Tag: media

Indian Media: Going Strong

In January last year, Reliance Chairman Mukesh Ambani surprised one and all by investing over Rs 1,700 crore in Raghav Bahl’s debt-ridden media entities Network 18 and TV18 Broadcast that would give him access to ready-made content.

The deal reflected the attractive growth opportunities present in the media sector, considered as ‘sunset’ industries in developed markets but flourishing in India. The readership in newspaper industry may be declining in many international markets with the advent of digital media but continues to thrive in India, thanks to increasing literacy rates and higher disposable income coupled with growth of regional and special interest newspapers.

MEDIA SEGMENT GROWTH

In 2012, media and entertainment (M&E) industry grew at 12.6 per cent to Rs 82,000 crore, says a Ficci-KPMG report. While a slowing global economy and reduced advertising budgets is likely to pull down growth slightly to Rs 91,700 crore this year, the future looks promising.

Driven by digitization, strong growth of regional media, upcoming elections, burgeoning film industry and fast increasing new media businesses, the sector is set to grow at a healthy rate of 15.2% to reach Rs 1.66 lakh crore by 2017.

Last month, DB Corp, which publishes eight newspapers with 65 editions in Hindi, Gujarati and English including Dainik Bhaskar and Divya Bhaskar reported strong set of numbers with net profit rising by 74% to Rs 76 crore. The Kalanidhi Maran-owned Sun Television Network also saw net profit rising to Rs 164 crore during the June quarter while HT Media clocked a net profit of Rs 47 crore. Reliance Broadcast and Dish TV narrowed their losses during the quarter.

RESULTS

 

The print media accounts for 46% of the total ad spending by advertisers.  Despite the surge in alternative media (private TV, radio and internet) over the past three decades, print holds value and derives its appeal from high degree of regionalization and localization, broad based coverage, etc. However, off late, slowing ad revenue growth and rising newsprint prices have forced companies to cut down on non-profitable editions to stay afloat. Regional markets (especially Hindi) have been growing faster than metro-focused English markets.

Markets beyond tier-1 cities are largely catered to by the regional print media (Hindi and other languages). Also, the penetration of digital media in these markets is lower due to poor infrastructure and language barrier as digital media is largely English centric.

HINDI SEGMENT

While the M&E industry continues to grow at a strong pace, proper regulation to ensure plurality and diversity of views has been found lacking. With increased commercialisation and entry of multinational media corporations in Indian media, cross media ownership has been a tricky subject that the industry has failed to address.

Broadcasting companies owning television channels are venturing into distribution segments of cable television, Direct-to-Home (DTH), Headend-in-the-Sky (HITS) and Internet Protocol Television (IPTV) while distribution segment companies are entering into television broadcasting, sparking fears of content monopoly and market power.

Companies like Bennett, Coleman & Co Ltd and Anil Dhirubhai Ambani Group, among others, have a significant presence in print, TV and FM radio while Sun TV and Essel Group have interests in print, TV, FM as well as distribution platforms like Direct-To-Home (DTH) and MSOs.

CORPORATE GROUPS PRESENCE

 

An Administrative Staff College of India (ASCI) report in 2009 recommended that cross media ownership rules for broadcasting, print and new media must be put in place since there is ample evidence of market dominance in certain relevant markets.

Also, political parties, either directly or indirectly control newspapers, TV channels and cable TV distribution. Such players may selectively stream content to suit the needs of their political masters and also suppress competition in the market, depriving consumers of unbiased information.

Tamil Nadu is a prime example of this where political parties of all hues own news channels and thus control the flow of information.

The growing clout of Ambanis and other corporates have raised concerns that they can influence policy making to promote their vested interests while generating business revenues for themselves.

GLOBAL RULES

 

Lack of regulation has given rise to the culture of paid news, corporate and political lobbying, biased opinions and sensationalism in reporting, especially in entities with business and political interests.

The government should limit the number of licenses held by a single entity, restrict ownership across media and telecom companies. The key is to ensuring a high level of plurality of news and views while providing freedom to companies to expand and innovate.