Zee-Jindal case: What it really tells you about the media

The ongoing legal battle between the Zee Group and Congress MP Naveen Jindal, over an alleged bid by the former to “extort” money in the form of advertising revenue, puts the spotlight firmly on the seamier side of the media business. While the Zee Group says the arrest of two of its editors, Sudhir Chaudhury and Sameer Ahluwalia, amounts to an effort to muzzle the media, the Jindal group obviously does not agree. It has submitted video footage to the Delhi police which apparently shows the two editors discussing a Rs 100 crore advertising deal. It is not my purpose to get into the details of who is right or wrong, but to point out that this case is not an isolated one. It may, in fact, merely be a symptom of the larger underlying disease. That disease is this: most media business models are plain and simple unviable. Genuine, honest journalism is becoming increasingly difficult to carry out without compromising on ethics somewhere. The advent of paid news, sponsored write-ups (often without adequate disclosures), and open blackmail (by both advertisers and media owners and editors) is a clear pointer to this state of affairs. Many forces have led to the unravelling of the old media business model. [caption id=“attachment_539659” align=“alignleft” width=“380”]  Reuters[/caption] One is obviously the internet. As content explodes on the net, readers no longer have to depend on newspapers or TV channels for their news or entertainment. Since the internet is essentially free, every other business model is ultimately bound to go down the tubes. The only effective counter to free internet is free newspapers or free TV. So revenues from the sale of content are tending towards zero in all media. Newspapers that cost Rs 10 to print are being sold at Rs 2-3, making subscriptions a marginal revenue source. Content is paid for only when it is extraordinarily focused (like a magazine for power sector), or very high quality. But the costs usually outweigh the revenues. The second element is the power-shift in favour of the advertiser. An essentially free readership model needs high paying advertisers to bankroll it. This is why businessmen have lots of clout with the media. This is why even politicians have the ability to pressure the media. Both control advertising money without which newspapers and channels would bleed to death. If it is the advertising money that keeps media afloat, media ethics is reduced to a fig-leaf to cover their nudity. The third point is counter-intuitive: on the internet, the advertiser no longer needs the media to advertise his wares. Any company or entity can put up a website at minimal cost, and so does not need to advertise at high costs. As more readers get to their news through search engines, advertisers will be able to even redirect traffic to their sites or news items. Moreover, some of the companies that were earlier big advertisers – banks, and trading and transaction sites, for example – know that they themselves generate so much direct traffic that they can cross-sell to their existing customers without advertising. Consider a bank like ICICI Bank, or a ticketing site like Makemytrip.com or IRCTC (which sells railway tickets by the million, and is India’s largest e-commerce site). While they do advertise on the internet and even the regular media, the fact is millions of Indians are coming to them directly for their needs. These sites can not only do transactions, but – at some point of time – can offer themselves as advertising vehicles themselves, if regulation permits. This suggests that even internet sites will have a tough time becoming viable, if they incur huge costs on generating original content. Newly-empowered advertisers have other options too. Over the last two decades, thanks to declining viability, most media companies have had a tough time retaining their top talent. Many good journalists have made the transition to PR and corporate communication agencies. The net result is that companies already own some of the best journalistic talent, and all they have to do is create and place media messages that will sell as news. What companies are increasingly realising is that their ads – whether in print, TV or even the internet – are not giving them bang for the buck due to the clutter and fragmentation. They are thus keen to have their communications masquerade as news content. They prefer paid content to advertising because there is still some credibility value in being seen as “news”. This is really the main logic for paid news – which is not merely the result of an ethical deficit on the part of the English or regional news media. The threat from advertisers is clear, though unstated: “if you can’t couch my news as regular news, I have alternatives.” Some media houses have tried to get around the problem by making editors also accountable for revenues; others have tried more subtle means, like encouraging editors to do positive stories or interviews of businessmen or even crooks in the hope of luring advertising. But even this does not ultimately work – for readers are not fools either. Paid news and blackmail-driven advertising revenues may seem like recent inventions, but the truth is they have always been around. What is now blatant was hidden in the past, since the media was much smaller and could easily be manipulated by the establishment with favours. Consider the blandishments offered in the past. Every newspaper house in Delhi or Mumbai or state capitals was offered cheap land, on which they have constructed expensive rental-properties. Delhi’s Bahadurshah Zafar Marg is evidence of this. In many cities, cheap land was also offered for journalists’ housing. Hence Patrakar colonies and media enclaves. When both your office and home are the result of official favours, clearly you are part of the paid news clan, even if you don’t think so and there’s an arm’s length distance between you and powerful favour-seekers. In the olden days, these favours were enough to keep editors and journos in line; today we need paid news since the media is fragmented, and it is not possible to give cheap land to every TV group or thousands of internet journalists. The official efforts to muzzle the internet are partially driven by the realisation that journalism can even flourish without salaries at micro-level blogging. This is where real media freedom flourishes at no cost. But, one may point out, many newspapers and TV companies still seem able to make ends meet. And so there is some business model worth exploring. Sure, there must be. But one suspects that they will largely trade-oriented niche publications, or narrow business publications that do not intend to question business too closely. In the case of the rest, this is how it may work. Let’s take newspapers with low regional or national circulations. They survive on government tender ads, and ads mandated by regulators – like audited and unaudited financial results, mutual fund ads, or corporate notices that have to be published in one national and one regional daily. Take away these props – these are antiquated regulations, since tenders and notifications will anyway shift to the net, and users can set themselves Google alerts to know when a tender is floated by any company – and even this bare-bones business model is bound to crumble someday. These media companies exist because government departments still are in the stone age, and/or prefer to remain there for collateral reasons. But money still keeps flowing into the media from dubious sources. Every politician or political party of some size seems to have a media company attached – Jagan Reddy in Andhra, the Sun Group in Tamil Nadu, and the Lokmat Group in Maharashtra, are some examples. Such media companies exist not only to get journalists marching to the drumbeat of political necessity, but also to launder money. When a lot of funny money exists in the economy, the media is one obvious place to expend it for collateral benefits. As Vanita Kohli-Khandekar observes in Business Standard, “More than a third of news channels are owned by politicians or politico-affiliated builders. An estimated 60 percent of cable distribution systems are owned by local politicians. These have influenced and funded several local elections. There are dozens of small and big newspapers owned by politicians or their family members that influence the course of several local elections. Many newspaper chains with political affiliations also own broadcast networks. Most now have Internet portals.” Bad media is driving good media out of business. But given the fact that power has shifted to the advertiser, it may be time to ask this question: should media be looking at a non-profit model to remain really free? If an ethical media is crucial to a democracy, the media has to look beyond viability to be relevant.