Media needs FDI to deliver

Presently the electronic news media in India faces a vast array of challenges, which are both financial and intellectual in nature. On the one hand, there has been a mushrooming growth in the number of electronic news media on other, the credibility and quality of news is deteriorating. Known as the conscience-keepers of the people at large and for serving as a link between the rulers and the ruled; electronic news media also acts as the fourth pillar of democracy. Loss of credibility of electronic news media would be detrimental to the growth of democratic polity, rule of law, equality, secularism and inclusive growth.

Regrettably, this sordid state of affairs afflicting electronic news media is attributable to its existing skewed business models which have made society bear the brunt. Resultantly, the society at large has started questioning electronic news media’s role and its relevance. Other concomitant outcomes of this scenario are discernible in the commodification of news content, sensationalism, paid news and in the growing diminution of ethical and journalistic standards. Being a capital-intensive enterprise, electronic news media requires lot of investment for the deployment of state-of-the-art technologies and new talents to deliver quality and credible news. News channels are largely unable to garner subscription revenues and thus depend mostly on advertising. The sector is losing money heavily and is subsidising these losses by an over-reliance on ad sales (20-22 minutes per hour devoted to ads for some channels). Slashing down of official advertisement tariff has further dried up revenue resources of the electronic news media. The resultant impact is discernible in the diminution in the quality of the viewer experience, which is further compromised by the increasing tendency of some Indian news channels to rely on sensationalism in order to grow viewer-ship and ad sales. A limited subscription fee also means that the world news coverage by local broadcasters is often inferior due to lack of resources.

Plurality of viewpoint is currently almost missing in electronic news media, since most news channels are ‘free to air’ and therefore driven by advertising revenues. Consequently, content of news channels are TRP-driven, which means more sensationalism less facts, almost no investigative journalism and irresponsible reporting. In other words, content on news channels have become commodified and biased. There is absence of any government policy to bail out the ailing electronic news media. Under these circumstances, raising the FDI cap from existing 26 per cent to 49 per cent seems to be the rational and viable solution to salvage the electronic news media from catastrophe. The artificial cap imposed by the  government for FDI on the electronic media in the era of internet and unprecedented growth of social media seems untenable for this sector’s survival. TRAI, the sectoral regulator, in 2008 recommended increased FDI from the present level. It dispelled all misgivings with regard to FDI in news channels by recommending ‘that the foreign investment limit for news and current affairs channels in the up linking guidelines may be increased from 26 per cent to 49 per cent’. The government however has not implemented the recommendation. In 2012, the I&B ministry’s sectoral innovation council headed by former I&B Secretary had also suggested that FDI limit for the print media be enhanced from the existing 26 per cent to 49 per cent.

At a time when other vital sectors of Indian economy namely Pharma, Banking, Power, Construction,
Telecom, etc are enjoying a very liberal FDI regime, then the question arises as to why the electronic news media is the only sector that has been kept immune from competition through FDI caps. This raises the apprehension of a deliberate move to protect the turf of home-grown media powerhouses. A low FDI cap of 26 percent now inhibits and dis-incentivises the infusion of foreign funding in the electronic news media resulting in perpetuating the monopoly power of Indian news conglomerates. Concomitantly, lack of competition in the news space has resulted in the stunted and skewed growth of news channels in India. Accordingly, Indian news channels are unable to invest in content creation, news gathering, and maintenance of bureaus at both national and international centres merely for want of adequate resources. Broadly speaking, a simple comparison between general entertainment channels – where 100 per cent FDI is allowed – with the state of affairs of electronic news media amply underlines the need for increased FDI regime for the electronic news space. FDI can enhance competition in electronic news with the introduction of best practices and act as the voice of the people, bring out diverse view point and thus strengthen India’s unity and diversity. As the fourth pillar of Indian democracy media can play a meaningful role. It will also lead to other benefits ranging from news syndication and editorial assistance to marketing and technological inputs leading to an improvement in overall product quality. The economy would be enriched given the rise in employment and income levels brought about by increased competition. The apprehensions of national security threats and public opinion being raised by vested interests on increasing FDI caps on news media are unfounded and misconceived and are already dismissed by the TRAI and the Planning Commission.

However while considering increased FDI norms for the electronic news media the government can build-in necessary checks and balances to prevent entry of undesired and anti-national elements to get into the news segment. Granting liberalised FDI regime in electronic news media is the dire need of the hour to salvage this sector. Such an initiative would transform the Indian broadcast industry into a world class industry and help India become the broadcast hub of the world.

The author is Executive Editor, ABP News

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