Lifting the media veil: Why TRAI, MIB are interested in media and cross-media ownership again

Last month, telecom regulator TRAI issued a new Consultation Paper (CP) on sensitive and contentious issues related to media and cross-media ownership. The paper invites comments by interested stakeholders by June 7, 2022. Including TRAI’s detailed recommendations of 2014, which were put in cold storage by the Ministry of Information and Broadcasting (MIB) for eight years, the new paper throws up fresh questions and issues for discussion. Both MIB and TRAI believe that the country’s media landscape has changed considerably in the recent past, largely due to the growing reach and expanse of digital technologies and digital media, including the popularity of OTT channels.

Ostensibly, the concept of 4Cs influenced the current desire of MIB and TRAI to look at media ownership issues. These include Clarity (on a few of TRAI’s 2014 recommendations); Complexity (how to simplify the earlier proposals); Continuity (in 2014, TRAI said that cross-media norms need to be reviewed after three years); and, Connectivity (more people ingest news and information through digital sources and platforms). There are social, business, and political factors that may explain the ministry and regulator’s urge to explore issues related to media concentration (dangers of monopolization). Lifting the media veil can encourage media diversity and pluralism, but “curb” the freedom of the press in unexpected ways.

Media ownership matters. It is true for every reader and viewer, who absorbs news and entertainment through various sources (TV, print, and digital) and myriad platforms (cable, DTH, OTT, Internet, and mobile). Experts contend that a growing number of sources and distribution channels are controlled by politicians, large corporate conglomerates, and even ideological and religious bodies. In fact, a few media owners have huge market shares in respective states and language markets (like Tamil, Bengali, and Hindi).

Hence, there are inherent dangers due to lack of media diversity, that is, paucity of different views and opinions, and unusual growth of media power through monopolies and oligopolies. Social media, and its algorithms, create a feedback loop that forces us into echo chambers. We see, hear and read about similar issues every hour, day and week. The situation is worse because many owners have cross-media presence, and are vertically and horizontally integrated. They manage newspapers, TV channels, cable networks and websites.

Given these reasons, it is inexplicable why TRAI’s comprehensive and detailed recommendations in 2014 on media and cross-media ownership were put in cold storage. It is equally baffling why the MIB nudged the telecom regulator now to initiate a fresh process to finalize a set of rules and norms for disclosures by media firms, and to put restrictions on market shares. Apart from practical and realistic considerations, politics, business and socio-economic issues may explain the urgent need to delve deep into the same issues again.

The business of clarity

In the 2014 report, TRAI said that TV and print need to follow its recommendations. It laid out disclosures on both ownership (equity stakes) and control (through loans, majority on board of directors, and veto powers) in media and cross-media segments. The proposals spelt out how to calculate market concentration and market shares in each horizontal and vertical segment. There were norms for dilution, if existing market shares of a few players were huge, and restrictions on expansion, if they breached certain threshold limits.

In its letter to initiate a new CP and further discussions, the MIB sought a clarification from TRAI on media segments. Does including TV imply both broadcasters (news channels) and distributors (cable, DTH and others)? The ministry added that if the disclosures and restrictions were only imposed on the former, the regulator has to define a specific formula to capture the channels’ market shares. Hence, there was ambiguity in the minds of the policy-makers.

The answer to the above question can make or wreck several existing and emerging media business models. In the recent past, Reliance Industries, owned by Mukesh Ambani, unsuccessfully tried to merge its sprawling broadcasting, cable and mobile interests. The Adani Group, owned by Gautam Adani, who recently displaced Mukesh Ambani as the richest Asian, has plans to gobble up media companies in print, broadcasting and TV distribution. The Sony-Zee merger will lead to increased vertical integration in the TV segment.

Another grey and “problematic” area in TRAI’s earlier report, which can disrupt media businesses, is whether “reach” and “circulation” can form the basis to measure monopolistic presence of newspaper and magazines. These two figures denote the number of individuals in a particular state or language market (like Telugu, Assamese or Punjabi) who buy a newspaper, which translates into the number of copies sold each day. This may not be the same as “volume” and readership, or the number of people who read a specific newspaper.

Clearly, in several states, community reading, economics and social behaviour impact reading habits. A single copy is read by, or read to, several others at panchayats, tea shops, barber shops and social gatherings (addas). If volume and readership is used to calculate market shares, select newspapers may emerge as monopolies or duopolies. They may face restrictions, and be forced to reduce market presence. This is less likely to happen if reach and circulation is used. Media firms have battled over reach and readership for decades. They have junked findings that understate the latter.

The politics of complexity

Broadly, TRAI had identified 12 geographic markets that were relevant for media ownership. These included 12 of the 22 languages “recognized in Eighth Schedule of the Constitution of India”, and 20 states. Hindi was the language in 10 states in the north, west, east and central India. English was a pan-Indian language. However, MIB had a problem that only one of the languages and states in the North-East – Assamese and Assam – was included in the geographic markets. The ministry wanted the regulator to review this gap.

National security, border sensitivity, and politics may have driven the MIB on this front. It is logical to assume that any government will wish to monitor both media ownership and content in sensitive and strife-driven areas across the country. At the same time, it is interesting to note that Kashmiri and Urdu don’t seem to be of any interest to either TRAI or MIB. The reason can be that the readership and viewership of Urdu publications, websites and TV channels are limited. Possibly, there aren’t enough media sources in Kashmiri.

HHI, or Herfindahl-Hirschman Index, was TRAI’s earlier basis to calculate the market presence of media companies across TV and print segments. In its 2022 CP, the regulator states that this is the “most widely used tool”. In 2014, it had recommended that “HHI be adopted to measure concentration in a media segment in a relevant (geographic) market as it considers the market shares of all the entities in the market, thereby reflecting diversity both in terms of number of sources present, as well as influence”.

But the MIB had issues with HHI. In its letter to TRAI, the ministry stated that the index “needs a relook as after examination, it was felt to be complex to be implemented”. In its current CP, the regulator maintains that “some scholars are shifting away from HHI”, and one of them feels that the index “only considers market power and does not make allowance for pluralism”. In political terms, this can reflect two scenarios – a simpler mechanism that will sacrifice diversity issues, and a more robust one that will focus more on pluralism.

The regulation of continuity

In the 2014 recommendations, TRAI said that cross-media ownership norms and disclosures “could be revised after three years of announcement of rules”. The MIB felt that since several years had elapsed, it was time to “reconsider” them. This was especially true because the media sector – news plus current affairs, and entertainment – had drastically changed. There was also an ongoing and roaring churn because of actual and possible entry of new players, series of mergers and acquisitions and rise of social media.

Cross-media ownership, as we understand it, is both complicated and can have an adverse impact on information. At present, there is a case to relax the rules due to the plethora of TV channels – broadcasting licenses doled out to 350 players – and digital and Internet-based sources. The diversity is inbuilt in such an ecosystem. At the same time, cross-media ownership needs to be monitored strictly if some players have huge presence across segments, both horizontally (print, TV and online) and vertically (broadcasting and distribution).

The socio-economics of connectivity

Eight years ago, TRAI wanted to monitor and regulate TV and print segments. The regulator wished to include the players in the news and current affairs area, and not in entertainment. Both these hypotheses and conclusions may be wrong due to the rise in Internet connectivity, digital sources, social media, and fast-speed broadband at cheap tariffs. People access news digitally, and readership of newspapers and viewership of TV channels has slithered. Even papers are read, and channels watched, digitally on laptops and mobiles.

There are infotainment options, like channels that are predominantly entertainment but have specific daily news slots. OTT channels offer documentaries and news-based web series, which analyse current affairs. Even the fictional content, especially on OTT, leads to controversies due to depiction of social communities. Social media encourages amplification, creation of self-sustaining echo chambers through algorithms, and fake and half-baked news. TRAI observes that there may be a case to include news and entertainment.

However, the major void in TRAI’s current CP is that it excludes a major distribution platform that we use for news and entertainment. Most, or bulk of, content enters our minds and hearts through the mobile. But, like in 2014, when the regulator excluded phones from its ambit, the 2022 CP too overlooks this sector. If digital and online has to be within the purview of media and cross-media ownership, as well as market concentration and market shares, mobile phones are the key dissemination and distribution tools.

This is especially true as some of the mobile players hope to expand into media sector, and media firms form partnerships with mobile service providers as well as giant technology and social media firms. In the end, if we get news and entertainment at the click of a button, media ownership disclosures have to be on our fingertips. Else, if partial information is available, and in a form or to an agency that is inaccessible to the public, one can do away with the exercise.