FICCI Frames: Cross media ownership may be restricted soon

By Sapna Nair , afaqs!, Mumbai | In Media | February 20, 2009
The Information & Broadcasting industry is looking at ways to curb the monopoly that exists in certain sections of the media and bring about a set of governing laws

India is a free media market, where presence in more than one media is not restricted. Media giants such as the Bennett Coleman and Company, for instance, have presence across print, television, radio, internet and other services. Essel Group has, over the years, diversified into television, print, DTH, real estate and sports.

Does this lead to a monopolistic scenario, where power is in the hands of a few mighty barons? The session on cross-media ownership on the third day of the FICCI Frames answered this and more.

N Parameswaran, principal advisor, TRAI (Telecom Regulatory Authority of India), said that the case of cross-media ownership has been a subject of government review and debate in all developed countries. It emerges out of factors such as consolidation, competition, plurality and concentration of power in the hands of a few. Having a policy or guide in place will preserve a level playing field and bar companies from making a conglomerate, which could hamper the entry of other players.

He stated some of the issues under cross-media ownership: cross-media control, which is about presence across media; limit of licenses, such as what exists in the FM radio sector; and vertical integration between broadcast and distribution.

Today, there exist 300 television channels, and 100 others waiting for a nod from the Ministry of Information and Broadcasting; 8,600 newspapers and 250 FM stations. In this scenario, the government feels the need to put certain restrictions on the Indian media sector. "The I&B Ministry has made a reference of this to the TRAI, with the objective of rationalizing this issue. We are formulating a recommendation and will present it to the government," Parameswaran said.

Shantonu Aditya, executive director, UTV Global Broadcasting -- which has four television channels and a strong film production arm -- believes that there is no reason for regulation and that variety is good. "A consumer is not bothered by which media company produces what newspaper or launches what channel. The consumer seeks variety entertainment," he stated.

As a medium, television, he said, was the most sensitive to consumer tastes, because loyalty towards a channel can be changed at the press of a button. "Diversity does not imply assimilation of power in the hands of one or two entities," he added.

He was of the opinion that if a market is competitive, it will automatically generate the best of opportunity for the players and products for the consumer.

Moreover, he said that a vast amount of information is consumed on the Internet. "There's not much point looking at restricting the number of television channels, radio stations or print publications, because the booming source of entertainment, the Internet, is difficult to control," he stated.

To keep competition in check, there are laws such as the Competition Act, which will restrict the misuse of dominance of a certain player. "It is best to leave it at that, rather than bringing in regulation," he added.

His bone of contention was the poor infrastructure that plagues the industry. While there is free-flowing content, the mode of delivery is challenged. A monopoly exists there, which does not allow the consumer to get better viewing at a lower price. "The reason why CAS didn't pick up was because the consumers weren't willing to pay more for what they get," he reasoned.

Giving a perspective on the US market, Monica Desai, chief, media bureau, Federal Communications Commission, USA, said that strict legislation exists in this regard. "The FCC sets the rules on how many media outlets a single entity can have. This is reviewed every four years," she said.

She added that for the past three decades, the rules were very stringent, but were relaxed in December 2007.

"In 1975, the FCC banned cross-media ownership for players operating in the same local market. In 2007, however, we evaluated the pros and cons and decided on a few combinations, depending on whether it is favourable or not," she said.

So, in the top 20 markets, the FCC allows a combination of newspapers and radio, which is in the interest of the public. Even within television, the FCC restricts national television ownership, not in terms of number of channels that can be launched, but the reach of the channels, which should not exceed 39 per cent of reach in TV households.

Aditya, in the end, requested Parameswaran to consider the fact that the consumers are used to what they see and read and that the restriction must not hamper this. "What needs to be taken into account is that regulation in media will be put in after its decade-long existence, whereas in other sectors such as telecom, it was there right from the start," he added.

© 2009 afaqs!