Good Morning India:Good Luck, Omar Abdullah

Media Pulse

Another interesting fact that comes to light is that there are nearly as many rural readers as urban. Of the 180 million readers, as many as 48 per cent are from six lakh villages scattered across India. According to NRS 2002, the reader base for dailies/newspapers increased from 131 million in 1989 to 156 million this year, an increase of 20 per cent. The growth in the reach of dailies is substantially higher than the literacy growth of 13 per cent in the same period. Language dailies have contributed significantly to this growth. The highest read Hindi daily in India now surpasses a readership of 13 million. The newspaper has now extended its reach to the urban housewife/FMCG decision makers. According to NRS 2002, 25.4 million urban housewives as compared to 21.7 million in 1999, now read daily newspapers. And this comes at the cost of reading magazines which was considered a staple diet for most women. The survey shows a decline in readers of magazines. Magazines, overall, show a decline in the reader base, both in urban and rural India. The reach of magazines has declined from 93.8 million in 1999 to 86.2 million in 2002. Magazines have lost 22 per cent of their reach since 1999, taking into account the population growth over these years. The decline is mainly in the general interest, film/entertainment and sports magazines, where the percentage decline on an average is over 25 per cent. The time spent on traditional media has marginally declined in urban markets. According to the report, in 1999 an urban adult spent on an average 14 hours a week or 2 hours a day on traditional media, that is, press, TV, radio and Internet. Since then, the time spent per week per urban adult has declined to 13 hours a week or about 7 minutes less per day per adult.

In comparison, the time spent on traditional media in villages is virtually half—6 hours per adult—and this is more or less constant since 1999. The decline in time spent on traditional media has not affected reading time in urban media. The average reader still spends about 16 per cent of his total media time, that is, 18 minutes per day, in reading a daily/magazine.

Urban India now spends marginally less time watching TV although TV still commands the lion’s share of media consumption. According to NRS 2002, TV still commands a 72 per cent share of the average 13 hours spent on traditional media the amongst urban audience. If taken in absolute terms, there is a slight decline in time spent on TV in this market. Despite the increasing programme options, the average viewing time has come down from 85 minutes in 1999 to 82 minutes in 2002. The growth in C&S penetration is more than twice the growth in TV-owning homes. As per the report, TV now reaches 81.6 million Indian homes and reflects a growth of 12 per cent since 1999. Access to C&S homes jumped from 29 million in 1999 to 40 million in 2002—a 31 per cent growth rate, more than twice the growth of the TV market. C&S subscription has now penetrated 50 per cent of all TV homes. Another interesting fact thrown up by NRS 2002 is that Internet reach exceeds 6 million homes. The access to Internet in the last 3 months increased to 6 million. The growth of the Internet has stabilised at 2 million annually.

Indian print media is set for a major change following the government decision to permit 26 per cent FDI in Indian entities publishing newspapers/periodicals dealing with news and current affairs. The landmark decision, though not entirely unexpected, is a "partial modification" of the earlier 1955 Cabinet decision on the subject. The step will give a fillip to several English and regional publications waiting for funds to take on near monopolies in publishing. The Indian Newspaper Society, however maintained that "FDI will compromise national interest." It commented that it did not matter whether it was 26 per cent or 74 per cent as the foreign investor can always control policies and content.

The official press note issued by the Information and Broadcasting Ministry said - "A comprehensive review of the whole matter has been carried out now…. The policy now would provide for 26 per cent FDI in Indian entities publishing newspapers/ periodicals dealing with news and current affairs, after suitable verifications by the Central Govenment and the editorial and management control remaining fully in Indian hands." This will, in effect, open the door for Indian media houses seeking foreign investments to upgrade their infrastructure and compete with large near-monopolistic competition. The Government also allowed upto 74 per cent equity investment in Indian editions of foreign owned technical journals and speciailty ‘non- news’ magazines. The Indian Newspaper Society (INS) reiterated its stance opposing the decision. Citing arguments like ‘threat to national interest’, ‘invaluable contribution to the freedom struggle’ and ‘FDI will jeopardise harmonious relationship among the different communities’ in support of the anti-FDI rhetoric, the INS chose to distance itself from the decision. "It is a matter of surprise and consternation that the Government have overlooked the recommendation of the Parliamentary Standing Committee on IT headed by Somnath Chatterjee and allowed entry of FDI in print," commented INS President Pratap Pawar.

While the print body was circumspect, the Confederation of Indian Industry (CII) lauded the Government’s decision. "Allowing FDI is a bold and significant step. This is a positive first step. It will take a year to stabilise. After discussions with major publications, CII had made a recommendation to Ministry," remarked Biren Ghosh, member of CII sub- committee on Entertainment.

At many print organisations, notably India Today, Indian Express, Mid-Day, Dainik Jagran and Business Standard, the mood is upbeat. Others like Bharat Kapadia are cautious, "There is a plus as well as a minus. Right-minded investors can improve the knowledge base and technology. But this critical medium in wrong hands can also cause serious problems." The government, on its part, has however taken a few precautions to prevent misuse. Besides, the editorial and management control remaining fully in Indian hands, the approval to allow FDI will be on a case-to-case basis giving the government time to review each proposal. To avoid effective management control by foreign players holding 26 per cent–, the Government has stipulated that the largest Indian shareholder should have ‘substantially’ higher holding. Detractors argue that these clauses leave much to interpretation and can lead to slow decisions.

The Government has taken a calculated risk on FDI in print media, as the RSS and Swadeshi Jagran Manch, have been opposed to the move. The Congress the government had gone ahead with a decision on which there was no consensus.The Left parties attacked the "handing over of the media to the imperialist powers." The monsoon session of Parliament could see fireworks over the issue.