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Last month, control of Raghav Bahl's Rs 2,692-
crore Network18 was passed on totally to the
Independent Media Trust (IMT ). It is controlled
by the Rs 401,302-crore Reliance Industries
(RIL ), which Mukesh Ambani heads. In 2012,
IMT funded the merger of a debt-ridden
Network18 and Ramoji Rao's Ushodaya
Enterprises, which owns ETV. Since then, the
speculation on a takeover by Reliance and its
ramifications has been endless.
There are two dimensions to the affair - the
corporate ownership of media and the
ownership of media by RIL.
For more than a hundred years, media
companies have been started and owned by
corporates, in the US, Europe and in India as
well. Malayala Manorama, The Indian Express,
Hindustan Times, The Times of India , Zee TV,
among dozens of others, have come from
business groups. Anyone can set up, own and
run a media company in a democracy and
India's record so far has been wonderful.
Maybe too much so with thousands of
newspapers and 135 news channels. In spite of
everything wrong with the news media, we
should continue with an open-door policy for
it. From a regulatory and philosophical
standpoint then, Ambani has as much right as
anyone else to own a media firm.
Then there is the question of the editorial
compromises, the advertising deals, paid news,
the ethical rot and all the ugly stuff. Before we
get to that, a few footnotes to set the context.
One, TV news is a tiny (just about two per
cent) but critical part of the Rs 83,000-crore
"media and entertainment" industry. There is
much speculation about Ambani owning news
channels such as CNN-IBN. But he also owns
half of Colors, one of the most popular
entertainment channels in India, that reaches
more people than all of Network18's news
channels put together. The regulatory
environment for entertainment needs to
remain free - 100 per cent foreign direct
investment is allowed against only 26 per cent
in news.
Two, news is one of the most expensive,
unprofitable and difficult businesses to be in.
Globally, it makes money only when it is
bundled with entertainment or if it is funded
by trusts (The Guardian ), taxpayers (BBC) or
benevolent rulers (Al Jazeera). It would be
surprising if Ambani manages to make any
large sums of money from the news channels
and portals in Network18.
This then brings us to the ugly stuff.
The reason we have so much news in India is
because politicians, real-estate barons,
businessmen and even religious gurus launch
newspapers, TV channels and online portals as
a lever to curry favour, fear or influence
public opinion. You could argue that the man
who runs an empire the size of RIL does not
really need media to influence anything. RIL is
almost 150 times the size of Network18 and
got there almost entirely without owning
media. Why then did Ambani bother with it?
The general consensus in the telecom business
is that he will use the content from Network18
to feed his firm's 4G network due to be
launched next year.
This brings us to the other dimension - the
objection to Ambani owning a news channel.
The Aditya Birla Group's 27.5 per cent stake in
Aroon Purie's India Today Group or the Tatas'
60 per cent stake in Tata-Sky has not created
as much discussion. The worry, rightly, is on
Reliance's sheer size and the span of its heavily
policy-dependent portfolio - petroleum, gas,
retail - and the potential conflict of interest
this could create.
The other worry, especially from liberals and
moderates who dominate English media, is the
stance his news outlets will or will not take.
That seems unjustified since most media
brands have a stance. There are pro-Congress
newspapers and pro-BJP ones, just like there
are Left-liberal ones. Almost all democracies
have a mix of voices. When Fox News and CNN,
which swing right, were on a rise, BBC took off
in the US and brought balance. That is why an
open-minded entry policy helps and India has
that. Vanita Kohli-Khandekar: The Reliance-Network18 affair | Business Standard Opinion
crore Network18 was passed on totally to the
Independent Media Trust (IMT ). It is controlled
by the Rs 401,302-crore Reliance Industries
(RIL ), which Mukesh Ambani heads. In 2012,
IMT funded the merger of a debt-ridden
Network18 and Ramoji Rao's Ushodaya
Enterprises, which owns ETV. Since then, the
speculation on a takeover by Reliance and its
ramifications has been endless.
There are two dimensions to the affair - the
corporate ownership of media and the
ownership of media by RIL.
For more than a hundred years, media
companies have been started and owned by
corporates, in the US, Europe and in India as
well. Malayala Manorama, The Indian Express,
Hindustan Times, The Times of India , Zee TV,
among dozens of others, have come from
business groups. Anyone can set up, own and
run a media company in a democracy and
India's record so far has been wonderful.
Maybe too much so with thousands of
newspapers and 135 news channels. In spite of
everything wrong with the news media, we
should continue with an open-door policy for
it. From a regulatory and philosophical
standpoint then, Ambani has as much right as
anyone else to own a media firm.
Then there is the question of the editorial
compromises, the advertising deals, paid news,
the ethical rot and all the ugly stuff. Before we
get to that, a few footnotes to set the context.
One, TV news is a tiny (just about two per
cent) but critical part of the Rs 83,000-crore
"media and entertainment" industry. There is
much speculation about Ambani owning news
channels such as CNN-IBN. But he also owns
half of Colors, one of the most popular
entertainment channels in India, that reaches
more people than all of Network18's news
channels put together. The regulatory
environment for entertainment needs to
remain free - 100 per cent foreign direct
investment is allowed against only 26 per cent
in news.
Two, news is one of the most expensive,
unprofitable and difficult businesses to be in.
Globally, it makes money only when it is
bundled with entertainment or if it is funded
by trusts (The Guardian ), taxpayers (BBC) or
benevolent rulers (Al Jazeera). It would be
surprising if Ambani manages to make any
large sums of money from the news channels
and portals in Network18.
This then brings us to the ugly stuff.
The reason we have so much news in India is
because politicians, real-estate barons,
businessmen and even religious gurus launch
newspapers, TV channels and online portals as
a lever to curry favour, fear or influence
public opinion. You could argue that the man
who runs an empire the size of RIL does not
really need media to influence anything. RIL is
almost 150 times the size of Network18 and
got there almost entirely without owning
media. Why then did Ambani bother with it?
The general consensus in the telecom business
is that he will use the content from Network18
to feed his firm's 4G network due to be
launched next year.
This brings us to the other dimension - the
objection to Ambani owning a news channel.
The Aditya Birla Group's 27.5 per cent stake in
Aroon Purie's India Today Group or the Tatas'
60 per cent stake in Tata-Sky has not created
as much discussion. The worry, rightly, is on
Reliance's sheer size and the span of its heavily
policy-dependent portfolio - petroleum, gas,
retail - and the potential conflict of interest
this could create.
The other worry, especially from liberals and
moderates who dominate English media, is the
stance his news outlets will or will not take.
That seems unjustified since most media
brands have a stance. There are pro-Congress
newspapers and pro-BJP ones, just like there
are Left-liberal ones. Almost all democracies
have a mix of voices. When Fox News and CNN,
which swing right, were on a rise, BBC took off
in the US and brought balance. That is why an
open-minded entry policy helps and India has
that. Vanita Kohli-Khandekar: The Reliance-Network18 affair | Business Standard Opinion
