Govt appointed panel reports ‘print industry is not facing any immediate threat’

the question arises as to how the industry’s momentum could be accelerated for achieving higher growth.
suggested to enhance the FDI limit for the newspapers from the existing 26 percent to 49 percent.

In the context of promoting innovation in print media, the panel appointed last year by Ministry of Information & Broadcasting, Govt of India has suggested to enhance the FDI limit for the newspapers from the existing 26 percent to 49 percent. The panel recommendation is based on the analysis of immersing media like several foreign TV channels beaming news and expert comments and similarly in a converged world, internet carries news updates from hour to hour having wider impact on the consumers.

The panel from Sectorial Innovation Council (SIC) – headed by Asha Swarup, the former secretary, Ministry of Information and Broadcasting, Govt of India is of the opinion that there are some irritants and constraints to growth which need to be eliminated. They would urged that, on priority, the functions of DAVP, RNI, CBFC and licensing activities of the government, be diverted to electronic mode to avoid human bias and prejudice. Such a system will greatly promote transparency in governance, which is a key to innovation strategy and management.

According to the report, the print media in India has more than 78,000 newspapers registered with Registrar of Newspapers. It is one of the most diversified industries, spread out in several languages across Indian states. The size of the industry, which was Rs 108 billion in 2005, has been growing at 10 percent on an average per year and is likely to reach Rs. 310 billion in 2015 (FICCI-KPMG 2012). The growth of print media in India shows that the new media, which came after emergence of information technology, does not pose an immediate threat to the print media in India.

The report further says, as per the estimates of some of the leading editors of India, new media, as of now, is not a threat; rather it is an opportunity for the print media to increase its readership base and, therefore, most of the leading newspapers have gone for e-newspapers to expand their readership base. Apart from e-newspapers, internet is being used for reporting. The internet editions of some newspapers are more updated then the printed newspapers, as these capture the news even after the paper goes for printing. Currently, there is hardly any subscription for e-newspapers. This has enabled the readers across the globe especially among Indian diaspora to access the e-newspaper freely and read it.

The report suggested, once a dedicated readership builds up, the possibility of income from e-newspaper cannot be ruled out. It is also felt that e-newspapers, at times create an additional demand for printed newspapers. The e-newspaper creates news flashes and news updates, which are generally free and these create an appetite for being informed about news content through feature stories, data examination and assessment, informed comments and expert analysis and opinion which are generally available in a newspaper.

The report further said that, it is a fact that except in USA and UK, where the social media has outpaced the growth of newspaper and has impacted newspaper industry in reducing the circulation, rest of the world has experienced sustained growth of newspaper only because the consumers are still interested for feature story telling and expert comment, rather than being updated on newsflash.

Going by this logic, the council does not foresee any immediate threat to newspaper industry in India in the near future. The industry is likely to grow at 10 percent, as predicted by the industry associations. While the print industry is not getting any immediate threat, the question arises as to how the industry’s momentum could be accelerated for achieving higher growth. The Council finds that new and innovative business models are being adopted in print media.

The regional newspapers have become the centers of innovation which attract new readers to them. Because of this, some of the big newspapers have started acquiring small newspapers in vernacular languages. In this process, the regional newspapers get technical assistance from the big newspapers and are able to improve the quality of their presentations and content. The regional newspaper space is likely to grow further.

There is however, a disturbing trend recently seen in the newspaper industry, where new methods of garnering revenue have been adopted by some media houses. Some of the newspapers have gone for private treaties with mid-sized companies, which are cash starved. The newspaper develops the brand of the company through media campaigns in return for equity. Apart from it, some newspapers are allowing paid supplements/advertorials. Such practice can be considered ethical only if there is an appropriate disclosure.

The council has focused its attention of the issue of ‘cross media ownership’ and absorbed that there are several arguments against cross media ownership and the most prominent one is that unregulated cross media ownership will affect plurality of views that are essential for democracy. Some others argue that the guidelines/regulations are a farce as companies find ingenious ways of circumventing the provisions.

The council also finds that currently there is no news agency in India, which can be said to have a global presence. PTI was set up under section 25 of the Companies Act 1956 on no profit no loss basis. Hence, the possibility of its global presence is limited. The other argument, that is made, is that size does matter for optimal operation and for becoming and effective competitor at the global level. Therefore, the council recommends that certain degree of consolidation within print media spectrum is required, which could provide much viability in operation, and, in the process, could spur innovation in this sector. It could perhaps also lead to the development of a home grown news agency with a global presence, which is critically absent in Indian context.

HIGHLIGHTS Enhance the FDI limit for the newspapers from the existing 26 percent to 49 percent.
On priority, the functions of DAVP, RNI, CBFC and licensing activities of the government, be diverted to electronic mode to avoid human bias and prejudice.
The size of the industry, which was Rs 108 billion in 2005, has been growing at 10 percent on an average per year and is likely to reach Rs 310 billion in 2015.
New and innovative business models are being adopted in print media.
The regional newspaper space is likely to grow further.
Some of the newspapers have gone for private treaties with mid-sized companies which are cash starved, and develop the brand of the companies through media companies in return for equity.
Certain degree of consolidation within print media spectrum is required, which could provide much viability in operation, and, in the process, could spur innovation in this sector.