FDI tightening its grip over Indian media space

FDI tightening its grip over Indian media space
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First Published: Fri, Aug 08 2008. 12 25 AM IST

Updated: Fri, Aug 08 2008. 12 25 AM IST
Traditionally, journalists, especially editors, were the gatekeepers in media. They used to have the final say in content. In today’s market-driven media world, however, journalists no longer dictate priorities and direction. It is advertisers, market researchers and public relations people who dominate and determine the concerns and the content of mass media. It is these forces that have become the “new gatekeepers” of media — including the news media.
Given this context, the discussion on allowing foreign direct investment (FDI) in news media here takes a new angle (see “Should India let more foreign investment into news media?” in Mint, 1 July). Both the pros and cons of increasing FDI in news media are now well known. Those in favour have been using the high growth argument and claim that restrictive policies are retrograde in the era of convergence. Others have quoted laws of different countries that have similar restrictions specially on news media and say these are necessary to protect national interests, local cultures and diverse character of the media. The missing angle in this ongoing discussion on allowing FDI in news media is that the new gatekeepers of our media are already owned and also managed by foreign organizations.
As summarized in the table, 100% FDI is already allowed in advertising, market research, public relations, printing plants and even non-news television channels and technical journals. Total advertising spends in the country today are at least Rs12,000 crore with around 75% of this, maybe more, going to newspapers, television, films and radio. Advertising through newspapers and television today is mostly by multinationals and big corporate houses. In fact, the top 15 advertisers account for three-fourths of advertising revenue of newspapers and television channels. Today, over 13,000 brands in all are being promoted through television, newspapers, radio and films. The top five advertising agencies, mostly controlled by foreign networks that sometimes own all the equity in these firms, account for well over half of advertising business in the country. Entry of foreign advertising agencies has been going on along with simultaneous entry of foreign brands and increase in the share of foreign companies in the total advertising in the country.
In India, where newspapers are heavily subsidized — for instance, some papers are sold for Rs2 when just the ink and paper costs Rs8 per copy — the ability of these advertisers to become more powerful gatekeepers is higher than in most other countries that claim to have a free press.
With media becoming complex and also specialized, two “new” mediating functionaries have also emerged. Both these functionaries, “media planning” and “corporate public relations”, in a way, erode into core prerogatives of journalists and their “editorial control” as the function of corporate PR is to ensure coverage of a particular viewpoint. Market research agencies conduct “readership” surveys and “rating” of television viewership and, thus, directly influence advertising agencies as well as the news media as to their priorities. Most surveys being done in the country are mostly at the instance of advertisers or advertising agencies and the media operators themselves. Today, the top seven or eight market research agencies, accounting for at least 75% of research, are owned entirely or partly by foreign firms. With recent mergers and acquisitions, a certain monopolistic trend is already evident in this function with an annual turnover of well over Rs1,200 crore.
Together, advertising, market research and media planning set the scope for media. These functions are already in the hands of multinational firms.
While we still debate allowing foreign investment into our news media, “foreigners” have already entered our newsrooms through these new gates.
P.N. Vasanti is director of New Delhi-based multidisciplinary research organization, Centre for Media Studies. Your comments and feedback on this column, which runs every other Friday, are welcome at fineprint@livemint.com
Editor’s note: Mint has a Code of Conduct that lays down firm rules on separating advertising and editorial content. This code, which governs our newsroom, can be viewed at www.livemint.com
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First Published: Fri, Aug 08 2008. 12 25 AM IST