Trai against cross-media restrictions

In a development that will bring relief to the media houses like the Bennett, Coleman and Co Ltd (BCCL), HT Media Ltd, Living Media group, the Telecom Regulatory Authority of India (Trai) is planning against posing any restriction on media cross-holding in the country.

The broadcast regulator is of the view that in countries where such media ownership restrictions exist, the?print and electronic media have already evolved while?in India?the electronic media space in particular, is in relatively early satges and is still evolving. ?One has seen television and print media draw synergies both for news content and derive economies of scale that makes television entertainment in the country affordable to the consumer,? said a Trai official.

The final recommendations are expected shortly. The print players?sense?a sound logic for established newspaper enterprises to diversify in the electronic media to insulate it from the financial risk of dealing with the excessive volatility in the market of newsprint.?The broadcasters in the country claim that they command one of the lowest average revenue per user at $4 compared to $40 in USA and Indonesia and $20 in Singapore enabling viewers to access TV content at such low price points.

Media houses argue that media businesses require huge capital investments and have long gestation periods ranging upto 10 years or more and imposing cross-holding limits at this stage will retard the growth of the media industry, and affect the efficiency of the media businesses. ?If such provisions (cross holding restrictions) were to be introduced, this would require a complete restructuring of India?s broadcasting industry, leading to a loss in revenue, downsizing and affecting the current and future economic potential and employment capacity of the industry,? according to the Indian Broadcasting Foundation.

?Cross-media restrictions inherently work against convergence and economies of scale. Convergence of media, a global phenomenon is taking place very rapidly. Any regulations restricting use of content assets to any specific medium will deny the technological and commercial advantages of convergence,? a broadcaster said. He added that multimedia ownership and operations provide media enterprises significant advantages in terms of amortising the cost of content, distribution and manpower over a larger volume of revenue. Any kind of restrictions may prove to be counter productive, anti-growth, anti -investment from a long-term perspective. Vertical and horizontal expansion of converged media has attracted investment into under-invested areas without in anyway creating anticompetitive barriers, he added.

Most media houses had strongly opposed any kind of restriction on cross media ownership, when Trai sought their comments on the subjects. The regulator had invited comments on the subject following a reference from the ministry of information and broadcasting. ??

BCCL that has presence across the print, electronic, radio and emerging media sub-sectors favoured distinguishing between commercial media and news media. ?FM radio licences and commercial content broadcasting licences pertain to commercial space while TV news channels and newspapers are in the news space. Regulations for these two categories can never be the same,? it said.

Bharti Airtel, primarily a telecom player that recently ventured into DTH and IPTV services said, ?Convergence of broadcasting and telecommunications has allowed to deliver one service using broadcasting technologies and through telecommunication networks? World-wide, all telecom companies are entering into the broadcasting sector and providing world-class carriage services to its customers?. Bharti has said there should not be any restriction of cross-holding between telecom companies and broadcasting carriage services like cable, HITS, DTH, Mobile TV.

Consumer organisations have suggested a 20% market share in at least two of the three verticals as a threshold for determining market control. The TV Today group maintained that in India, with the availability of unlimited choice in TV, print, radio, Internet, developments in technology opening new avenues, no one would be able to monopolise or dominate even any particular medium. ?Even in the print media, the leading English newspaper perhaps does not command even 5 % of the market share?, said TV Today.?

Zee, that straddles across?various broadcasting genres and FM radio echoed the feeling. ?Indian scenario where highly competitive environment exists in each segment of media? whether it is TV?or Radio?or print, DTH?,cable sector?is fragmented. There is absolutely no danger?by any stretch of imagination of any one player dominating the media landscape,? it said.

Whereas, the turnover of the entire TV industry is estimated at Rs 27,800 crore in 2008 and that of print media at Rs 16,900 crore, the turnover of one single telecom company, Bharti Airtel is over Rs 27,000?crore,?an analyst?pointed out.

The broadcasting sector?(370+ operational channels, several more waiting to launch with 80 broadcasters), DTH (5 operational, 2 more waiting to launch), radio (280 stations, 338 licenses across 87 cities around 37 companies with no single player?with over 40 stations), cable (6000 MSOs and 60,000 local cable operators)?or print media (62,000 registered newspapers across 24 languages, 9,000 in English) is fairly fragmented.

Number-wise

Cross- media restrictions inherently work against convergence and economies of scale

Market share

•Even in the print media, the leading English newspaper does not command even 5% of the market share

• Consumer organisations say a 20% market share in at least two of the three verticals as a threshold for determining market control

• With the availability of unlimited choice in TV, print, radio, Internet, developments in technology opening new avenues, no one would be able to monopolise any medium

• The turnover of the entire TV industry is estimated at Rs 27,800 crore in 2008 and that of print media at Rs 16,900 crore,while the turnover of one single telecom company, Bharti Airtel is over Rs 27,000 crore

The broadcasting sector is fairly fragmented:

TV channels

• 370+ operational channels, • several more waiting to launch with 80 broadcasters

DTH

• 5 operational

• 2 more waiting to launch

Radio

• 280 stations

• 338 licenses across 87 cities

• Around 37 companies with no single player with over 40 stations

Cable

• 6000 MSOs