By Simran Sabherwal
(Inputs from Abid Hasan and Saloni Dutta)
The Centre is currently busy collecting views of various stakeholders in connection with the issue of allowing 100% FDI in news media. We want to take the views of all stakeholders before we take a final decision if we should give a go-ahead for 100% FDI in news media. We are not in a hurry to go for it.” This statement was made by the media-savvy Union Information and Broadcasting Minister Prakash Javadekar at Goafest 2014. The news media industry may be cash-strapped, but is this what it wants? Is it feasible to allow foreign entities to control the way news is disseminated in our country? Presently, FDI is allowed up to 26% in news and current affairs media (as against 100% in non-news media like trade publications and entertainment channels). The industry demand of 49% FDI in news has still not been met.
In this context, we ask industry stakeholders what they make of the I&B Minister’s statement and what should be the ideal quantum of FDI in Indian news media. KVL Narayan Rao, Executive Vice-Chairman, NDTV Group, says that while it’s a good move on the part of the Ministry to consult all stakeholders about their views before taking any final decision, there should not be any paralysis. He says, “If certain decisions are good for the economy, then they should be implemented,” adding, “I think the FDI level in news media should be at 49%.” With news media playing a critical role in helping masses form an opinion, the general argument is that capping FDI at 49% ensures that the ownership remains in Indian control for a sector that is seen to be so sensitive.
Shailesh Shah, secretary general of the Indian Broadcasting Foundation (IBF), has been quoted in the media as saying that IBF is fine with bringing the FDI limit to 49% through the automatic route. This again reiterates the point that the industry is open to any move that would bring in funds while maintaining status quo on the control front. This stance has also been adopted by The Indian Newspaper Society (INS), which last year decided to support upping the FDI limit in Print media from 26% to 49%, stating that while internationally the Print media was de-growing, in India the medium is seeing significant growth.
However, INS also stated that the industry was in immediate need for capital to put in effect expansion plans. One of the dissenters to this was Malayala Manorama, which remained opposed to any hike in FDI. Jayant Mammen Mathew, Deputy Editor and Director, Malayala Manorama says, “Malayala Manorama is against upping the FDI in news. We don’t want any increase from the present 26%. For so many years, only a few have diluted to 26% and this shows that there is no scarcity of funds to expand. There are enough avenues of capital available for expansion in the market and getting FDI is not needed at all.”
This view is also corroborated by Girish Agarwal, Director, Dainik Bhaskar Group. “In our view, the maximum FDI in news media should not exceed 26%. Considering the fact that news media is very sensitive for the security and integrity of India, the control on news media companies must remain with Indians,” says Agarwal.
Alluding to the threat to local players, I Venkat, Director, Eenadu says, “FDI in news media should not be increased and should remain as it is. If FDI is increased in news media, the local channels will be at a disadvantage.”
While apprehensions of foreign content taking over, foreign interest prevailing on account of foreign ownership, bias in reportage and doubt in journalistic standards are well-founded, media experts point out that some of these concerns may not be valid. A media expert on condition of anonymity says, “The argument that foreign companies will have their own ulterior motive, hidden agenda and will be biased is far-fetched. If you have self-regulation, increase journalistic professional ethics and have norms to check that, regardless of who owns the media house, that apprehension will be taken care of. With no money or investment coming from within, the only option is to open the doors and let foreign money come in.” While foreign-majority control may not be looked at positively by the existing, well-established conglomerates and could create a temporary disturbance in the market place, on the other hand foreign players would force Indian players to formulate better policies besides increasing competition, forcing domestic players to improve their quality and content. The influx of funds could also mean better access to technology and help in building India’s image on the global platform due to increased dissemination of news from India.
However, Indian players are of the strong view that the control should remain in Indian hands. Says Mathew, “Let’s follow the 1950s Cabinet note about foreign ownership in news media and not dilute this. In fact, foreign-owned news websites operating in India should also adhere to this.” Adds Narayan Rao, “With 49% FDI, you can ensure that the largest shareholder, i.e, the one with 51%, is Indian. Your Editor-in-Chief is Indian and that 70% of the board of directors are Indian.”
Finally, even if the government is considering 100% FDI in news media as a matter of policy, the sensitive issues which crop up along with it have to be kept in mind. Walking on a tight rope, a clear balancing act has to be done to protect the interests of domestic news media players. Any negative aspects of foreign media ownership can be countered by having policies which encourage self-regulation and are looked at holistically, and not just from the point of view of ownership.
MAY THE BEST NEWS MEDIA COMPANIES WIN
By Ashish Pherwani, Partner, EY
News is captured. Sometimes, it is created or modified.
News is formated, curated and edited. Sometimes, it is edited a bit too much.
News is distributed. Sometimes, all news is not distributed; sometimes it is suppressed.
News is factual reporting. Sometimes, news is mixed with opinions and there is bias.
As a consumer of news, I want these basic issues to be addressed. I want the ability to know I have received the complete story – all sides – and no material news item has been kept from me. I want the ability to choose my point of view and to be correctly informed and want the complete truth. And, I want the news in a format customized to my specific needs.
As long as all news is completely captured, factually correct, and completely distributed, I wonder if it matters who owns the medium. We should aim to build in controls around these critical aspects and then let the world’s best news companies operate under that framework and bring us news.
However, FDI in news broadcasting comes with its own set of pros and cons.
Increased FDI limit will provide much needed financial support to the currently loss-making news industry (particularly broadcast news), apart from the other obvious advantages like growth, capital inflows, etc. Foreign players will also get in better technology and best practices which will benefit the Indian news industry.
On the other hand, increased FDI limits may result in loss of control over the editorial functions. In a diverse country – both geographically and culturally – as India, incorrect news, leaked out for even a short period of time, can create a serious disruption to everyday life. Similarly, a large population means a news item tilted in any direction can have a significant impact, as seen in the way social media has adopted news stories. Hence, loss of editorial control may create issues in such a country.
As an Indian, looking for the right news about my country and to protect India from any undesirable foreign influences, I believe there is a strong case to ensure that news remains in the hands of Indian companies. But with the advent and growth of digital media, I would like to reiterate – will FDI limits solve the real problem?
Girish Agarwal
Director, Dainik Bhaskar Group
“If 100% FDI is allowed, foreign companies will control the news dissemination to Indian public and would control what India should read and how India should behave. This could become dangerous to India.”
I Venkat
Director, Eenadu
“FDI in news media should not be increased and should remain as it is. If FDI is increased in news media, the local channels will be at a disadvantage.”
Jayant Mammen Mathew
Deputy Editor and Director, Malayala Manorama
“We need to protect our media from foreign influences and once the FDI cap is raised, control will pass from Indian hands. Recent examples in Britain show what can happen when media control rests with a foreign national. A vast majority of countries have restrictions on foreign ownership of news media for a reason.”
Bhaskar Das
Group CEO, Zee News Cluster
There cannot be a majority for a foreign entity in the Indian news media space. At best, holding should be 49% and Editor and CEO should be Indian.
KVL Narayan Rao
Executive Vice-Chairman, NDTV Group
News is a cash-strapped and cash-starved industry and we desperately need resources till the economy opens up. Until the time subscription revenues don’t come in, healthy investment is very good for the industry.
Feedback: simaran.sabherwal@exchange4media.com
