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Vanita Kohli-Khandekar: Murdoch, Potter and all things English

Two of currently most widely spoken names ensure that the UK remains in news

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Between them, and have ensured one thing — that the UK remains in the news.

The final film in the Harry Potter series, created by UK-based author and starring largely an English cast, released last week. Harry Potter and the Deathly Hallows: Part 2 is destined for a billion-dollar global box office gross, thanks to a great story. Ardent fans like yours truly were deeply disappointed by how much it strays from the plot. But any battle between good and evil always fascinates. And that is why the saga of the sordid goings-on unfolding at Mr Murdoch’s UK operations continues to dominate headlines the world over.

First, a brief background. Reporters at News of the World, a Sunday newspaper owned by News Corporation, the company Mr Murdoch owns partially and runs completely, were found to be hacking into private phone conversations in their quest for stories. In the ensuing hullabaloo, Mr Murdoch shut down the newspaper last week. He also withdrew a bid for a majority stake in British satellite broadcaster BSkyB. Rebekah Brooks, CEO of News Corp’s British publishing arm News International, resigned and was arrested on Sunday. Even as you are reading this, Mr Murdoch and son James are expected to appear before a parliamentary panel which is looking into the issue.

The $32.8 billion owns, among other brands, Fox TV, The Wall Street Journal, The Sun, Star TV and The Times. The 80-year-old Mr Murdoch is an Australian who became an American citizen in 1985. Both countries are already considering enquiring into the functioning of News Corp’s news brands. For now, the saga continues.

What does it all mean and what are the lessons for the $17 billion Indian media market?

Mr Murdoch has largely been a force of good for the Indian media business. In 1993, he invested $1 billion to buy the only satellite broadcasting into India and China. It took seven long years but Star TV, the News Corp subsidiary, did make it. Today, it is India’s third largest media company in terms of revenues, after the Times Group and Zee. It showcased the Indian media market to the world and that is how the next round of investment in this market happened. It also happens to be one of the most professionally run media companies in India, unlike many owner-driven ones. Senior people from Star are regularly poached upon.

In the news business, Mr Murdoch’s involvement has been contained to a 26 per cent stake in MCCS, the company that operates Star News, among other channels. That cap applies to all foreign investors in the news business. Kolkata-based ABP Group, the publishers of The Telegraph newspaper, is the majority owner in MCCS. News Corp doesn’t own any print media brands in India.

Mr Murdoch presents no danger to the already falling standards in Indian broadcast journalism. But the whole mess in England clearly shows that we need a media regulator that is “independent of the government” as the minimum requirement in this market. Note that the hacking mess happened in a market where there is an effective, independent media regulator (Ofcom), plenty of checks and balances, a polity and a well-functioning system. Yet, hundreds of phones were hacked for years without anyone’s knowledge. Imagine what horrors are waiting to be unearthed in a market where standards, especially in television news, are falling at a nauseating speed.

The second thing the Murdoch saga brings home is actually old wisdom. If you breed a monster, it will eventually harm you in some way à la the Taliban and Pakistan. If you choose to ignore, condone or even encourage bad business practices, they will eventually consume your business. It is much like termites. They may take years, but eventually they can bring the strongest building down. For example, most Indian media owners remain silent on the issue of selling editorial content even if only a handful of them do it. Many bow to pressure from advertisers and others pander to it. There are rate cards for selling editorial content. Many media companies are becoming financial investors in potential advertisers.

If any one of these things blows up in our face, it will harm every Indian media brand, whether it sells content or not.

vanitakohli@hotmail.com  

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