Do we really need rules to control cross-media ownership?

11 Jul,2022

 

 

 

By Indrani Sen

 

Indrani SenAlmost four months back on March 12, 2022, TRAI released consultation papers on media ownership, particularly related to cross-media ownership in India. This is not the first time that TRAI has raised the issue. However, after a comment made by the I&B Ministry, all the industry media bodies and associations have responded indicating unequivocally that there is enough plurality in the ownership of media in the Indian market and there is no need to be concerned about making regulations related to cross-media ownership.

 

The western world has been grappling with the advantages and disadvantages of cross-media ownership over the last few decades. The seeds of cross-media ownership were probably sown during the post second world years during the 1950s when the American policy-makers had realised that control of world media can help to make America a superpower and encouraged transnational expansion of US media.  Since the 1980s, the business practices as well as the economic environment in the world began to change dramatically across industries with companies either merging or taking over other companies operating in the similar field and media industries also followed suit. However, American domestic media saw a dramatic change in cross-media ownership as the media ownership pattern changed dramatically due to mergers and take overs.

 

“In the United States as of 1985, 90 per cent of all media companies were owned by 50 different companies. Through acquisitions of smaller companies by larger ones, 90 percent of media companies are now concentrated under the ownership of just five corporations: Comcast, Time Warner, The Walt Disney Company, News Corp and National Amusements.” (Source: https://www.lawyersnjurists.com/article/effect-of-cross-media-ownership/)

 

In India, though the owners of Times of India, India Today, Hindustan Times, as well as some regional print media owners have cross-media ownerships, the magnitude of their holdings are far away from reaching any alarming stage or creating an environment of controlled messages influencing public opinions. In recent years cross-media holdings in India have created a free and competitive environment. The advocates for freedom of speech need not worry about control of public opinion due to cross-ownership ownership in India, particularly when under the present Government we seem to have indirect controls over the content of news media. The media associations’ claim that the plurality in media ownership is absolutely correct.

 

If we examine the advantages and the disadvantages of cross-media ownership, then we find that the advantages probably out weigh the disadvantages in a country like India where media penetrations across traditional as well as new media have still huge scope of growth. The biggest advantage of cross media ownership is reduced cost which allows the media owner either to pass on the benefit to the consumers or to invest in further expansion of their media business and in the process if they also increase their profitability that should be excused as a normal part of doing any business. The creation of synergy is another important advantage of cross media ownership resulting in better products at reduced costs. The expansion of distribution network is another huge advantage along with increase in business security. As far disadvantages are concerned, the misuse of media power, the concern that one particular voice may become too powerful if distributed through different media vehicles across different media segments appears to be the main issue against cross media ownership.

 

The four industry bodies, the IBDF, NBDA, INS, and AROI, representing TV broadcasting, print media, and FM radio companies, have strongly made the following points:

1. There is no need for controlling cross-media ownership as there is enough plurality of ownership in Indian M&E market.

2. There is no requirement for a common mechanism to monitor ownership of print, television, radio, or other Internet-based news media as already different mechanisms exist in different media sectors for monitoring editorial content, etc.

 

While teaching the subject Economics of Media Business, I give examples of various vertical, horizontal and diagonal integrations done by different media houses in India. The proposed restraint on cross-media holdings will result in imposing control on the normal business activities in the media industry and discriminate against them in comparison with other industries are allowed do all three types of integrations. Such constraints would also violate the constitutional rights of the media houses from transmitting information and would hamper the constitutional rights of citizens to receive information under Article 19(1)(a).

 

Finally, as the telecom companies have now become the biggest distributor of news and consumers are creating their own news/ circulating fake news on social media portals using the facilities offered by the telecom companies, it is fair to have a parity between the current rules and regulations governing media industry and the telecom industry and the TRAI should review the same before imposing new controls on traditional and digital media industries.

 

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