The broken business of news broadcasting
Whatdoesgautamadani’spartialtakeoverofndtvmeanfortelevisionnews?
Prannoy and Radhika Roy are the progenitors of private TV news in India. Earlier this week they resigned from RRPR, a holding company that owns 29 per cent of NDTV, the news network they founded. AMG Media Networks, a part of the $23-billion Adani Group, acquired RRPR, triggering an open offer for another 26 per cent. When it gets the remaining share, Chairman Gautam Adani, the world’s third-richest man, would own just over 55 per cent of one of India’s most trusted news broadcasters. If that happens, the Roys, who still own over 32 per cent and are executive co-chairpersons, are bound to leave. Since its inception, NDTV’S strength has been questioning the establishment on every side of the ideological divide. The Adani group has interests in power, ports, energy et al, all businesses that require it to work closely with governments. That simply wouldn’t sit well with the Roy-run NDTV. Ravish Kumar, one of the network’s star reporters, has already resigned.
Do these developments complete the “corporatisation” of Indian news television?
Network18, which operates 20 news channels such as CNBC-TV18 and News18, is promoted by the Independent Media Trust, of which the $99-billion Reliance Industries is the sole beneficiary. Its Chairman Mukesh Ambani is the world’s seventh richest man. Add the Adani- NDTV deal and it starts to look like a trend of news media going into the control of big business tycoons.
Many of the questions and worries swirling around this deal become irrelevant if you know three things. One, the insignificance of news broadcasting with its broken business model in the overall media picture. Two, corporatisation of news media is more than 100 years old. Three, any infusion of organised capital into the business of journalism is good news.
The news about news
At about ~3,000-4,000 crore in ad revenues, news is just about 5 per cent of the broadcast business. More than 400 channels fight for this largely stagnant amount. Not surprisingly, only a handful of broadcasters make money, that too sporadically. This doesn’t mean news is not popular. Hindi news, the largest segment gets 667 million viewers. That compares well with the 457 million people who access news on the internet and 421 million that read a newspaper. There is lot of duplication between the three media but TV news remains huge. “TV news is important as a reach and frequency builder,” said Shrikant Shenoy, associate vice president, Lodestar Universal. Ad rates on news, however, are 30 per cent less than say a general entertainment show. That explains the loud, screaming, theatrical anchors peddling misinformation and sensationalism to get eyeballs and therefore ad revenue, say analysts.
Many people point to online media, where India Today, NDTV or The Indian Express are among the most popular news destinations. True, but a bulk of the ~30,300 crore online advertising in 2021 went to Google and Meta. That leaves just a few thousand crore for dozens of newspapers, websites and TV. It is tempting to think of subscription as a possible solution given that entertainment OTTS have over 122 million subscribers. But there are barely a million subscribers to online news in India.
News, as a business, faces its biggest crisis ever, globally. To fight it needs investment in feet-on-the-ground journalism, tech tools like artificial intelligence among other things.
That is where point two comes in. For over a century news media brands have been created and owned by corporations. The Malayala Manorama, one of India’s largest selling dailies, was first printed in 1888. It survived skirmishes with the British because its founders owned a rubber factory and a bank, among other businesses. Ramnath Goenka’s other businesses helped finance The Indian Express. Ditto for The Times of India, which survived years of an unprofitable existence because of the family’s chemical and other interests. Just like IT, biotech or pharma, media companies are born when someone launches a firm to run it. The company or person may or may not own other businesses. There is, therefore, nothing intrinsically wrong with corporatisation.
That brings this to point three. More than half of India’s 400 news channels are owned by dodgy operators who use it for influence or extortion or simply for the glamour of being in news – much like the ones that came into film in the eighties. The coming of a bigger conglomerate, therefore, brings organised capital into play, much like the film in the early part of the millennium. That is not a cause for worry, say analysts. It is the intent of the corporate group that should be a concern.
The warrants that were converted into shares that finally gave Adani 29 per cent of NDTV were owned by Ambani from 2009. Senior managers within the company confirm that Ambani never interfered. So far, AMG has made all the right noises. In a recent interview with the Financial Times, Adani has talked about the acquisition being a “responsibility rather than a business opportunity.” In a press statement Sanjay Pugalia, CEO, AMG Media said “We look forward to strengthening NDTV’S leadership in news delivery.”
If that is the intent, good luck to them. If not, then this round of corporatisation will be another blow to the ever-declining plurality of Indian news media.