XXI

Indian Media at Seventy: Five Big Challenges

Nalin Mehta

Is there a connection between the long forgotten US battleship that blew up in the Havana Harbour in 1898 and the current state of the Indian media? You will be surprised!

When the U.S.S. Maine inexplicably blew up at the height of tensions between Washington and Spain, then masters of Cuba, the newly emerging American media barons, having just embarked on a contest for readership, saw a fantastic opportunity to capture paying readers by rallying them to the flag. The media in the US then was just as bloodthirsty as Indian TV networks are now. Enmeshed in a battle for supremacy with Joseph Pulitzer’s The World, William Randolph Hearst’s New York Journal immediately argued, without much proof, that a Spanish anti-ship mine had destroyed the Maine and its crew. Nothing quite matches a bout of self-righteous hysteria about the ‘enemy’ to draw in patriotic audiences. Hearst, who created America’s largest newspaper chain, understood this better than most. He had dispatched reporters to Cuba to write on alleged Spanish atrocities. When his reporter cabled back: ‘There is no war . . . request to be recalled,’ Hearst famously replied: ‘Please remain. You furnish the pictures, I’ll furnish the war.’¹ Most historians agree the months of holier-than-thou press jingoism that followed forced the US–Spanish War engulfing the Philippines, Puerto Rico, the Caribbean, Guam and Cuba. While the war ended Spanish colonialism, the American decision to start it was intrinsically rooted in the no-holds-barred journalism and battle for eyeballs that the newly minted media barons inaugurated.

Decades later, revisionist American naval historians concluded that the U.S.S. Maine probably sank from an internal explosion caused by the combustion of coal kept next to an ammunition magazine. Nonetheless, an aggressive media looking to capture readers with muscular nationalism combined with a suspicious explosion meant that such subtle explanations were easily ignored, with profound social, political and global consequences.

It is a story with useful pointers for those constantly puzzled about the bizarre loudness of much of India’s media—especially the over-the-top breathlessness of TV news channels, and ‘do aliens drink cow milk?’ kind of exclusives. Were Hearst to visit an Indian TV news station today, he probably would not be surprised at all by the deliberate desperateness of permanent outrage spouted daily in the hope that somehow, anyhow, the viewer would stay on for just those few extra seconds. There are remarkable parallels between the shape of the Indian media in 2017 and the US media a hundred years ago: in numbers, penetration rates and competition.

The Indian media’s current convulsions offer a paradox of Dickensian proportions:

For the Indian media, it is unquestionably the best of times and it is also, unfortunately, the worst of times . . . We have never had such a wide audience or readership but our credibility has never been so tested. We have never seen such a flowering of TV channels and such a spreading footprint of newspaper titles, but the market is more consolidated than ever around the top few players. The quality of what we offer to our public has never been better but that same public can see that the ethical foundations of our actions have plumbed new depths. The impact of the media on India’s public discourse has never been so instant and its reach so pervasive, but many ask whether that impact is for good or ill.²

The state of the media is inextricably intertwined with the larger story of India and it is important to frame it by answering four key questions: what does the Indian media industry actually look like? How does its trajectory compare with that of media in other liberal democratic countries? Where is it going? And why should the media matter to every Indian? As the republic completes seventy years, these questions frame the five big challenges facing India’s media industry:

World-famous, but Only in India

It is easy to get drunk with numbers about the Indian media industry. At a time when print newspaper circulations are rapidly shrinking in every major global media market, India, along with China, remains a global outlier for newspapers. It has the highest number of newspapers in circulation in the world;³ produces the largest number of films each year; boasts of the second largest number of TV viewers at 780 million⁴ and 476 million digital consumers. The numbers are not surprising, given our population.

However, it is striking that in global terms, India’s media is not that big an industry. It was worth about USD 19.6 billion in 2016 with an annual growth of 9 per cent, which is barely a quarter of Google (USD 89.5 in revenues in 2016), a nineteen-year-old company, younger than most of India’s TV channels.⁵ As Star TV chairman and CEO, Uday Shankar, has pointed out: ‘If the entire Indian media was a company, it would rank seventh or eighth in India. Media is a globally growing industry but our participation in that ecosystem is zero and India is hardly factored into the global thought process of technology or content.’⁶ Indeed, Hollywood or the global TV market is not keen on developing India-specific products, which is not the case for China, or the United States. This is because, in global terms, India’s media and the entertainment market are still not meaningful in monetary value. While this is slowly changing, India’s media industry is world-famous, but only in the country.

Media Has Converged but Still Bound by Licence-Permit Raj Legacies

It is increasingly irrelevant to talk about print or television or digital or telecom companies as separate businesses in a world of digital convergence. Yet, regulatory constraints ensure the business models and politics of individual Indian media sub-sectors are still circumscribed by legacies of the licence-permit raj.

India remains the only major liberal democracy where private radio channels cannot broadcast their own news. The government of India, between October–December 2016, finished phase 3 of the auction for radio frequencies nationwide, where 266 frequencies were offered in ninety-two cities.⁷ Yet, radio channels can only relay news that the All India Radio produces because of an old colonial straitjacket that saw radio news as being too volatile a medium to be allowed to go private.

In a country where retail prices of essential commodities are not controlled, and even diesel prices are being de-regulated, prices of TV channels (except HD channels) are regulated by the government. Until the eighties, the state didn’t really invest in television, arguing that broadcasting was a luxury of the affluent that could wait till grandiose plans for economic progress bore fruit. The explosion of private broadcasting in the last twenty years transformed its status in governmental eyes from a bourgeois luxury into a hoi polloi essential, whose prices needed to be controlled.

In an effort to ensure that television prices didn’t shoot through the roof, the Telecom Regulatory Authority of India (TRAI) ruled in 2006 that no individual pay channel could be priced at more than Rs 5.35 per month for consumers.⁸ At first glance, this appears a sensible and consumer-friendly policy, but it is one which, in reality, has seriously distorted the economics of Indian television. This is because good content costs money. The price ceiling disincentivizes investments as channels know they can’t recover costs from subscribers. Thus, channels only invest in programmes attracting advertising and remain hooked to the daily roulette of the ratings game with its vicious cycle of programming, appealing only to the lowest common denominator.

A network like HBO in the US is worth comparing. Emphasizing thoughtful, nuanced programming, HBO eschews advertising and is funded purely by the subscriptions of nearly 30 million customers. It has significantly fewer customers than its competitors, but due to secure and predictable income from the latter, it spends more on the quality of its programming. The first season of ‘Games of Thrones’ cost between USD 50–60 million to produce,⁹ which is more than the entire annual programming budget of most major Indian networks.

If prices were decontrolled, would watching television be unaffordable for most Indians? Absolutely not. In a country with the world’s largest terrestrial public broadcaster, this is a moot question. Doordarshan runs more than thirty free channels in two dozen different languages with a free DTH service. The state spends about Rs 3500 crores annually on public broadcasting services.¹⁰ This is excluding channels run and financed separately by the Indian Parliament—Lok Sabha TV and Rajya Sabha TV. For high-cost programming like cricket, there is already a law in place to ensure that all private channels share their broadcasts free of cost with Doordarshan in the national interest.

The price cap actually distorts the market, artificially controlling ebbs and flows rather than protecting the viewer. It is a legacy of the fact that unlike print, which was already a vibrant industry in 1947, TV and radio were controlled by the state until the early nineties. TV came to India by accident in 1959, when the electronic giant Phillips left behind some television equipment as a gift after an exhibition in Delhi. India had only sixty-seven TV sets when Nehru died in 1964 and TV became a mass medium only in the eighties before the satellite boom of the nineties brought down the state monopoly on broadcasting.

Table 4: Estimated TV Sets in India: 1964–2016

Year	TV Sets in India
1964	67
1979	6,00,000
1982	20,00,000
1992	34,800,000
2000	84,000,000
2012	148,000,000
2016	183,000,000

Source: Nalin Mehta, India on Television: How Satellite News Channels Changed the Way We Think and Act. (New Delhi: HarperCollins, 2008), p. 43; Nalin Mehta, Behind a Billion Screens: What Television Tells Us About Modern India (New Delhi: HarperCollins, 2014), and BARC, 2017.

India today is the world’s second largest TV market after China. While forces of globalization and liberalization since the 1991 economic reforms have changed the contours of the media industry, control mindset continues to bind the sector in subtle ways.

No Curbs on Political Ownership

India remains the only major liberal democracy where politicians and political parties can own traditional media platforms. For example, major investments in news television since the early-2000s have been from politicians, real estate, chit fund and money market companies and large corporations. This pervasive trend has led to these categories of owners having deep stakes in the majority of the news TV business in most Indian states. Such companies make up over 80 per cent of the news TV business in Andhra Pradesh, Karnataka and Odisha, between 60 and 70 per cent in Punjab, Maharashtra, West Bengal, Tamil Nadu and the northeast.¹¹ A decade ago, only a handful of states like Tamil Nadu had channels like Sun TV or Jaya TV, set up as propaganda arms of rival political parties. Now, this is the norm across India.

Politicians have as much of a right to free speech as everyone else and, in theory at least, each propaganda voice should cancel each other out. The trouble is twofold. First, it completely loads the democratic field in favour of political players with access to big under-the-table funding and crowds out less wealthy players. Second, the easy money that politicians bring into the game completely distorts the market, driving out all serious, neutral players.

One of the most under-analysed ways through which politicians control the news is by controlling cable operators. States like Chhattisgarh and Punjab have evolved their own models, where television is controlled by political parties through private TV networks, as well as cartelization of the cable industry. The practice of politicians buying into the TV business is a slippery slope. Several news channels have become conduits for black money and ill-gotten wealth. They also provide unfair advantage to their political owners and diminish the public space.

There are umpteen recommendations by the TRAI that warn against fixing the field in favour of politicians with the money to splurge; fair access in the political arena; unfair uses of state power and on grounds of equity—most recently in April 2014.¹² Several other countries already have such laws in place mandating strict limits against political ownership of commercial media outlets. India must follow suit.

Regulatory Twilight Zone

Information and Broadcasting ministers of recent years have suggested abolition of their ministry.¹³ Notwithstanding political differences and ultimate intent, these comments by successive ministers point to the nature of the ongoing debate over the role of the state in sectors opened up after liberalization; the deep regulatory crisis affecting many of these; and the implications for governance.

In the early-nineties when first faced with the challenge of independent private television, the guardians of the state initially buried their heads in the sand, and then, in time-honoured fashion, blamed the proverbial foreign hand. The developments were described by an erstwhile I&B minister as ‘diabolical invasion from the sky’,¹⁴ while another wondered ‘Are we going to succumb as we did 250 years ago to gunpowder’.¹⁵ Different arms of the government took different views—some for opening up, some against—and then, as with most things that politicians are unable to decide on in India, the Supreme Court came to the rescue, liberating airwaves from government control, giving legal sanctity to a private TV revolution and asking the Centre to create a new autonomous public authority to control and regulate the new reality. That was in 1995. Over two decades later, India is still waiting for such a law.

Members of Parliament did unite thrice—in 1995, 2002 and 2011—to pass or amend laws to govern specific aspects of the industry, on distribution and cable operators. They also united, expectedly, on a life-and-death matter: the right of the Indian people to watch cricket. A law was passed to ensure that Doordarshan could, in the ‘national interest’, telecast every international cricket game played in India without paying a single paisa for it. Yet, every attempt to create a new law encompassing the wider superstructure of the new reality of Indian television has failed (Table 5). Almost every I&B minister since 1995 has tried to put the genie of private TV back into the bottle. Every minister has stumbled.

Table 5: No Overarching Law—The Fate of Regulation

Source: Adapted from Nalin Mehta, India on Television: How Satellite News Channels Changed the Ways We Think and Act. New Delhi: HarperCollins, 2008, p. 120.

Each time a minister sought to bring in a big-picture law to regulate the new broadcasting realities in their entirety, their impulses were draconian, threatening to severely clip freedoms private networks had so assiduously carved for themselves. The last such draft of a law in 2007, for example, would have made it illegal for private channels to do live interviews with anyone in India without prior permission from a bureaucrat.

The incomplete transition of the controlling superstructure has translated into wide areas of legal uncertainty on broadcasting. It has meant severe infighting for control between overlapping arms of the state, resistance by new economic actors and the judiciary and the state governments taking on interventionist roles as arbiters in periodic crises over broadcasting. In practice, this has meant low predictability on the goalposts of the playing-field. It translated into governance by administrative notifications based on the whims and fancies of incumbent bureaucrats in control and an even larger role for the courts. Almost every order is legally disputed and quite often reversed or modified by the courts.

In all major liberal democracies, a single regulator runs all aspects of broadcasting. In India, the problem has been that even though TRAI was to create a level playing field for the new economy, the information and broadcasting ministry, which was the custodian of television in the days of socialist monopoly, never fully transferred its ownership. The old one remained with the new regulator, building tensions in the system and ensuring they remained in the fight for control. As a former TRAI chairman points out:

The regulator there [in other countries] is in a way a single regulator . . . In India there have always been two regulators: one is the department and ministry and the other is TRAI because some functions are still with the Ministry of Information and Broadcasting and Department of Telecom. After all, DoT issues licences and manages spectrum, the Information and Broadcasting Ministry is responsible for the issue of licence of the DTH . . .

We had a regulator earlier, which was regulating monopoly, then you got a new regulator to create a level playing field but the original regulator remained. So the ownership never got fully transferred. The endowment was not made, ownership was not transferred. So there is always a limited role for TRAI when compared to the FCC [in the USA] or [the UK’s] OfCom.¹⁶

In the overlapping haze of regulation that is broadcasting, as many as ten different government institutions are legally empowered to issue directions on broadcasting: the I&B ministry as policymaker and final arbiter of content oversight, TRAI as a regulator of technical issues like carriage and pricing, the Telecom Disputes Settlement and Appellate Tribunal for appeals against decisions, the Ministry of Communications for licencing, transmission equipment, satellites, Internet protocol TV, and district-level committees that can monitor and censor ‘certain programmes in the national interest’.¹⁷

Even the humble neighbourhood post office is involved in the regulations. All that is required to start a cable network is to fill a hundred-rupee form and register at a post office. There is no centralized system to track licenced cable operators and post offices are not even mandated to keep any record of renewals.

How many got renewed, how many did not get renewed. No one knows. So you have a huge chunk of cable operators spread all over in the districts . . . also having a lot of political local interest for their business expansion. Most of them had some kind of an invisible hand who was taking care of all sorts of activities with muscle power.¹⁸

Digital Will Drive Media but Its Business Model Is Still Emerging

With the number of Internet-enabled mobile phones crossing 300 million in India, data costs spiralling downward after the entry of Reliance Jio, and the ubiquity of personal devices, everyone agrees that the future of the Indian media lies in the mobile and digital space.

The 2017 IPL auction for five-year broadcast and digital rights for 2018–22, which was won by Star India at a whopping Rs 16,347.5 crore (Rs 54 crore per match), illustrated how the media game is changing. ‘For the first time in this country we are seeing a phenomenon where—for a media property—media, telecom and global technology and social media companies were bidding. A few other global e-commerce companies also examined it very closely. The competition was so diverse that it is anybody’s guess at what prices these things will go.’

In 2014, Hotstar bought IPL digital rights for roughly Rs 300 crore. In 2017, for five-year digital rights, Facebook was willing to pay Rs 3,900 crore. ‘Look at the multiples of growth. These companies have very different ways of looking at the commercial value of rights. It’s a totally different mix now. The media is being buffeted by different forces.’¹⁹

While the future is mobile and bandwidth may be the new oil, the challenge is that viable business models are still emerging. Technology and social change has disrupted the old media. Yet, it is still an open question on how to make good money sustainably from the new media.

What companies from e-commerce to media are doing currently is to invest essentially for the long run, by throwing money to build audiences in the hope that one day these communities will be monetized. Even as the new media has created a personal revolution of sorts where everybody can now be a content creator, it has also created an uncertain landscape, where aggregators and platforms like Google and Facebook are positioned to have the bulk of revenues. Ultimately, profitability is crucial for making sustainable good content and as India’s media companies change shape to digital-first models, the big question they all face is simple: how to make money from digital? How they answer it will reshape our information landscapes for the next decade.