What is cross-media ownership? And do we need to regulate it?

The Indian media landscape is witnessing a change like never before. With corporate buyouts of media houses and rapid expansion across platforms, there’s a pressing need to debate and discuss media ownership rules in India. Every now and then, there’s talk of “self regulation” as an option and history has shown it does not work. The government regulating the media is an even bigger danger and we have seen how that played out during the Emergency and to a lesser extent during several riots in the country.

So, how can media be regulated? To ensure that there is a cross section of voices with varying points of view that form public opinion, many countries have rules on cross ownership of media. We thought we’d fill you in on the basics.

So, what exactly is cross-media ownership? Quite simply, it means the ownership of multiple media businesses by a single corporation or person. Typically, there are two patterns to cross-media ownership: horizontal and vertical.

Horizontal cross-ownership implies a media company having interests across segments like print, television, radio, the web and so on. For example, Bennett, Coleman and Co – also known as The Times Group – owns a thriving newspaper chain (The Times of India, The Economic Times), a TV network (Times Now) and a website (indiatimes.com). Or, Living Media that has interests in magazines (India Today, Business Today), television (Aaj Tak, Headlines Today), radio (Oye 104.8 FM) and the web (indiabizsource.com).

Vertical cross-ownership arises when a broadcasting company that owns a TV channel also controls distributors like cable networks and multi-system operator(MSO), or vice versa. For example, the Essel Group owns TV channels (Zee News) and MSO (Siti Cable).

So, is that bad? Well, in a way. The media plays an important role in helping a democracy thrive with diversity of opinions. Unregulated cross-media ownership can eventually mean the death of plurality. In fact, Telecom Regulatory Authority of India (TRAI) Chairman Rahul Khullar had stated a while ago that cross-media ownership was leading to a monopoly of opinions and poses a grave threat. Also, since cross-media ownership is largely driven by commercial considerations, media conglomerates in such a scenario are more likely to remain loyal to advertisers (large corporations and the government) than to public interest.

Does India have any cross-media ownership restrictions? No, not yet. There are no cross-media ownership restrictions in print, TV and radio in India. In the radio space, there are restrictions on getting multiple permissions across cities for operating FM radio stations. Last year, TRAI had put forward a consultation paper on issues related to media ownership. Its findings and suggestions were opposed by the management of some media houses, including The Times Group.

Do other countries have such restriction? Yes, like the United States and the United Kingdom.

Really? You mean giants like Time Warner and News Corporation have to comply? Pretty much. The US and the UK have put in place regulations to limit cross-media ownership to promote diverse viewpoints, competition, local content and public interest.

Notably, the UK has the 20:20 rule as part of the 1990 Broadcasting Act. The 20:20 rule prohibits owners of national newspapers with a national market share of 20 per cent or more from controlling a licence or owning more than 20 per cent of a television broadcaster or a radio service. The rules in the UK have been changed several times and are being looked into for more changes, keeping the evolving market and internet penetration in mind.

In the US, cross-ownership rules were first put in place in 1975 by the Federal Communications Commission. The country has the “2-out-of-3” rule that limits a firm or an individual to owning only two of the three segments – newspaper, TV and radio – in any given market.

So, all’s well in the West? Not really. Like corporations in India, media moguls there find a way around rules to further their businesses. The US’ media landscape is dominated by the “big six” – that is, Comcast, Walt Disney Company, 20^th Century Fox/News Corporation, Time Warner, Viacom and CBS Corporation. Australian-American businessman Rupert Murdoch’s News Corporation is one of the world’s largest media groups with newspapers, entertainment groups and publishing outlets in the UK, the US and Australia. He, nevertheless, had to travel half way around the world, across continents, because of cross-media ownership regulations to do so. Murdoch recently made an audacious $80 billion-bid to acquire Time Warner Inc. Though Time Warner rejected the offer Murdoch’s urge to merge is legendary and he’s not known to take no for an answer.

So, what does the future hold? With the Internet converging what used to be TV and newspapers/magazines, it’s anyone’s guess. There are committees and groups looking at what regulation should be like, but it’s a fast-changing landscape and often regulation can’t keep up with the market. India, though, can start with putting in place some basic rules on ownership.