Vanita Kohli-Khandekar: Good media is also profitable

MEDIA SCOPE

The growth of the Indian news business has been fantastic. It finally means that more and more Indians are getting involved in the debate on its present and future. We are jabbering across 60,000 newspapers, 67 news channels (arguably the largest such number in the world), thousands of websites and 1.2 million blogs. This competition has forced newspapers, that were local monopolies, to become more responsive. From farmer suicides to the Priyadarshini Mattoo case, the news media has forced those in authority to action. These are some of the obvious things I discovered while doing a survey on The Future of News recently.

What is not-so-obvious is that after entertainment, news is the biggest genre of content in India — in revenues, audience and the investment it attracts. Across media (print, TV and Internet) and languages, news as a genre got Rs 16,400-odd crore while entertainment got Rs 25,500 crore from both pay and advertising revenue. For an industry that was freed up in the real sense only after 2003 (when foreign investment norms in news TV were made clear) and then in 2005 (when foreign institutional investment was allowed in newspapers), this is a great place to be in.

However a free news market, that is almost completely dependent on advertising, has brought some pressures too. That of advertisers who want the largest possible ratings, readers or page views and that of investors who want returns quickly. This manifests itself in several ways. The two most obvious ones are tabloidisation and the selling of editorial or programming.

Of these, tabloidisation is inevitable in the evolution of the business from its controlled past to a freedom where capital and technology are not constraints. About 15 years back, newspapers were about ribbon cutting, foreign-dignitary visiting kind of headline news. Now they are about what is current, relevant and of interest to you and me. They have become more accessible. You could argue that accessibility is degenerating to sleaze when it comes to news channels. Maybe it is. There is talk of regulation, so the sleaze part will get fixed. The texture of the tabloidisation could change but it is here to stay. The fact is there is a market for The Sun and The Guardian or The Economist and Hello.

It is the second change that makes little sense. Many advertisers talk openly about what they pay to get their company featured on a TV show, a newspaper or magazine. Most, usually expect ‘editorial support,’ from the media they advertise in. Since large, profitable media companies offer such support, smaller ones crumble.

There are both moral and business implications to this. Since the moral ones are usually discussed all the time, let us stick to the business issues. As readers or viewers, the way we think, live, work, the choices we make are influenced greatly by our media consumption. If readers stop trusting a news brand they will stop using it, advertisers will leave, rates will fall and eventually so would valuation. That is what it would seem like, unless the whole premise of selling editorial is based on the fact that readers don’t know and even if they did, they don’t care.

Media managers argue that a newspaper or news channel is just like lipstick or soap, so in the race for revenues, editorial is fair game. Take that analogy further. If Hindustan Unilever puts spurious stuff in its soaps because it could cut costs and increase profits, would that be sensible? What media companies manufacture is content. The rest of it is packaging and marketing. If the content rocks, the business rocks. Some of the best news brands in the world are the most credible ones. Think The New York Times, BBC, Washington Post and so on.

There is no conflict of interest between having a good, credible media brand and a profitable one. It is a conflict that Indian companies have created in response to their pressures. If some of the world’s largest, most profitable media companies don’t need to do it, I see no reason why Indian companies should. If you can convince me otherwise, write in.

The author is a media consultant and author of The Indian Media Business. She can be reached at vanitakohli@hotmail.com