The Business of Media

The power of media in a globalised world - Three day international seminar organized by the institute of objective studies, New Delhi

At Yavanika, Bangalore October 15- 2011


-The Business of media -

Commercialisation of media

As a film buff, I start my speech with some preconditions, clarifications and denials.

All examples in my speech are true. All persons, contexts, quotes and situations are not imaginary. They relate to living persons and actual happenings. Any resemblance to real persons, living or dead is surely intended. Anyone who disagrees with me can meet me for a chat and coffee in the Gas college compound in front of Yavanika.

There is a joke among TV channel reporters. A TV reporter died and went to hell for telling lies. He was tortured in various ways for a year. Then, Lord Yama, the CEO and managing director of hell, told him to go back to Earth to do some good deeds so that he can get a chance to go to heaven later. On his way back the reporter saw, from a distance, another person being tortured severely. The reporter, out of his natural instinct, asked the guards who he was and why he was being treated that way. They told him he was the owner of a TV channel who had died ten years ago and had no chance of being released. ``Your sin was ambition, he is being tried for greed,’’ he was told.

Let us examine the theme, by slicing it up.
1. Cost and economy of media
2. Whether media houses should be sustainable entities or profitable ventures
3. Are greed and lust for clout reasons for setting up media houses
4. Is the media being used for totally non media purposes?

Now for some stories
The first one is about the cost.

1. Cost of setting up a newspaper. While I was researching for this paper, I spoke to some people who had started or set up newspapers, including my former employer.
2. I also spoke to some one who was closely involved in the setting up of a TV channel, some from government and private radio companies and internet entrepreneurs.
3. The average cost of setting up an Indian language newspaper at the state level is said to be between 40-50 crore. That is if you are looking at having your own printing and transport facilities and plan 5-6 printing centres.
4. The annual recurring cost is between 4-8 crore. This cost increases by about 20 times if you are looking at a paper in a language that is spoken in 3-4 states.
5. The costs of a TV channel are almost equal. However the recurring costs based on logistics and consumables are less than that of a newspaper. Interestingly, the cost difference between setting up an Indian language channel and a Hindi or English channel are not as high that of a newspaper. That is probably one reason why you see higher growth in news channels than papers.
6. The cost of owning and operating a radio company are very less compared to these two. An educational FM radio station in a district like Gulbarga costs just around Rs 2 lakh while a corporate FM station in Bangalore has cost a media company around Rs 1-2 crore. Easy to see, it is 100 times costlier.
7. News portals it seems, are the cheapest media outlets. A plain -text news website operated by one person, costs just Rs 5,000 a year if it uses free software tools. Transfer of data is cheaper than transfer of voice, pictures or video. (That is why sending a SMS is cheaper than making a call.)

However, a multi media website that has videos, pictures, and employs a group of persons to create content costs between Rs 60-90 lakh per year. This is among those who have their own connectivity infrastructure and servers.

The opinion in the industry is that this cost was less than half 10 years ago. It is expected to more than double in the next ten years.

Awareness about the cost
How many of our news consumers understand this? Most readers for example, don’t know that their daily paper is an insanely subsidized product. How many of you know that a copy of your daily paper costs between Rs 30-60? Readers in Bangalore, for example pay Rs 2.5 for a paper with an average of cost of Rs 50. That is a subsidy of 95 per cent. (Media has so much power that papers seem to escape inflation!)

I was heading the bureau of a newspaper in a north Karnataka town and my owners wanted to print the paper there. They invited bids. The bid went to the one who promised to reduce printing and supply costs by Rs 4 per copy.

Users have no issues paying Rs 300 for a DTH connection or cable TV. But we can’t imagine selling a paper for Rs 10 a day. Even a slight increase in the newspaper’s price affects circulation.

If people are willing to spend more for their daily paper, the anomaly in the newspaper economy will be rectified slightly. It will also reduce the pressure of the advertiser to some extent.

The next set of stories is about the ``commercialization of media’’.
According to the Webster dictionary, commercialization is ``to exploit for profit, especially at the expense of quality.’’ Therefore, at least with reference to today’s discussions, there is no positive connotation to the term `commercialization’.

There are two issues here. One is to make media a sustainable venture, if not a profitable one. The second one is journalism being used for protecting other interests.

The first however, is losing direction mainly because of the greed of a few individuals.

Dr K Mohanan, former director of the National Institute of Rural Development Hyderabad, once told me that in every field of gainful human activity, the producers get paid less than the guys who market the product.
Same is true of news. Journalists continue to get paid less than those who sell papers and space. This probably is why senior journalists tend to set up their own companies where they sell what they produce in a way they want.

Media businessmen tend to believe that every product, however good, can not sell unless it is advertised, packaged and marketed well. This has led to increasing influence of the seller on the writer. In many media houses, the managers not only decide what should be written, but also when and how it should be written. This is based on the assumption that the managers know what people like to read. I call this a sophisticated prejudice. There has been no scientific study, at least in recent years as to what kind of content attracts readers.
When this trend continues, content loses its importance and marketing technique becomes paramount. This will cut both ways – media will lose its credibility and democracy will weaken for lack of informed debate. This is a result of corporatization.

However, media outlets owned by industrial houses that did not focus on truth telling and quality content, have famously failed.

Corporatization of media has also had another negative effect.

I live in Bidar, a small and backward district on the Karnataka –Andhra-Maharashtra border. It is 750 kilometres away from Bangalore. Bidar is among the poorest districts in the country with a per capita income equal to some sub Saharan countries.

In the 70s, the state government started a scheme to promote newspapers in the border. They give grants in the form of advertisements to these papers. This policy led to a proliferation of newspapers. In a small city of 2 lakh people, there are 30 news papers of whom 21 are listed and get regular ads. Among them are 12 papers that get more ads under the border development scheme. Now, with the onslaught of state level papers selling at Re 1 or Rs 1. 50, most small papers are closing down. Most of the papers owners are forced to find other means of livelihood now. My friend Khaji Alioddin says that he is among the few who are living only by bringing out a paper. He uses a Shayari to explain his plight ``Ya Main Pagal Hoon Ya Duniya Deewana ‘’

Access to the power structure
The second issue is where journalism is just a mask for people who do wrong things to gain access to the power structure, acceptability and credibility in society.

A few days ago, the vice president of India Hamid Ansari said and I quote`` today, the demands of professional journalists are carefully balanced with the interests of owners and stakeholders of media companies and their `cross media interests’. The interplay of these conflicting demands is evident and is a subject of public debate”.

The word that captures eyeballs here is `cross media interests’.

Before independence, media was a tool for freedom. Later, at least for some, media was a mission aimed at a better democracy. Most media houses did not do anything other than run papers.

Now, there have been so many examples of industrial houses opening up media platforms that they outnumber pure media companies. On the other hand, some media houses have turned entrepreneurs and invested in both old economy and new economy sectors.

Three years ago, a senior BJP leader described Karnataka as a laboratory for testing its ideology and governance in south India. It seems to me that Karnataka has become the laboratory for some non desirable activities and shady power play too.

Now, Three MPs and six ministers and some MLAs in Karnataka have either significant investment or managerial control over various media houses. During the inauguration of his TV channel, a minister said that he has been a winner all through his life. ``I have not lost even while plating marbles in school,’’ he said. Now -a -days he does nothing but play marbles. Full time. However, this time it is inside a jail. That is a different story.

Ok. People in power owing media houses by itself, may not be dangerous. However, a small example proves it may not be desirable all the time.

A few months ago, an article about a minister’s involvement in a land scam appeared in a daily paper. He was not affected in any way, but the reporter’s wife who worked for a media company run the by minister was sacked. Reporters have been routinely sacked or transferred under pressure from advertisers.

Several stories on illegal mining have either been scuttled or their impact reduced due to the influence of people in power who controlled media houses in some way. A member of the Supreme Court CEC committee remarked that there was surprisingly very little media exposure on the illegal mining in the state.

Business
Another issue is of industrial houses running media platforms.

Senior journalist H K Dua once remarked ``Big business houses own newspapers and TV channels which they have set up not for making profits but for developing a clout so that their equation with the governments and political parties could help them in expanding their business establishment’’. Is Dua saab explaining what the Vice President hinted?

Is that why you see the trend of industrial houses opening or acquiring media houses? Are some individuals and companies interested in gathering clout and not in service?

In short, news is a commodity and it is traded for a price. The idea of journalism being a service mission to help people develop informed opinion and strengthen democracy, seems to be fading.

Sometimes, media tends to unreasonably influence the society and the state. It happens at two levels, the company and the individual. Some media houses use their clout to influence politics, policy or instruments like the stock market. A former RBI governor remarked that TV anchors tend to speak in favour of companies that they own stocks of.

Paid news, featured articles, ad supplements are examples. Journalists going out of the way to create news and not just report about it, is another example. A very dangerous trend is when media persons overgrow their roles as neutral watchers and try to influence politics, policy and governance by acting as middle men, advisors and messengers.

Solutions:

1. The anomaly in newspaper economy should end and people should spend more on papers. (After all if news is a commodity, why should be remain immune from inflation?)
2. I was in the USA for a Rotary exchange programme and I saw people pay between 3-6 dollars per day for a copy.
3. Newspapers in Karnataka are the cheapest in south India. in Kerala, people buy two types of papers- Low cost and high cost. These are perceived as those of low quality and high quality. The local term for these papers is the bus stand paper and the one you get at your home.
4. Increase in the number of non-profit newspapers and TV channels. Cost of setting up a unit to print and supply a two page newspaper is around Rs 10 lakh. Recurring costs are around 3.5 lakh.
5. Low investment city TV stations, neighbourhood papers and community radio are examples.
6. Growth of new technology tools to spread news. Web portals, pod casts and electronic newspapers.
7. Creation of endowments, media fellowships and research scholarships for journalists and writers. This is a time tested method of focusing on subjects neglected by the mainstream media.


I will end with the story of Nancy. That was the pet name of a reporter whose name is Narayana Swamy. Nancy is the rock star of Kannada TV news.

He anchors a story called `Heegoo Unte’ which means ``is that possible?’’. He is so popular that there was a move to make him a hero in a Kannada film. The idea was dropped later for unspecified reasons.

He began the show when the first 24 -hours new channel opened in Kannada. Now, there are 7 news channels that produce thousands of hours of colourful programming. After six years though, his show has the highest television rating points.
Everyone who is involved in making the show knows that it is dishing out bundles of lies every day. But everyone is happy because it is making money. It makes money because people skip dinner to watch it.

The founding fathers of the Constitution said the quality of the elected depends on the quality of the elector. Similarly, the readers or viewers determine the quality of what they read or see.

I think that is the only true solution to this issue. This probably is the only case where my good friend Nancy will not be able to say ``Is That Possible?’’.

Thank you