have shown how technology development has brought about a big change in the media. Newspapers and electronic channels have become commercial and corporate giants who are out to make their impact across a wide territory. They have acquired a status and authority that they did not have around two decades back.

 

Finance is the nerve-centre of the media. It therefore has to strive to increase its reader base and also increase its income through various means without compromising on its integrity.

 

The readers and viewers of today have a wide choice. The print media is facing a stiff challenge from the electronic media. In order to sustain the competition, most newspapers have resorted to crass commercialization (like “paid news” and unethical ads on liquor and cigarettes) with the result that decent readers are none too happy about it.

 

The managers of the print media argue that they have little choice but to resort to such methods for surviving the market competition. They cite newsprint crisis, economic recession and challenges posed by the Internet, cable and satellite broadcasting as the main reasons.

 

Newspapers in India are priced low. Hence they depend on ad revenue to keep going. They have to circulate well to get ad revenue which not only makes up for the deficit, but also to earn profits. In recent times, growing technology has also increased maintenance costs. Technology upgrade and modernization costs a lot .With globalization and liberalization, the volume of advertising has also gone up. Usually, the bigger newspapers get the bulk of ad business while the smaller newspapers have to lead a hand-to-mouth existence. Smaller papers depend on local and government ads.

 

Just how stiff the competition between the print and electronic media is can be understood by the fact that while the former reached 65% of the population, TV reached 82%. The TV ate up a lot of newspaper ad revenue.

 

It was this situation that drove many newspapers to seek foreign investment. In June 2002, the Government of India allowed Foreign Direct Investment (FDI) to the extent of 26%. But the government made it clear that such investment would be scrutinized before being okayed. However, many prominent editors argued that such investment would make Indian newspapers vulnerable to foreign intervention. With a foreign agency investing money in Indian papers, they would obviously in a position to dictate terms.

 

Those in favour of FDI felt that in the current global context, many foreign publishing houses would like to invest in India considering the business and readership involved.

 

They also felt that FDI will change the way people think about news and views. FDI could enable papers to adopt latest technologies and also bring in professionalism.

 

There are advantages and disadvantages with FDI. It could change the authority controlling the paper and therefore, the way news and views are presented. It could also put in danger national security. In fact, these risks prompted the government to limit FDI only to 26%.

 

FDI has been welcomed in many industries on terms and conditions laid down by Government of India.

 

The main objective of the FDI is the transfer of managerial skills and technical knowledge. The government has permitted FDI to the extent of 49% in the media if the management remains in Indian hands.

 

The government stipulated that the editorial and management should remain in Indian hands. Three-fourths of the editorial staff and board of directors should be scrutinized by the government before being allowed entry.

 

Over 35 major newspapers were opposed to the FDI. According to them, even a 26% stake would affect their ownership rights adversely. The Times of India group and the BBC Worldwide have agreed to develop Filmfare and Femina under the FDI guidelines.

 

MARKETING STRATEGIES

A good newspaper is always on the look-out for potential readers. It does not expect the reader to come to it. The first thing any newspaper should bear in mind is to ensure that it reaches out to all its customers without fail everyday.

 

It is this pursuit to reach out to its readers that newspaper managements/circulation managers devise effective marketing strategies. Strategies that help them to penetrate newer areas. It enables a newspaper to achieve a wider reach, and therefore a wider clientele.

 

Marketing strategies are two-prong. One that aims its readers and the other that aims its agents selling the paper. They are mostly about various incentive schemes that are designed to earn untapped readers and to win readers who are subscribing to rival papers. So most newspapers pull out all possible tricks to lure readers for better circulation. Because better circulation means better advertisement revenue.

 

Though newspapers these days are seen as profit-making corporate giants, they are primarily meant for public utility. A newspaper therefore tries to strike a balance where it serves public cause as also aims to keep itself in good financial health.

 

It is interesting to know that newspapers undertake a lot of welfare activity. It is also described as “social commitment of the paper.” They launch relief funds during natural calamities like floods, quake, famine etc. The Times of India launched funds for the victims earthquake victims in Rajkot. The Malayalam Manorama built tenements for the homeless victims of Latur earthquake. This despite the paper having no reach or circulation in that area. It was a goodwill gesture on the part of MM.

 

The Mumbai-based Janmabhoomi collected Rs 8 crore for the riot victims of Gujarat in 2001. These kinds of activities shows newspapers are responsive to the people’s needs, and they also are an affective marketing strategy.

 

The Rajasthan Patrika, in order to cultivate its hawkers, organizes a Hawkers Day. It pays handsome commissions to them as incentives. This helps the Patrika management to share a bond with the hawkers who are crucial in ensuring that the paper is circulated to all readers. Some papers are known to distribute cycles, fans and other consumer items to the hawkers/agents.

 

Telugu paper Eenadu started district-based tabloids and inserted them into the main edition to penetrate remote areas in districts. The move paid of so well that Eenadu has a great hold in towns and smaller places. It is now No 3 in the country.

 

Marketing strategies are not limited to circulation alone. A newspaper does not sell on mere marketing gimmicks. A newspaper has to be a good, quality and credible product. It also helps a hawker to sell it easily because selling a good product is simpler than selling an ordinary one. Prestige and reputation are a newspaper’s basic qualities.

 

When it comes to advertising targets, most newspapers focus on classifieds since they are indicators of a paper’s popularity. Many newspapers, especially the vernaculars, focus on communities. The MM invites its readers to participate in Onam, the 10-day festival in Kerala.

 

Newspapers are also known to focus on certain sections of the society. Many bring out special and weekly supplements for women, children. Some cater by devoting dedicated pages to science & technology, farming, education, health etc.

 

Leading newspapers also carry columns from outside writers so that the reader gets the feeling of having participated. The Asian Age and The Hindu devote Sunday space to Art and Culture. Regional papers carry the flavour of festivities like Diwali, Dussehra and Holi. This is based on the assumption that English papers seldom cover them. Besides, the regional papers also earn ads while covering these.

 

Big newspapers have a Public Relations Managers who work as a cushion to solve the paper’s problem with authorities in government, civic bodies and other organizations. The PROs build goodwill and also iron out differences with organizations when things go wrong.

 

CIRCULATION:

Circulation is the bloodline of a paper. It is the foundation of newspaper’s success. In terms of revenue, circulation may not earn as much as advertising does, but it is on the basis of how much copies a newspaper sells that it gets ad revenue. To that extent, ad revenue is directly proportional to the circulation of a paper. This is why newspapers are constantly striving for ways and means to boost their circulation. Among them are prize schemes for new subscribers, cutting down on the selling price, tie-ups with other newspapers of repute and other such methods.

 

The editorial department can provide a push by playing up/covering appropriate stories that attract the attention of the readers

 

However, in this effort to mop up as much circulation as they can, many newspapers also resort to unethical methods/strategies. The recent trend is celebrity journalism where reports, articles, and interviews are “imposed” on unsuspecting readers in the name of news. Often such writings are promotional and PR-based. The Times of India is known to have brought in this Page 3 Circuit where the content is all about celebrity partying, gossip and commercial networking.

        



Audit Bureau of Circulations

 

Audit Bureau of Circulations (ABC) is one of the several organisations of the same name operating in different parts of the world.

 

The ABC founded in 1948 is a not for profit, voluntary organisation consisting of Publishers, Advertisers and Advertising Agencies. It has done pioneering work in developing audit procedures to verify the circulation data published by those newspapers and periodicals which have earned the right to display its emblem.

 

ABC as it is called and understood by all, is a founder member of the International Federation of Audit Bureaux of Circulations. The main function of ABC is to evolve, lay down a standard and uniform procedure by which a member publisher shall compute its net paid sales. The circulation figure so arrived at is checked and certified by a firm of Chartered Accountants which are approved by the Bureau. The Bureau issues ABC certificates every six months to those publishers whose circulation figures confirm to the rules and regulations as set out by the Bureau.

 

From a modest beginning it has grown to remarkable proportions. ABC’s membership today includes 411 Publishers of national and regional importance, 151 Advertising Agencies, 51 Advertisers & 20 New Agencies and Associations connected with print media and advertising. It covers most of the major towns in India.

 

Facts and figures which are checked and certified by an independent body is a very important tool in the hands of the advertising business community. The details of ABC certified circulation figures are available online to all Members of the Bureau (http://www.auditbureau.org) at no extra cost.

 

An Advertiser would like to know the facts and figures before investing his money in advertising. An Advertiser ought to know how many people buy a publication and in which area. The ABC gives all these vital facts every six months. The ABC figures are not the outcome of opinions, claims or guesswork, but they are the result of rigid, indepth and impartial audits of paid circulations of member publications by independent and leading firms of Chartered Accountants working in accordance with the rules / procedures prescribed by the Bureau.

 

Convergence in media

Introduction:

Convergence in the general sense of the term means the coming together of more than 2 things.

Convergence in Media means the symbiosis of different technologies working as one to create an informed society. Convergence is basically the unification and development of diverse mediums of communication. Convergence is born out of the never-ending desire to make work simple and easy without being financially inconvenient. It can be viewed as ‘coming together of different equipments and tools for producing and distributing news’ or ‘flow of content across multiple media platforms.’

Convergence mostly deals with the digital technology today. But it’s because of convergence that we are seeing the most exciting times in human history with the recent developments in the field of internet. An electronic big bang is consuming the world as voice, video and data converge, giving rise to newer digital, multimedia and interactive communication technologies. It’s not just the technological advancements that are changing the face of the earth but also the social and cultural changes they bring with them. They are changing the way we live, the way we work, relax, manage our money, trade and communicate with each other. The new technologies are changing the way we perceive people, cultures, countries and companies and our expectations of them and also our expectations of ourselves. It’s not just convergence in media, its convergence of the society.

Convergence can take place only when computing, communication and content are in order. These are the most important factors that make any type of convergence possible.

For Convergence in Media, these three are absolutely required in this day and age. Media includes Newspapers, T.V, Radio, Cell phones and most importantly Internet.

History of Communication and tools of Media

A study found that human speech evolved from bird songs; humans have not looked back since. Necessity is the mother of all invention and to necessitate communication we have always been eager to find new and faster ways of communicating.

Stone drawings to papyrus scrolls, we kept evolving and so did our communication patterns. Pigeons are still used as mail carriers in some parts of the world. The printing press of Gutenberg was the pioneer of communication in the Renaissance. It freely expressed thoughts and ideologies through pamphlets and posters and ushered the new world into the far reaching effects of communication

Telegraphs were the first remote communications method that exhibited a real-time nature. They greatly facilitated communication between countries and especially during the world wars. Reuters news agency used telegraphs and pigeon carriers along with canisters to send financial news all around Europe.

Telephone was considered the greatest invention at the time as the speakers at both ends of the phone could send and receive messages quickly along with the understanding of tones, emotions and the urgency of the situation.

Radio brought the world even closer. It minimized the use of wire signals thereby facilitating communication to a much wider audience that too at real- time. The need for instant news and information grew during this time. The world wars created a bigger need for quick information and thus, technological improvements were made constantly.

Television changed the whole meaning of communication. It was not just about sending and receiving information now, it was also about entertainment and infotainment. Nothing has been more successful in grabbing attention and maintaining it than T.V compared to other mediums of communication.

Cinema converged video, voice and data long before television was invented. The use of moving pictures, sound, music, art direction and information on one single screen was the best convergence of all. But real importance of convergence was not realised until much later.

Telephones were a great tool for a conversation but it was meant to be more.  Reducing the use of wire cables was necessary therefore telephones became wireless or cordless. Their size kept reducing and the 90’s saw the first mobile phones.

Mobile phones converged talking and instant messages thus reducing the need for letters, telegraphs and telephones. Nobody had any idea what a big deal it was going to become in the near future.

Then the world ushered the mother of all inventions which took everyone by storm and gave a great definition to convergence- “Computer”.

Computers were meant for calculation and data storage at first but it found a whole new meaning with the “Internet”. Pentagon released it for public consumption and today it has brought the world at finger tips.

The World Wide Web gave the society an infinite realm of possibility. True convergence began with the growing use of computers and internet.

Internet was one medium to connect Faxes, Mobile phones, Telephones, Radio, T.V, Cinema, Newspapers and letters together and it certainly did. Internet is the greatest tool for convergence in media.

Convergence in Media today

Technological convergence worked at a faster pace than Media Convergence. Computers became laptops and laptops became palmtops. Cordless phones soon transformed into mobile phones and antenna mobiles gave way to advanced android and iOS phones. But it’s because of tech convergence that media convergence is possible. It is the merger of mass communication outlets like Print, Radio, T.V and Internet with portable and interactive technologies through various digital media platforms.

Sharing media has become much easier. Podcasts and RSS feeds made information easy to access on the net. Napster made music sharing easy and the arrival of iPod changed the business of music altogether. iTunes started selling like hot cakes and many musicians made money through iTunes.

The Print industry today can’t survive without computers. Layouts, design and content are produced on computers. Most of the newspaper companies have their online presence and also provide mobile applications for android phones and iOS phones. News is instantly published online as soon as an event takes place which is path breaking for information providers. Everybody can know everything online. Newspapers accept articles written by citizens online and publish them if found worthy. This makes us all feel connected and involved. Times of India, Hindustan Times, Washington post and Guardian have their own websites and also provide mobile apps.

Radio stations use computers for programming shows and keeping updates so as to stay connected the pulse of the crowd. Some radio channels use satellite to broadcast their music online for worldwide listeners. Radio stations have internet presence as well. All India Radio also has its own website which provides news in all languages it caters to.

Convergence in Media has received a kick and a push forward because of Social networking sites. Google and Facebook being one of the main reasons for this progress. Google search engine has got the globe online. There is practically nothing that Google can’t find. Google from being an internet search engine has become a verb used in everyday conversations. Google is responsible and gets credit if the convergence in media is reaching heights today. Google has bought major companies like YouTube and created Gmail and Google hangout. As for Facebook, All news agencies and media outlets have a page on it. T.V sitcoms, news channels, radio stations and even newspapers have a page where a person can find updates every second.  Twitter has made conversations short and crisp. Other micro blogging sites have given a new sense to media and sharing information.

Cloud computing is the future of humanity. In cloud computing virtual servers are available on the internet. Its a way to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel, or licensing new software. It is high performance computing where a person can multi-task with more than hundred of computations.

Legal and financial issues are discussed in online forums. Business deals are also made online. E-mails are easily accessible through phones. Political and official data has also been made available online. Even police and law enforcements portals are available online. For example Mumbai police has its own website discussing recent crimes and contact numbers of nearby police stations along with senior police inspectors. Press releases are regularly updated as well.

Another major convergence in Media has happened due to YouTube. Earlier people could only share their views, opinions and pictures but now they can share their videos as well. News channels have their own YouTube channels as well. News is available 24/7 online. Uncensored versions are also available for a more transparent view of the world. Video blogs or ‘vlogs’ has made many people stars overnight. People can share freely without any restrictions and advertise as well. People can make home movies and professional quality movies and put them online for mass consumption without having to spend money on theatre releases. People can watch and make movies and news, read and publish articles, listen to radio and upload their songs online. They can even watch T.V serials online. Everything is available on the internet. People apart from communication can sell and buy things online as well.

Skype has allowed video conferencing which further bridges the gap in the world communication. Earlier international calls could be made online without having to pay the absurd amounts of international caller fares. A lot of online messengers started the service of online calling and video calling but none as good as Skype. The world was already a small place due to the internet but now with Skype the whole could see each other. Business meeting or news deliberation or plain simple talk everything is just a button away.

The new age DTH services have made T.V even more addictive. T.V can now also have internet connection. Digital cameras can now access Facebook and emails as well. Faster LAN networks and high speed internet connections have made media faster and more user friendly.

Coding is becoming popular. Bill gates to Will.I.Am are endorsing computer coding for everyone. According them its more about humanity than science and anyone can learn it. Coding is going to be the next big thing in convergence of media.

Media on Fingertips

With everything available online and phone companies upping their standards, the day has come where internet is available on the phone and how. The phones 5 years ago had a very juvenile idea of internet but since apple and Samsung battling it out its only good news for the consumer. Mobile applications are the newest and biggest trend today. Every single media portal is available on applications. Mostly free, mobile applications have made world an easier, comfortable and simpler place to live. From booking tickets online to internet banking, from reading daily news articles to watching news channels, from video conferencing to online chatting, everything and anything has a mobile application. A person can watch movies, listen to radio, read newspapers, and even watch T.V on the cell phone. It is safe to say that the whole world is on the fingertips of mankind. A mobile phone is the most indispensable object a man can have today. Its use and importance is only going to increase. The whole world is on the internet and the internet is now on mobile phones. The day is not far where a mobile will obliterate computers.

Drop box is an online application which is gaining popularity overseas. You can scan upload all your personal information like Pan cards, ration cards, electricity bills, identification proof, driving licence, passport and the like in a drop box and you wont have to carry your important documents anywhere. The system of carrying railway and air tickets is fast getting obsolete as people carry pdf files on their phones. Soon other things will follow as well thus reducing the need to waste paper.

Advantages and Disadvantage of Convergence in Media

Convergence in media will create a lot of jobs especially in India where it has not caught up to that extent. It will create a more informed society which is well connected. Many news agency hold power in all media outlets like Print, T.V, Cinema and internet. It is easier for them to manipulate news if all of these portals are in their hands. Accumulation of power in few hands is harmful for the transparency of the media industry. A conglomerate has many industries and the convergence in media will only make them strong and it will be easier for them to issue any propaganda.

Future of Convergence

There is great scope for even more advancement in the field of technology as well as media convergence. In 10 years from now nobody will require a Computer. Everything will be available at a single place and nobody would even require a finger to click any buttons. It will be controlled by Google glasses, mind maps, GPS, voice commands or just thoughts would be enough for matter to appear before eyes. If any news seems important for a person it will be automatically displayed before his/her eyes. Holograms of human figures would be a common thing. Nobody will have to travel to far off places for deliberations, meetings or election campaigns. A hologram representation of the person would be available at all times. News readers wouldn’t have to go on sets to report news. Reporters or news writers could think of their articles at the place of incident and type it through voice commands and upload it right then and there without having to use even mobile phones.

People would be able to make music and sing on mobile phones and wont have to use high end studios to compose and publish their songs. Same goes for movies. With the recent applications of robots firing guns and a desert location available on phones, cinema will be redefined with mobile phone movies. Good bye green screens, hello mobile phones. Phones or notepads would be equipped with editing and voice recording softwares.

Newspapers would be published with moving pictures. The scenes from Harry potter movies would come alive in reality. Pictures would get clicked with the blink of an eye with the help of advanced Google glasses. A persons dying moment would get captured or even filmed and would help in finding criminals, watching war from a very intimate angle.  Only fear with these developments is that people wont remain people anymore, everything will become impersonal. Conversations will become shorter and life more mundane. People wont have the need to meet anyone in person. They would just send their hologram representation. But the good thing would be they could be at two places at one time which most of us want to do.

In 10 years, Media will definitely find a new threshold and many more media portals to exploit. Maybe Facebook might suffer how Orkut suffered. There might a bigger and better social network. It will all be but one global village and everyone will be known as a global citizen.

 

Media Conglomerate

A conglomerate is a combination of two or more corporations engaged in entirely different businesses together into one corporate structure, usually involving a parent company and several (or many) subsidiaries. Often, a conglomerate is a multi-industry company. Conglomerates are often large[1] and often multinational.

DB Corp, located in Ahmedabad in the state of Gujarat, India, is one of the largest newspaper groups in India, with a daily circulation of over four million copies across its various publications, including its flagship newspapers Dainik Bhaskar and Divya Bhaskar. Dainik Bhaskar is the second most widely read and circulated Hindi-language newspaper in India with a daily circulation of about three million copies across seven Indian states. Divya Bhaskar is one of the largest Gujarati-language newspapers in India, with a daily circulation of about one million copies.

 

Since expanding out of its home state of Madhya Pradesh, India, where Dainik Bhaskar has been a dominant leader for many years, DB Corp has attained leadership positions in most major print media markets that it has entered, beginning with the state of Rajasthan in 1996, and most recently the state of Punjab in 2006. The founders of DB Corp, the Agarwal family, have been able to build the only print media conglomerate in India with leadership in multiple Indian states, in an industry which is highly fragmented and dominated by regional news publications. The company is also diversifying into other forms of media such as magazines and radio, and is well positioned to become a leading media conglomerate in India.

 

Sun Network, India’s largest media conglomerate has powerpacked Twenty TV Channels with the reach of more than 95 million households in India. Sun Network’s channels can be viewed in 27 countries including U.S.A, Canada, Europe, Singapore, Malaysia, Srilanka, South Africa, Australia and New Zealand. It also has Forty Five FM Radio Stations, Two Daily News Papers – Dinakaran the No.1 morning tamil daily news paper with sales of over 1.1 million copies a day, Tamil Murasu No.1 evening tamil daily, Four Magazines, Sun Direct one of the largest DTH (Direct To Home Satellite TV service) service provider in India having more than 4 million subscribers and Sun Pictures the film division of Sun Network which produces / releases atleast 8 movies every year.

 

Original content is the essential driver for the consistent high performance of our media – the Sun Network controls over 50,000 hours of original content a year and is constantly adding to this vast value of content. To find out more about our operations, choose from the list of regions and brands.

 

NEWSPAPER STRUCTURE

To understand how a newspaper functions internally, it is important to know its structure. Broadly speaking, a newspaper has several departments and all of them have to work in cohesion and coordination. It has to be a closely knit unit.

The following are the departments functional in a newspaper. They are:

 

1)Editorial (News) Department:  The editorial departments basically deals with news and opinion. Depending on the size of the organization, these departments also vary in size. Within the editorial department there are other divisions.

a)Newsroom: News is written and processed in the newsroom. These processes are carried out electronically or manually, depending on the status of the newspaper. News can be received by wire, telephones or through personal interviews. Usually, the newsroom works for almost round the clock. A team of reporters also gathers local/city news. The reporting team fans out to cover wide areas called beats. The processing is normally done by what is known as the copydesk. Starting with sub editors to the higher hierarchy like the news editor, the copydesk edits, revises and checks the newscopies. The top rung editors deal with opinions/editorials and are also involved in taking policy decisions or the news schedule for the day.

b)Photography division: Most big newspapers have a team of photographers who work closely with the editorial team. The assignments are given to the photographers team by the senior editorial functionaries. At times, the photographers shoot on their own.

c)Library: Every newspaper requires a reference library. It stores books, others newspapers and other reference material that can be used as and when called for. This department also archives old issues of the newspaper.

d)Business department: This department is mainly responsible for earning revenue for the mediahouse. A newspaper cannot survive on the money made through circulation alone. The one source which enables it to earn good revenue is through advertisements. The department receives, spends and invests money. Everything relating to the business of the newspaper is handled by it.

e)Advertisement department: This department deals with advertisements. It regulates and schedules ads. It decides usually which ad has to go where. The economic well being of a newspaper is estimated in terms of the advertisements it is able to get. Within this department there are other sections like classified ads, publicity and display ads etc.

f)Circulation division: Circulation is the lifeline of the newspaper. A full-fledged team ensures that the newspaper is sold across as widely as possible. A wider reach and circulation is an indicator of the newspaper’s popularity. It is the responsibility of the circulation personnel that the newspaper is transported to all nooks and corners, including far off places when the news is still fresh. They use trucks, buses, trains, flights and private vehicles for the purpose.

g)Printing/Publishing department: The printing and publishing department does all operations required to print the newspaper. From procuring  newsprint to other material like ink, the department makes sure that the paper comes out sparkling clean and well printed.

h)HR/Personnel department: This department keeps track of the personnel engaged with the newspaper. It also holds recruitment processes. All the hiring and firing is done through this department. It also manages all administrative matters relating to the employment.

A newspaper also has other smaller departments. For instance most big newspapers have stores department where material and stationary is stored. There is also a promotion or PR department which does the brand building for the paper. In some newspapers, this department is an integral part of the business department. With newspapers making newer technological advances, using computers, many newspapers also have a hardware engineering section and a data processing which is responsible for the upkeep of  the technological equipment and data storage respectively.

 



RESOURCES AND SUPPLY CHAIN

No newspaper can run efficiently unless it receives adequate and timely quota of newsprint. Untill 1970s, the supply and distribution of newsprint was rigidly controlled by the government and was in short supply. In the 50s, it was even worse since newsprint was supplied as fixed quota. During the 40s, newsprint was in such short supply that it would be sold in black.

 

The government has now partially decontrolled the supply, but the import and consumption of newsprint is still under its control.

 

A newspaper has to spend over 60% of its cost on newsprint. Thus, the price of newsprint also determines the selling price of the paper and its ad tariff. The production capacity of all paper mills in the country is about 6 tons while the requirement is around 7 tons. This shortfall is covered by importing newsprint from other countries.

 

Small and medium vernacular newspapers depend on the ads from state or central governments. Since the cost of modernization and maintenance are high in today’s scenario, most small and medium newspapers find it difficult to sustain. Apart from these, low literacy rate, lack of purchasing power, communal and political bias and religious inhibitions also act against the growth of newspapers.

 

There is always a keen competition (sometimes cut-throat) among newspapers to gain more circulation and (therefore) more business. Often, big newspapers are seen to indulge in a price war or claims about whose circulation is more. Recall the competition between Hindustan Times and the Times of India in Delhi where both claimed to have better circulation. It also led to a price war between the two giants.Usually, a cut in the selling price leads to confrontation with the hawkerssince their commission on the sales also gets correspondingly cut. So in order to keep the hawkers in good humour, the newspapers try to cover up their losses by other means.

 

Perhaps the worst aspect of such a war between newspapers is that it drives them to be commercial and market-oriented, thereby losing public focus. Thus, quality suffers at the cost of quantity. Very few papers steadfastly maintain their credibility while succumbing to commercialism.

 

TECHNOLOGY:

In the last 30 years, the growth of television has been remarkable. In fact, it poses a serious threat to the print media. While the radio has struggled to remain in people’s memory, the real war has been between the electronic media and the print media. With TV having a wider reach, the print media has been forced to pull up socks and go in for many technological innovations even as finding newer ways of increasing revenue.

 

For the print media it is a circus between cutting costs and increasing profits at the same time. Computers came onto the scene as an effective means in modern techniques. With the government allowing foreign direct investment (FDI) in the media, it has been possible to be technologically more innovative. However, a section of the press is opposed to the FDI on the ground that it will allow foreigners to take control, endangering their own control.

 

Today, there is an additional emphasis on hike in advertising budgets on the part of the print media since the competition with the TV is very tough. Consquently, the focus of the media in general has shifted from public service to earning more profits.

 

The circulation manager has a crucial role to play. He has to ensure that the circulation is not only maintained, but also upped while the business department struggles to cut costs. The battle is thus fought on two fronts. He has to make sure circulation targets are constantly met without losing the fact that he must identify readers who cal also be advertisers.

   

 

FDI In Print Media Increased To 49%

With the media reeling under the financial crunch, Information and Broadcasting Minister, Ambika Soni, has backed increasing FDI (foreign direct investment) in print media to 49%, saying “it is safe”. “I think it is a good suggestion,” Soni said in an interview when asked about her

“We already have 26% FDI. A large number of newspapers and the entire journalist fraternity is for the infusion of more capital into print media so that they can have better working conditions, and the media is facing a financial crunch,” she said.

“I feel 49 per cent is safe. It would not give control to someone from outside,” she said.

But she stressed that the government will consult all stakeholders before taking this crucial decision. “But this is something about which I would like to talk to those who are not of the same view,” she said.

Soni’s remarks indicated the UPA government’s interest in raising the FDI ceiling in print media from 26% to 49 as recommended by the Telecom Regulatory Authority of India (TRAI) in its recent report.

The 49% FDI, as proposed by TRAI, also covers foreign institutional investors. TRAI has also recommended a raise in the ceiling for cable networks from the existing 49% to 74% and for FM radio, from the existing 20% to 49%. The proposed hike in FDI is being opposed by some media houses, but the government is looking at the issue afresh in the light of the capital crunch that small and medium newspapers are facing.

Media houses oppose restrictions on cross-media ownership

Most media houses have strongly opposed any kind of restriction on cross media ownership, with a few even raising doubts whether the Telecom Regulatory Authority of India (Trai) even has the jurisdiction to deliberate and recommend over the issue. However, Trai had invited comments on the subject following a reference from the ministry of information and broadcasting (I&B).

The Bennett, Coleman and Co Ltd (BCCL) that has presence across the print, electronic and radio has cited the scope of Trai Act, to establish that the broadcast regulator doesn’t have the jurisdiction to cover the print media. It further says that countries with cross-media restrictions generally have few newspapers and broadcasters unlike India. The Indian Newspaper Society has also questioned Trai’s rights over mulling over an issue that includes the “print sector’ in it.

BCCL has favoured distinguishing between commercial media and news media “where FM radio licences and commercial content broadcasting licences pertain to commercial space while TV news channels and newspapers are in the news space. Regulations for these two categories can never be the same”.

Bharti Airtel, primarily a telecom player that recently ventured into DTH, and has plans to enter IPTV sector said, “Convergence of broadcasting and telecommunications has allowed to deliver one service using broadcasting technologies and through telecommunication networks… World-wide, all telecom companies are entering into the broadcasting sector and providing world-class carriage services to its customers”.

Bharti has said there should not be any restriction of cross-holding between telecom companies and broadcasting carriage services like cable, HITS, DTH, Mobile TV. Consumer organisations have suggested a 20% market share in at least two of the three verticals as a threshold for determining market control.

Indian Broadcasting Foundation, the apex broadcasters’ representative body holds that print and electronic media have already evolved in countries where such media ownership restrictions

exist while here the electronic media is still evolving. “In such early phase….television and print media have come together both for news content and economies of scale. There is a sound logic for a well-established newspaper enterprise to diversify in the electronic media to insulate it from the financial risk of dealing with the excessive volatility in the market of newsprint”.

TV Today group maintains that in India, with the availability of unlimited choice in TV, Print, Radio, Internet, developments in technology opening new avenues, no one would be able to monopolise or dominate even any particular medium. “Even in the print media, the leading English newspaper perhaps does not command even 5 % of the market share” said the TV Today.

Zee echoed the feeling “Indian scenario where highly competitive environment exists in each segment of Media – whether it is TV (about 350 channels with 72-80 broadcasters) or print media (62,000 registered newspapers across 24 languages, 9,000 in English alone or Radio (338 licenses across 87 cities, around 37 companies with no single player having more than 40 stations), DTH (5 already operational and 2 are in the pipeline), cable sector (approx 5,000 MSOs & 55,000 – 60,000 LCOs), there is absolutely no danger whatsoever by any stretch of imagination of any one player dominating the media landscape”….

Need for a debate on cross-media ownership rules

Most media companies in India and abroad are integrating vertically to sell cross-media, often acquiring or building multimedia platforms

Cross-media ownership in India is in the spotlight, with the Telecom Regulatory Authority of India (Trai) holding consultations on the issue.

These viewpoints—from diverse companies, such as media conglomerate Bennett, Coleman and Co. Ltd, the publisher of The Times of India, and mobile phone giant Bharti Airtel Ltd—are available on Trai’s website (www.trai.gov.in/Consultation Papers_content.asp).

Lets look at some evolving cross-media ownership patterns in India.

Typically, media businesses can broadly be categorized as carrier (medium), content (production) and distribution (platform). Carriers are television, radio, film, mobile, the Internet, newspapers and magazines. Content is typically the software—different genres of programmes for various mediums. Distribution is the carriage services that deliver content, including cable networks, direct-to-home (DTH) and Internet service providers. All these operations are heavily dependent on technology and are resource-intensive investments.

The last decade saw increased commercialization of Indian media with the entry of multinational media corporations and sharp expansion of domestic media companies. Inter-corporate investments and interlocking of directorships between media companies are also clearly emerging. In addition, the limited information on revenue patterns of media groups, especially large non-public ones, creates hurdles to getting a handle on media dominance and any emerging media monopolies.

However, it is possible to visualize three types of accumulation of ownership interest in the media: cross-media ownership across the various carriers such as television, radio or print; consolidation, including vertical integration among media operations of content, carrier and distributor within a media segment such as television or radio; and market share dominance in a given geography within each media segment.

In the diverse cultural, lingual and social settings in our country, it may be difficult to visualize conditions of media dominance leading to market monopoly.

However, there are already at least six states where a single media house has a clear and growing dominance. These are media groups that are emerging as national conglomerates. They are all in the news business as well as in entertainment, media distribution and network business. They own newspapers, magazines, radio, cable TV and television channels, to name their key businesses.

Most media companies in India and abroad are integrating vertically to sell cross-media, often acquiring or building multimedia platforms. News Corp.’s Star TV India and Sun TV Network Ltd already own DTH and cable distribution platforms. Star’s cross-media India operations include television channels, Internet offerings, radio, mobile entertainment and home video (incidentally, 11 cable distribution companies provide some 400 television channels in India).

Sun Network has 14 TV channels in four states, cable assets, four magazines, radio stations and two newspapers. In Tamil Nadu, the dominance of Sun in cable and satellite TV (channels and distribution network) and now in the DTH market is quite visible. Sun TV and its cable company are known to simply blackout political telecasts by rival Jaya TV.

Realizing the leverage provided by media, the Dravida Munnetra Kazhagam government has taken steps to start its own channels and even a government cable network. Similarly, realizing the dominance of the Eenadu group, the Congress government in Andhra Pradesh, in the form of the son of state chief minister Y.S. Rajasekhara Reddy, went all out to break this monopoly by starting a newspaper—Sakshi—and a television channel, besides promoting a few magazines.

In India, there is no general policy on ownership and cross-media restrictions, as far as restrictions between print and electronic media are concerned. However, the restrictions for different segments within the broadcasting sector are dictated by the policy framework for each segment, such as DTH guidelines or FM radio policy. I think it is indeed time to debate regulatory issues for cross-media ownership and, in the absence of an independent media regulator, the Trai discussions have long-term implications for the critical and booming Indian media industry. In my next column, I will look at cross-media ownership implications to audiences as well as to the industry itself.

P.N. Vasanti is director of New Delhi-based multidisciplinary research organization, Centre for Media Studies

Cross Media Ownership

 

By Asim Kumar Mitra

What is this cross media ownership? If any one branch of media holds stake in other media e.g. broadcast or television, it will be in a position to control the opinions of larger section of people which will ultimately injure the very root of pluralism in

democracy.

The other day, one of my very good friends was telling me that if you do not go through more than one newspaper you will not be able to find out the actual news. The reason is now-a-days almost every news starts with comment, develops with comment and concludes with comment. Hence, this difficulty. In yester-years, we used to listen to one adage saying: Facts are sacred, comments are free. Now we have deviated from that cardinal rule. Why? Many arguments can be put forward. But the fact remains that the business interest is playing a major role in this matter or in other words now-a-days business interest is prevailing over everything. Journalistic ethics and other moral values have taken a back seat.

 

This kind of degradation has its roots in the cross media ownership pattern. Now the question comes: what is this cross media ownership? If any one branch of media holds stake in other media e.g. broadcast or television, it will be in a position to control the opinions of larger section of people which will ultimately injure the very root of pluralism in democracy. Suppose, there is, on the one hand, a newspaper is publishing as many as seventeen editions from different cities of the country and on the other; one print media company has full or major control over a broadcast company or a television company. In both the cases, the free flow of information meant for the public in a democratic society will be definitely obstructed, if not totally killed. This is called cross media ownership.

The media authorities are now in a mood to deny and defy anything and everything legally, morally or socially important. Can one imagine that a very renowned daily newspaper of the country coming out everyday without the name of a proper editor? There is editor (marketing), brand editor, executive editor, managing editor, but there is no EDITOR although law of the land requires this and without fulfilling this provision it cannot be called a newspaper. But they do not care. Journalists have become contract-labourers under them. There is nothing noble in this profession now. Proprietors have become all-powerful. There is an unholy alliance between the media-proprietors and administrative heads. Having passed this extreme comments I must admit that there are exceptions and it is because of these exceptions there is a semblance of morality in the field of journalism although in a reduced form. Perhaps, for this reason, a good sense is prevailing in the minds of some people who have come forward to check the onslaught of cross-media ownership.

 

It has been proposed in the form of a bill to be introduced in the Lok Sabha. The name of the bill is Broadcast Services Regulation Bill. Through this bill government want to control so many unwanted developments, which have negated the basic motto of journalism i.e. free flow of news among the citizen. Through this new bill they want to control the monopolistic trend of cross media ownership. There is no dearth of other laws enacted by the Government of India. But what happened to them? In the media field, people sitting at the helm of affairs dismissed them just by money, power and muscle power. Even the institution like Press Council of India has become laughing stock as their judgments is frequently ignored by many media owners, although this body was created by them. If you yourself is determined to kill your own creation, then who, on earth, can save it?

 

May be this can be termed as world phenomenon as the scenario in Western Media, in this regard, is not at all different than that of ours. Most newspapers, television and radio stations are owned by large and powerful multi-national companies. In the USA, NBC and CBS (two television companies) are owned by corporations involved in arms manufacture and nuclear power (General Electric and Westinghouse). Several oil companies (Exxon, Texaco and Mobil) have seats on the boards of these news organisations. Time-Warner and CNN merged in the late 1990s to form one of the largest news and media monopolies in the world. Rupert Murdoch is the largest owner of television stations in the USA. Originally an Australian citizen, his American citizenship was fast-tracked by the Reagan administration to allow him to own television stations in the country.

Stories that highlight problems with nuclear power or waste, stories about oil companies involved with governments that violate human rights and stories about conflicts armed by Western companies are unlikely to be given much coverage. Stories that help the interests of the media owners are given prominence. One man, John Malone, owns 23 per cent of the world’s cable stations. His Discovery Channel commissions programmes after market approval and avoids controversial subjects. The phrase dumping down has entered the language as television concentrates on gossip and celebrity stories rather than serious issues. In Australia Rupert Murdoch owns 7 out the 12 national daily newspapers and 7 out of 10 Sunday newspapers. In one city, Adelaide, Murdoch owns all the newspapers. This cannot be good for pluralism. In 1975, one of Murdoch’s newspapers, The Australian, ran a campaign that helped remove the country’s democratically elected government by the UK appointed Governor General.

 

In the UK, News International (a company mostly owned by Rupert Murdoch) owns several newspapers (including The Times and The Sun), Sky Television (a major European satellite operator), Star Television (covering Asia) publishers like Harper-Collins.

 

In 1998, Rupert Murdoch owned 34 per cent of the daily newspapers and 37 per cent of the Sunday newspapers in the UK. He often uses the large resources of his multinational companies to lower the price of his newspapers in an attempt to put rival newspapers out of business. Successive UK governments have allowed his empire to grow in return for his media’s support. 53 per cent of UK newspaper and magazine distribution is controlled by just two companies, W. H. Smith and John Menzies. Smaller magazines (like the political or satirical Private Eye) can have (and have had) their distribution curtailed at the whim of these companies.

 

If media is controlled by few personalities or companies whose dispassionate gesture is hardly noticed then the future of democracy is bound to be reduced to demon-cracy.

Media says No to restrictions on cross-media ownership

Kishore Sharma – Televisionpoint.com | Mumbai

 

Just imagine a regulation where no single company can sell more than one variant of a chocolate brand or any other product or service. Since most marketers like to sell to a majority, all that consumers have, is duplication of the same variant, albeit with different brand names from different marketers.

 

Moreover, no one company can sell its one chocolate brand variant across the country in keeping with the letter of this law. Obviously, in such a case, consumers’ outcry will invariably result in the law being scrapped outright or least rewritten in favour of consumer choice in the free Indian markets.

 

In the media sector, giants such as the Bennett Coleman and Company ltd (BCCL) has presence across print, television, radio, internet and outdoor services. Essel Group has its interests in television, print, DTH, real estate and sports. Can this lead to a monopolistic scenario, the session on cross-media ownership on the third day of the FICCI Frames answered this and much more.

 

The Telecom Regulatory Authority of India (TRAI) is evaluating stakeholders’ response on the issue of need for cross-media ownership. Based on consultation papers, the regulatory body has solicited suggestions and comments from the stakeholders.

 

N Parameswaran, principal advisor, Telecom Regulatory Authority of India (TRAI), said, “We are evaluating the response of stakeholders on various issues that are connected with the consultation papers on cross-media ownership.”

 

Parameswaran added that “we have received response from 35 stakeholders. In December last, we held an open-house session in Delhi and are now evaluating those views as well.”

 

Media houses argue that media businesses require huge capital investments and have long gestation periods ranging up to 10-years or more and imposing cross-holding limits at this stage will retard the growth of the media industry. They also argue that it would affect the efficiency of the media businesses.

 

Today, there exist 300 television channels, and 100 others waiting for a nod from the Ministry of Information and Broadcasting; 8,600 newspapers and 250 FM stations. In this scenario, the government feels the need to put certain restrictions on the Indian media sector, Parameswaran claims.

 

“The I&B Ministry has made a reference of this to the TRAI, with the objective of rationalizing this issue. We are formulating a recommendation and will present it to the government,” Parameswaran said.

 

It is important to understand not just the provisions of cross-media laws in some of the most developed, vibrant and pluralistic markets such as the USA, but also the genesis of these laws.

 

Shantonu Aditya, executive director, UTV Global Broadcasting stated that there is no reason for regulation and that variety is good. “A consumer is not bothered by which media company produces what newspaper or launches what channel. The consumer seeks variety entertainment,” he stated.

 

Aditya continues to explain that India is not a land of one language. “We have over 15 official languages with hundreds of dialects, as you move from one region to another. Print media has a reach of over 200 million, compared to TV’s 500 million. If anyone has a monopoly today, it is Prasar Bharati. No C&S TV channel in India commands an audience share greater than 20%, let alone the 45% threshold prescribed in the US cross-media legislation.” Aditya says.

 

Giving a perspective on the US market, Monica Desai, chief, media bureau, Federal Communications Commission (FCC), USA, said that strict legislation exists in this regard. “The FCC sets the rules on how many media outlets a single entity can have. This is reviewed every four years,” she said.

 

Desai noted that cross-media laws in the US were a result of big television channels controlling terrestrial networks and, therefore, the need to prevent their control over other media in newspapers and radio. In India, terrestrial television is the sole monopoly of the government with Prasar Bharati running terrestrial television in Doordarshan.

 

“In 1975, the FCC banned cross-media ownership for players operating in the same local market. In 2007, however, we evaluated the pros and cons and decided on a few combinations, depending on whether it is favourable or not,” she said.

 

Aditya also said that with news and views on radio being a monopoly of the government-run All India Radio, as also AIR’s monopoly over short-wave and medium-wave radio broadcast, the very talk of any one private FM player’s ‘dominance’ sounds ridiculous.

 

Aditya requested Parameswaran to consider the fact that the consumers are used to what they see and read and that the restriction must not hamper this. “What needs to be taken into account is that regulation in media will be put in after its decade-long existence, whereas in other sectors such as telecom, it was there right from the start,” he added.

 

The government’s intention of supporting plurality of media voices and preventing anyone’s control over this voice for the benefit of consumers is best served by supporting both old and new media.

 

The government should not put spokes in the growth of old media, or mitigate the size and scale of media organisations. Most of all, it should not deny them their fundamental right of free speech or access to new media technologies.



Structure of Media Ownership

Who owns the media clearly has an enormous bearing on the way in which they will cover elections – or any other political issue. State-owned media are often under direct government control and will therefore tend to favour the ruling party. Privately-owned media may also serve the political interests of their proprietors, while in some countries, the political parties themselves may own significant media outlets.

The structure of ownership is also likely to have a bearing on questions such as how far political advertising is permitted during elections. It is well known that the United States, with media that are almost exclusively in private hands, organizes direct access by political parties to the media by means of paid advertising. But that is not an isolated example. For example, Finland, where commercial broadcasting developed rather earlier than in most of Europe, has a far freer approach to paid political advertising than most European countries. Countries like Britain and Denmark, with a stronger tradition of public ownership of the media, do not allow paid political advertising at all, but instead have a system of free direct access broadcasts.

Media ownership is sometimes seen as a simple reflection of political conditions: dictatorships or authoritarian regimes control the media directly, while democracies allow pluralism of ownership. There is a grain of truth in this, but it is clear that the reality is much more complex. Most Western European democracies, for example, had a state monopoly of broadcasting until relatively recently. Britain legalized private commercial broadcasting in the 1950s, but France, Germany, and Denmark did not do so until the 1980s. Britain and France are particularly important examples because of their extensive colonial legacy that influenced the organization of broadcasting and media in scores of countries.

In Britain and France, there was historically a strong distinction between broadcasting, with its strong public element, and the privately-owned print media. The argument for the involvement of the state in broadcasting – or at least in the allocation of broadcasting licences – has been that the frequency spectrum is a finite public resource. Access should therefore be allocated impartially. However, in some long-standing democracies – for example in Scandinavia – there is a tradition of public funding of the print media, usually as a means of ensuring pluralism.

Conversely, the private media in Latin America were often closely identified with the military dictatorships of the 1960s and 1970s. Far from facilitating pluralism, these media houses advocated its suppression. Indeed, many would argue that the large corporations dominating the US media are not conducive to the expression of alternative political viewpoints. Whatever the truth of such contentions, it is clear that there is not a direct correlation between private ownership and pluralism.

Economics also play an important part in determining the structure of media ownership. The size of the advertising “cake” varies according to economic conditions, but there is generally not much that individual media organs can do about it. All private – and some public – media are dependent upon advertising to make their business sustainable. One reason for the great weight of the public sector in the media of poorer countries is the small size of this cake – and in particular the fact that government advertising comprises a large proportion of it.

In African countries, for example, as well as parts of Asia and Latin America, this explains why national radio stations, broadcasting on medium- and long-wave frequencies, are almost entirely a publicly-owned phenomenon. Private advertisers are primarily interested in reaching an urban audience with disposable income – the type of audience served by private FM stations (most of which primarily broadcast music). Even when broadcasting regulations permit – and often they do not – neither private broadcasters nor advertisers have much interest in broadcasting to the entire nation. In this context, pluralism over the airwaves can only be ensured by developing a clear public service mandate for the state media.

The emergence of media such as satellite and cable television complicates this picture but, contrary to some of its most fervent advocates, does not change it fundamentally. Obviously, those who can afford to subscribe to a pay channel will not be among the poorest – television owners seldom fall into that category anyway. Local cable and satellite providers are subject to the same political and economic constraints as those broadcasting on terrestrial channels. Multinational broadcasters such as Cable News Network (CNN) and the British Broadcasting Corporation (BBC) can play an important role in breaching broadcasting monopolies. That is why many countries, especially in the Middle East, have prohibited ownership of satellite dishes (a prohibition that was circumvented in one memorable North African case by the widespread substitution of cous-cous pans). The Middle East has been fertile soil for satellite viewing because it shares a single language, Arabic. Few other regions of the world have a common language, with the result that English-language broadcasts from Atlanta or London will have only limited impact.

For the sake of simplicity, the different types of media ownership can be summarized thus:

  • public or state-owned media, primarily in the area of broadcasting.
  • private broadcasters.
  • predominantly privately-owned print media.
  • community media.
  • media directly owned by political parties.

Whose media are they anyway?

The draft Broadcast Bill does not reflect a nuanced understanding of the complex and contentious issues relating to media ownership. At the same time the objections raised by India’s media industry do not acknowledge the fact that media regulation in most ‘mature democracies’ includes restrictions on media ownership, writes Ammu Joseph.

When Rupert Murdoch finally won his bid to take over Dow Jones and The Wall Street Journal earlier this month, the Australian media baron added one of the oldest, most respected and widely circulated newspapers of the United States to his vast media empire. Murdoch’s News Corp media conglomerate already owns over 175 other newspapers in addition to the Fox Television network, 21st Century Fox film studios, several satellite networks, MySpace.com, HarperCollins, and much more.

  • In 1983 the principal global media were owned by 50 corporations, most of them US-based. By 2002 this had fallen to just nine corporations. Today the figure is about five. Murdoch has reportedly predicted that there will eventually be just three global media giants and that his company will be one of them.
  • Murdoch has often been accused of using his media holdings to advance his political agenda. In 2003 all 175 of his newspapers reportedly supported the invasion of Iraq. Thanks to his frequent interactions with former British Prime Minister Tony Blair in the lead-up to the war, he came to be known in political circles as “the 24th member of the [Blair] Cabinet”.

The draft Broadcast Bill and Content Code recently revealed by the Ministry of Information and Broadcasting have raised some heat and dust within the Indian media community. Much of the discussion so far has focused on the Code and its likely effects on freedom of expression. Although initial reactions from the media industry reflected some unhappiness with the Bill’s provisions relating to media ownership, that issue subsequently slipped out of sight. Yet matters relating to ownership are central to debates on media regulation across the world and need to be taken on board here, too.

The controversial Section 12 of the Bill introduces ‘restrictions on accumulation of interest’ – or curbs on media ownership. Two clauses restrict cross-holdings between broadcasters (e.g., television channels) and network operators (e.g., cable and DTH companies). Another proposes restrictions on the number of channels a broadcaster can control within a city or a state; a ceiling at the national level is also mooted. The clause relating to cross-holdings across media segments (print and broadcast, for example) at present only gives the government the right “to prescribe eligibility criteria and restrictions… from time to time.”

According to the draft legislation, the purpose of this section is to prevent monopolies across different segments of the media, as well as within broadcast segments, in order to ensure plurality and diversity of news and views. However, it is not clear whether the government’s intent is to restrict market presence (in terms of media outlets) or market share, and within the latter whether the criteria relate to revenues or audience. The draft also stops short of fully addressing what media reports have loosely termed “cross-media ownership”.

The draft legislation certainly does not reflect a nuanced understanding of the complex and contentious issues relating to media ownership, which continue to be debated by regulators, media organisations and citizens across the world. At the same time the objections raised by India’s media industry do not acknowledge the fact that media regulation in most ‘mature democracies’ includes restrictions on media ownership. The necessary discussion on media ownership issues in India could be enriched by a closer examination of international experience in this area.

In defense of diversity and plurality

The preservation of diversity and plurality in the media is globally recognised as a legitimate goal of media policy. It is widely accepted that plurality of voices in the media, diversity in sources of news and information, and access to varied ideas and opinions are of vital importance because of the critical role the media are supposed to play in democratic societies.

In several ‘developed’ countries existing restrictions on cross-media ownership within broadcasting legislation have in recent times given way to regulation under competition laws and policies, but ownership matters remain a relevant and valid aspect of media regulation. At the same time, it is widely understood that the only justifiable purpose of any regulatory interventions in issues of ownership in the media sector is the protection and promotion of the public interest.

In fact, all media regulation is meant above all to serve the public interest. This is explicitly stated in the terms of reference of regulatory bodies in many parts of the world. For example, under the Communications Act, 2003 of the United Kingdom, the principal duty of the Office of Communications (Ofcom) — the independent regulator and competition authority for the UK’s communications industries — is to further the interests “of citizens in relation to communications matters” and “of consumers in relevant markets, where appropriate by promoting competition.” Among its specific duties are “ensuring a wide range of TV and radio services of high quality and wide appeal” and “maintaining plurality in the provision of broadcasting.”

In its 2003 guidance notes on cross-media ownership the UK’s Radio Authority (subsequently subsumed within Ofcom) listed the various matters to be taken into account in determining public interest. The document also highlighted the need for public comment and/or consultation on transactions under consideration by the regulatory authority.

Two years earlier, the UK government’s paper titled ‘Consultation on Media Ownership Rules’ prompted responses from a variety of interests — ranging from regulatory bodies like the Radio Authority through media companies like Bloomberg to citizens’ groups like the Campaign for Press and Broadcasting Freedom. Despite their varied views on the details of the Consultation, all of them acknowledged the importance of plurality in media and the need for regulation – to a greater or lesser extent – to protect and promote it.

The Australian Press Council’s ‘Freedom of the Press Positions’ includes a section on ownership issues: “Access by all Australians to full, truthful, unbiased information about world and domestic events and to a pluralist range of opinions and commentary about those matters from an Australian perspective is the key issue to be considered in determining government policy on media ownership.”

The APC’s policies in this area favour plurality of media outlets, diversity of views, and due regard for Australian content in the print media. According to the Council, media ownership should be governed by competition law, with ownership regulation handled by the Australian Competition and Consumer Commission under the competition policy aspects of trade legislation. However, it proposes the application of a media-specific public interest test, which would place a high value on the need for media diversity and the significance of local content.

Interestingly, in view of Rupert Murdoch’s growing global media empire, the APC believes foreign takeovers of major city newspapers and free-to-air TV channels should continue to be subject to the Australian Foreign Acquisitions and Takeovers Act in his country of origin.

The perils of laissez-faire for India

At present Indian broadcasters’ opposition to the provisions on media ownership in the draft Broadcast Bill essentially amounts to a generalised rejection of the very idea of ownership regulation, based on the notion that such restrictions are archaic and would stunt the growth of the media industry. Criticism of this aspect of the Bill has also implied that rules restricting ownership have been reversed in other countries.

That is not strictly true. If there has been a period of deregulation in some countries, there is now widespread concern about the impact of such policies: the US is, of course, a prime example (See: Public missing in Broadcast Bill debate). But so is Italy, where former conservative Prime Minister Silvio Berlusconi owns three of the country’s seven national television channels, two newspapers, the largest publishing house, the biggest advertising agency and numerous Internet ventures. When in power he also held sway over the state-owned broadcaster, Rai, which accounts for three other national channels. Berlusconi’s Mediaset and Rai together dominate Italy’s TV market. In addition, his huge presence in advertising guarantees him considerable influence over commercial media that he does not directly own or control.

To make matters worse, media legislation passed in 2004 during the Berlusconi regime rolled back ownership restrictions and initiated the partial privatisation of Rai, apart from creating new digital TV channels. Critics claim the law only reinforced Berlusconi’s hold on the country’s media. The new government headed by Prime Minister Romano Prodi plans to reverse these changes and also make it illegal for a media company owner to hold public office without divesting his or her holdings.

Canada provides another example of rampant media concentration, with three companies controlling most of the country’s private media. In June 2006 a Senate Committee released a detailed report on the Canadian news media, based on a two-year investigation, which identified as a serious problem the fact that “many regions and markets are characterised by high levels of concentration in news media ownership and/or cross-ownership.” Pointing out that there were many “areas where the concentration of ownership has reached levels that few other countries would consider acceptable,” the Committee highlighted the weaknesses of the present regulatory system that had permitted such developments. According to the report, “Any proposed solution must recognise, as a matter of policy and law, that there is a public interest in news media mergers.”

In what may well amount to closing the stable door after the horse has bolted, the Canadian Radio-Television and Telecommunications Commission announced earlier this year that it would hold “a public hearing to review its approach to ownership consolidation and other issues related to the diversity of voices in Canada … in light of the current wave of consolidation in the Canadian broadcasting industry.” Issuing a public notice in April that set out the scope of the proceeding, the Commission gave the public three months to submit written comments on the various matters under consideration. The hearing is slated for next month.

Contrary to the impression conveyed by the Indian media industry and its advocates, restrictions on media ownership are very much in place in most parts of the democratic world. French law, for example, restricts the ownership and control of private sector broadcasters. The United Kingdom limits ownership of national newspapers and certain types of broadcast licences. Germany restricts cross-ownership of multiple media outlets, as does the US – which also restricts the number of broadcast stations (radio or television) that a single person or entity can own in a given geographical area. Australia restricts foreign investment, concentration and cross ownership of broadcasting.

Emerging evidence of consolidation in Indian media

The media industry here may be justified in pointing out that there is at present nothing close to a monopoly situation within the Indian media. However, there is some evidence that the process of consolidation is well under way. For example, while the 1995 figures of the Audit Bureau of Circulations (ABC) led South Asia and media scholar Robin Jeffrey to conclude that there was considerable diffusion of newspaper ownership in India, within a few years the situation had changed quite dramatically. According to Jeffrey, the ABC’s 2001 figures indicated trends towards market domination, if not monopolies, within the press.

In the 2003 edition of his landmark book, India’s Newspaper Revolution, he observed that the overwhelming dominance of two newspapers (per language) had become evident in seven of India’s 13 major languages: in three of these (Malayalam, Punjabi and Tamil) the two lead papers controlled more than 80 per cent of the total circulation, while in another three (Assamese, Gujarati and Kannada) they controlled over 70 per cent, and in one (Bengali) over 60 per cent. In English two newspapers accounted for nearly 50 per cent of the total circulation. In Telugu, there was just one dominant player, boasting nearly four times the circulation of its nearest rival.

If this is the trend within the large, privately owned, and traditionally diverse print media sector it is unlikely that the relatively new, even more capital-intensive private broadcast sector is any different, especially with the rise of cross-media ownership and the blurring of boundaries between old and new media. Already several media houses have stakes in print, radio, television, the Internet and cable operations.

In this context, a recent article on the Voice & Data website, quoting top executives in the broadcast industry, is fairly revealing. Their primary concern is obviously that the proposed restrictions on cross-media holdings will affect not only fresh investments but also plans for expansion through acquisitions. According to the piece, “Cap on cross holdings has been vehemently opposed by the industry as this will have a direct impact on the growth of the industry as broadcasters are actively looking at growth through merger and acquisitions.” The article suggested that several of the draft Bill’s provisions relating to ownership are bound to have serious financial implications for the industry, hampering mergers and acquisitions, discouraging consolidation, causing fragmentation and necessitating the revision of existing as well as emerging structural patterns and financial arrangements.

From the industry’s point of view such developments are clearly not welcome. However, in view of the primacy of the public interest in matters of media regulation in a democracy, the critical question is whether they would be good or bad for citizens and consumers. These are complicated issues which require careful study and analysis.

For example, the Voice & Data article points out that the media business requires large capital investments and involves long gestation periods, which already limit entry and sustainability. Industry experts quoted in the piece suggest that since the “arbitrary limits” included in the draft Bill “will make the media business commercially unsustainable for many,” only a few dominant players with the financial muscle to stay the course will be able to survive. If that is indeed true, it would evidently defeat the very purpose of such restrictions. But only a thorough assessment by knowledgeable, independent experts can yield the information and insights necessary to determine whether or not such fears are well-founded.

Can competition regulation serve the purpose?

Similarly, India’s media industry representatives claim that existing legislation, such as the Monopolies and Restrictive Trade Practices Act and the Competition Act (under which there is apparently a Competition Commission), can take care of the problems Section 12 seeks to address. This is another matter that requires closer examination: will trade and competition laws by themselves serve the purpose or should they be supplemented with a public interest test, as proposed by the Australian Press Council, or is even that not enough?

According to the Campaign for Press and Broadcasting Freedom, UK, “While competition regulation can successfully tackle economic competition between firms, it has widely acknowledged limitations as a means of regulating for pluralism and diversity. As the former EC Competition Commissioner Van Miert stated in 1997: “My personal opinion is that I am convinced of a need for European legislation on media concentration…We cannot use competition rules to govern democratic issues.” Above all, competition regulation may tolerate monopoly or oligopoly provided that markets are economically contestable and so allow conditions that threaten pluralism. In contrast, the public policy concept underpinning anti-monopoly measures concerns the effects of concentration on the public interest rather than on competition. Communications regulation needs to be based on the recognition that media contribute to pluralism, diversity and quality of information and hence require a separate regulatory structure from that which governs other parts of the national and global economy.”

Charting a media regulation path for India

The need for media regulation is beyond question. There is little doubt that ownership issues are legitimate concerns within media regulation. The question is how regulation is to be approached and implemented. And whether India wants to follow the North American example, letting things slide in the direction of deregulation and then trying to undo the damage, or the many examples in other parts of the world where regulators have tried to preserve media diversity and plurality – in the public interest — without compromising on freedom of expression or the economic health of media organisations.

Considering the complexity and controversial nature of ownership issues, they clearly need to be studied more carefully, understood more fully and handled with more sensitivity than they have been so far. Most importantly, any restrictions on media ownership must be defensible on grounds of public interest, with particular reference to media diversity and plurality.

According to Mukul Sharma writing on Media and Governance in Seminar in 2002, “The trend towards increasing concentration of ownership and a decline in diversity cannot be stopped unless there is a national policy or some public action from below.” Perhaps there is a third way: policy based on public consultation – prompted, if necessary, by citizen action.

Regulatory decisions, which necessarily impact people and organisations, need to be based on evidence and take into account the views of those who have an interest in the outcome, which includes the general public. As Ofcom puts it, “Consultation plays an important part in achieving this. It allows those who could be affected by or concerned about a particular issue to give us their views before we decide on a course of action. Consultation is an essential part of regulatory accountability – the means by which those people and organisations affected by our decisions can judge what we do and why we do it.”

Unfortunately, the Broadcast Bill is not only short on evidence but, worse, it did not evolve through a process of consultation.

In a recent press release issued by Free Press, a media reform organisation in the US, media scholar and activist Robert W McChesney expressed the hope that the culmination of the Dow Jones/Wall Street Journal deal is “the wake-up call Washington needs to start rolling back media consolidation…Murdoch’s empire wouldn’t exist if he hadn’t been aided and abetted by Washington policymakers in Congress and at the FCC. Only by restoring public input in the policy-making process can we create the kind of diverse, accessible and independent media that journalism — and our democracy — so desperately needs.”

Public input is precisely what has been missing through the long and winding history of media regulation in India. No wonder even the latest, 20th draft of legislation meant to regulate the broadcast sector has kicked up such a storm. This may be an opportune moment to change the course of that history, as India celebrates its Shashti Poorthy and stakes its claim to be a mature democracy.

‘Media a prisoner of profit concerns’

THIRUVANANTHAPURAM: The media in India is politically free but a prisoner of profit concerns, renowned journalist P Sainath has said.

Taking part in a symposium on ‘Whither the Media’ at the International Congress on Kerala Studies organised by the CPM here on Monday, Sainath said that one should differentiate between the media and journalism before listing out the challenges.

‘’Media is a business while journalism is a calling,’’ said Sainath who criticised that the corporate media in India have ethical, moral, political and social deficit. ‘’We still have some space which is shrinking. First of all, we need to make a choice whether to be journalists or to be stenographers,’’ he told journalists among the audience.

Referring to the fallout of Niira Radia tapes, Sainath criticised the effort by a section of media to paint Tata and Ambani as innocent and putting the entire blame on Niira Radia.

‘’There are arguments that Tata and Ambani are innocent lambs misled by Niira Radia. Had Radia been the PR agent of Xandu balm or Hanuman agarbati, would she have wielded the same clout?’’ asked Sainath.

Fredrik Laurin, noted investigative journalist from Sweden, said that the issues of the media industry needed to be differentiated from the issues of journalism.

‘’Journalism is basically okay. Nothing still wrong with the core product. Reporting is in good shape and is of great demand,’’ he said.

He, however, admitted that the newspaper industry was facing a crisis.

Suggesting that funding journalism with public money can be one of the solutions for the crisis in the industry, Laurin said that Swedish Public Broadcasting group, for which he works, was functioning that way.

‘’Another model is that of the Guardian where a non-profit trust runs the media,’’ he said.

Senior journalist K Sasikumar, who was the moderator of the symposium, opined that it was quite natural for the media to be more concerned about the advertiser as 80 percent of its revenue comes from marketing.

Sasikumar said that the absence of a law to restrict cross-media ownership in India had made the climate ripe for the growth of monopolies.

The Hindu editor-in-chief N Ram, Deshabhimani resident editor Prabha Varma and Kudumbashree mission PRO R Parvathi Devi also took part in the debate.fc



UNDERSTANDING COMPANY LAW

Companies Act 1956 explains the procedure of the how to form a company, its fees procedure, name, constitution, its members, and the motive behind the company, its share capital, about its general board meetings, management and administration of the company including an important part which is the directors as they are the decision makers and they take all the important decisions for the company their main responsibility and liabilities about the company matter the most.

The basic objectives underlying the law are:

  • A minimum standard of good behavior and business honesty in company promotion and management.
  • Due recognition of the legitimate interest of shareholders and creditors and of the duty of managements not to prejudice to jeopardize those interests.
  • Provision for greater and effective control over and voice in the management for shareholders.
  • A fair and true disclosure of the affairs of companies in their annual published balance sheet and profit and loss accounts.
  • Proper standard of accounting and auditing.
  • Recognition of the rights of shareholders to receive reasonable information and facilities for exercising an intelligent judgment with reference to the management.
  • A ceiling on the share of profits payable to managements as remuneration for services rendered.
  • A check on their transactions where there was a possibility of conflict of duty and interest.
  • A provision for investigation into the affairs of any company managed in a manner oppressive to minority of the shareholders or prejudicial to the interest of the company as a whole.
  • Enforcement of the performance of their duties by those engaged in the management of public companies or of private companies which are subsidiaries of public companies by providing sanctions in the case of breach and subjecting the latter also to the more restrictive provisions of law applicable to public companies.

 

   

 

  

 

 

 

 

 

 

 

CASE STUDIES/ EENADU ETC

EENADU:

Eenadu, which is run under the ownership of media tycoon Ramoji Rao, is regarded as one of the biggest newspaper success stories. In the south, especially, Andhra Pradesh, it has established itself as one of the pioneering and premiere newspapers.

 

Eenadu started publication as a purely local newspaper in 1974 from Visakhapatanam. Thanks to the vision and innovative marketing strategies, it slowly and steadily climbed its way to the top. Today, it is considered a major force and boasts of a circulation that has penetrated even into remote villages.

 

Three months after it opened its Visakhapatanam edition, it launched an edition from the Andhra capital of Hyderabad. This gave it a statewide exposure. The Eenadu employed a dedicated team of delivery boys who were trained to find out new and potential readers in their respective delivery areas.

 

As incentive, they started giving their copies free to new readers so they could get used to the product. The competition was tough. There were two other Telugu dailies who were doing exceedingly well at that time. Andhra Patrika (the same group that manufactured Amrutanjan pain balm) and the Andhra Prabha. All these dailies claimed to care for the Telugu sentiment. However, the marketing strategies of Eenadu turned out to be more productive. Thus, it could open more editions in Tirupati (1982), Anantpur (1991), Karimnagar (1992) and Rajahmundry (1992).

 

Such good were its production values and content that within four years of its launch – in 1978 – it overtook Andhra Prabha in circulation and popularity.

 

14 years later, the Eenadu launched another novel experiment. It began to introduce in its main paper, supplements that catered to district places. These supplements were in the form of tabloids. This was an ace marketing strategy and it helped Eenadu to establish a rapport with its readers located even in small villages. The tabloid supplements would be 8—12 pages each and covered the districts in detail.

 

Around this time, Eenadu had done so exceptionally well that Andhra Patrika was forced to shut down with another publication Udayan. Just how effective Eenadu was could be understood from the fact that it captured over 75% of the (audited) circulation of all Telugu dailies.

 

Today, it has editions in Maharashtra and Karnataka also. According to official figured, till 2005, it had over 25 editions.

 

RAJASTHAN PATRIKA

Founded in 1956, by publisher, editor Karpoor Chandra Kulish, The Rajasthan Patrika is among the five successful Asian community newspapers. It is the ONLY English daily of Rajasthan, which is the second largest state of India.

It now owns the Patrika TV (their news channel like ToI has Times Now), and Rajasthan’s only film shooting studio in the private sector. It has a children’s fortnightly magazine called “Balhans” and a book publishing unit that has so far over 100 books on Vedic studies and Indian Culture. The Patrika  also runs an institute of electronic communication, offering two PG courses in video production and Mass Communication.

 

The paper has seriously stuck to journalism of good values. Bhairon Singh Shekhawat, the Vice President of India, once upon a time covered legislature proceedings for the Patrika. Interestingly, Shekhawat became a member of the same Rajasthan Assembly.

 

The paper became financially stable only in the 1980s. Before that, it set up the first rotary printing press in 1972 and first offset printing press in 1978. In the 80s it had four editions. In 1984, it launched its English daily. Such was its phenomenal growth that by 1985, it had correspondents in US, England, Canada, Japan, Gulf and Bangladesh. It also established its own offices in Delhi, Mumbai, Chennai and Bengaluru.

 

The Patrika covers every nook and corners of Rajasthan. Official figures say it has a readership of 28 lakh with 85% of Hindi readers.

 

Patrika’s editorials are widely read and appreciated.It is one of the newspapers that allows readers to criticize itself through the letters column. It is also regarded as an ideal community newspaper that has something of interest to all sections. But it has earned the respect of readers as a responsive newspaper that cares for the people.

 

Apart from being a responsible paper, Patrika has also fulfilled its social commitment in 1994 by raising Rs 45 lakh for earthquake victims of Latur in Maharashtra. It also raised Rs 2 lakh for the quake victims of Garhwal region.and sent them 1000 blankets. It has a charitable trust that undertakes charity and relief work.

 

The paper has effectively controlled the hawkers and agents network by offering them handsome commissions. It has its own advertising agency, thus caputing the ad market too.

 

The Patrika claims to be a family paper. It therefore screens all news and ads for obscenity, vulgarity and indecency.

 

The Patrika has editions in Jaipur, Jodhpur, Udaipur, Kota and Bikaner. It has a circulation of over 5 lakh copies, not just in Rajasthan, but in many Hindi-speaking states.   

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