Mediaah!: Will cross-media restrictions force Star, Zee & Sun to exit distribution?

By Pradyuman Maheshwari

 

There is no official word on it on the ministry website, but some journalists in Delhi were told about how the I&B secretary Uday Varma has written to newly appointed TRAI chairman Rahul Khullar to look into issues of cross-media ownership.

 

“Major players are looking for expanding their business interests in various segments of print and broadcasting sectors. In this scenario, issue of media ownership and the need for cross media restrictions assumes great significance,” Varma wrote in his letter to Khullar, according to a Press Trust of India (PTI) report on EconomicTimes.com

 

Adds the report: “Sources said that the I&B Ministry has asked TRAI to look into both horizontal and vertical aspects of cross media ownership, and then give its recommendations. In his letter, Varma has written that at present companies have control and ownership across Print, TV and Radio leading to horizontal integration. While at present there is no restriction for a company to have ownership across Radio, TV and Print mediums, but apprehension have been expressed in the past that control of media organisations in a few hands may prevent plurality of news and views, official sources said.”

 

According to the PTI report, in his letter, Varma is also have said to noted that there were other implications related to cross-media ownership which included ensuring quality services at reasonable prices. The I&B secretary is reported to have further asked TRAI to look into the issue of vertical cross-ownership where companies owning TV channels were venturing into various distribution platforms like Cable TV distribution, Direct to Home (DTH) and Internet Protocol Television (IPTV).

 

Hmmm. So this is why the headline: will cross-media restrictions force Star, Zee & Sun to exit distribution?

 

Now before going any further, and for the benefit of those not in the know, let’s understand what vertical and horizontal cross-ownership means.

 

Vertical would mean a media company that has ownership of, say, a TV channel also controlling a distribution (cable/direct-to-home/satellite/etc) company. And horizontal  cross-onwership would be a company that has interests in various media vehicles – newspaper, radio, TV, digital and even telecom!

 

Way back in 2009, TRAI had issued some recommendations which I had commented on. My belief then and now is that the government and TRAI seem to be ducking the more sensitive issue of horizontal integration – namely, a media company with interests in print, radio, television etc. The TRAI believed that there was no threat due to horizontal ownership, but vertical integration – for television was a problem. So, while it was okay for a newspaper or a magazine to have its own distribution facility, that’s not the case for television. But of course the circumstances for print and television are different. In the 2009 recommendations, TRAI felt that there should be a 20 per cent cap on ownership and existing players would get three years to restructure.

 

It’s been over three years already, and I guess that’s what has got the government moving its feet again.

 

Mediaah! view: I don’t really think there’s any need for the government to intervene as regulatory and legal actions are already in place. And competitive pressures of course. For instance, a DTH operator cannot blank out a rival network’s channels.

 

Mind you, the problem is graver with horizontal ownership. The PR executive of a radio station complained to me how she couldn’t ever get publicity in some key markets because rival stations were owned by newspapers. Thus even a minor activation gets a photograph and a report in the paper while that of a rival does not. Competition writes about you only if there’s something negative, she complained.

 

Similarly television marketers crib how channels owned by newspaper companies have it easy with advertising and editorial space. Thankfully, media buyers are discerning and don’t get taken in by claims – correct or otherwise.

 

The 2009 recommendations had also seen TRAI saying that limits on licences by a single entity were “adequate” and there is no restriction on control of ownership across telecom and media. Note this was to be reviewed after two years (that is, 2011), though the real changes in dynamics have happened since January 2012 given Reliance Industries and the Aditya Birla group getting involved, albeit indirectly.

 

My sense is that given recent developments, the TRAI will also look at the issues of mergers, acquisitions and alliances in a bigger way. What the government/TRAI needs to also do is ways to determine and factor in ‘benaami’ ownership. For instance, even if as a broadcaster I may not own over 20 per cent of another ‘vertical’ media entity, what prevents a family member/friend to do it?

 

It’s not an easy policy to work on, but am sure like various other complex issues it has tackled over the years, TRAI will come up with recommendations for this too.

 

Buzz me if you have a story to tell. Confidentiality assured. There are various ways you can reach me:

pradyumanm[at]mxmindia.com, BBM 23050B5D, Gtalk pradyumanm@gmail.com, Twitter @pmahesh and of course the mobile: 98338 76278.

 

Disclaimer: Although he is CEO and Editor-in-Chief of this site, Pradyuman Maheshwari’s views in Mediaah! are not necessarily those of the rest of the team and MxMIndia.com.

 

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  • Shankeshsingh

    what is cross media restriction?

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