Prime time power play hogs the limelight (14 July 2003)
In the fortnight since this column first wrote about Star News corporate structure for its content providing company, Media Content & Communication Ltd, there have been several interesting developments. Kumar Mangalam Birla, who was to hold a 26 per cent stake in MCCL is understood to have opted out of the investment. Although, Birla’s possible exit has been on the grapevine for the last 10 days, there is no confirmation yet from him or from Star TV. However, Birla seems to have realised that a paltry and benign investment of Rs 1 crore, which gives him no power, could buy him loads of unnecessary controversy and hostility instead. Secondly, a clutch of Indian broadcasters (Aaj Tak, Eenadu, NDTV, Sahara, Sun TV and SABe TV) got together to demand a level playing field and to complain that ‘‘certain foreign broadcasters are bypassing the laid-down procedures and guidelines.’’
They charged the government with being a mute spectator to its guidelines being bypassed through ‘technicalities’. In fact, the government is an active participant, rather than a mute spectator. It has granted Star News its third one-week extension in order to get its structure in place, thereby deepening the suspicion that it is very supportive of media tycoon Rupert Murdoch getting access to every segment of the media business. From radio and TV entertainment, DTH access to news and current affairs—Star is everywhere. More importantly, it is gaining market share every day and that is a cause of further heartburn among Indian broadcasters, whose own ratings have slipped in comparison. The TAM data shows Star News, which is on a week-to-week life extension, has moved up a rung to second place in the news broadcasting business by grabbing viewers from market leader Aaj Tak as well as Zee News, which has dropped to third place. Moreover, the Star bouquet controls 65 per cent of all TV viewership and 50 per cent of ad revenue in a medium that is now the first choice of large advertisers.
This naturally alarms the local (swadeshi) broadcasters. They fear that Star’s deep pockets will allow it to buy the best talent and equipment and corner the largest chunk of viewer eyeballs. Over time, a powerful Star News is bound to capture enough advertising revenue to cause a shakeout in the television broadcasting business. Also, as the group of broadcasters complain, Star can repatriate this money abroad (Rs 500 crore in subscriptions and Rs 2,000 crore in advertising, they allege), ‘making television the only industry to be allowed to repatriate top-line revenue to foreign countries’. The further allege that foreign channels are not subject to the same taxes applicable to Indian channels.
A third factor is that the same elastic rules that permit Star TV’s entry into the closely-guarded news dissemination business, will also open the doors to other foreign publishers in the print medium. Murdoch already has a major global presence in the print media, and his biographers have documented how Murdoch and his media empire make no bones about influencing the politics of the countries in which they operate. This frightens the local print media barons who have fought hard to prevent foreign investment in the media and have their own cushy equations with political parties. If the Star News structure is legitimised, then Murdoch could use the same tested route to launch his global newspaper brands in India.
Or, it could open the doors to small Indian newspapers tying up with international newspaper groups shaking up the convenient geographical monopolies in the newspaper business. This fear has bonded several media groups together. In the past couple of weeks, they have questioned the government’s motives in clearing Star’s fiction of a majority Indian ownership in DTH, Radio and MCCS. The print media and desi broadcasters have openly begun to allege that government’s failure to implement the CAS is due to the pressure from foreign broadcasters’ lobby, whose plans for implementing a DTH system may have been jeopardised after the CAS rollout. Importantly, the increasing intensity of the campaign against Star News in the past two weeks is probably motivated by the fact that this government does not seem to want clear ground rules or independent, impartial regulation.
What else explains a situation where cable subscription tariffs become such a pressing national issue that the PMO and the Communications Minister, personally negotiate rates with broadcasters and cable service providers? Or, the fact that broadcasters force the government to eat humble pie and all but scuttle a fixed rollout plan? A government that was serious about CAS would have first put in place an independent regulator, with responsibility to ensure a fair rollout and providing a forum for consumers to file complaints against recalcitrant cable operators or service providers. But not having a regulator suits everybody, except the voiceless consumers. It helps politicians and ministers retain direct control over broadcasters and to influence programme content. Permitting a fuzzy equity structure, in what is nothing but a shell company lets the government to hold several strings that can be pulled if the channel steps out of line.
Television is not the first business where government has allowed such a strange ownership structure. At least here, Star TV’s involvement in MCCS is direct. There are large private groups operating in entertainment, airlines, hotels and the media who have access to a steady, but unknown source of funding and whose ownership is unclear. The only time this is ever questioned is when the occasional angry politician lashes out at perceived lapses in their service quality. Other than that, lack of competition and public disinterest lets these entities go unquestioned. But whether they like it or not, politicians will sooner or later have to face the issue of ownership, control and editorial influence, as Star pushes hard to dominate the Indian media. That’s because on this one occasion, its adversaries are equally powerful. It will be interesting to watch how this battle pans out. -- Sucheta Dalal