The more competitive the media business gets, the more inventive media houses become. And it becomes more of a headache to track the ethical dimensions and conflict of interest possibilities that emerge. Bennett, Coleman and Co. Ltd, the market leader in brazen inventiveness, began some time ago to invest in companies which would then advertise in their group publications. In return for equity it offered what it termed " advertising support, branding support" and what it euphemistically called "corporate image development". The corporate world saw it as a welcome innovation and the media world slowly woke up to the new trend.
This is the same corporate group that began Medianet, a plan through which you can buy coverage in the group's supplements. First it declared which items had come through Medianet, then it dropped the disclosure, but continued the practice. Private treaties is its latest brainwave. It builds an investment portfolio by picking up 1 to 15 per cent stake in companies that are planning to be listed, and builds their brands for them. Just a barter arrangement for advertising? Not really. As a posting on V C Circle, a web publication for venture capitalists confirms, "We were offered a deal from Times PE' We were told in passing that we'll get "favorable" press coverage."
Actually Times Treaties is not shy of revealing the coverage benefits that go with giving it equity: here's a sample of the gush from one of the endorsements on its private treaties website: "Times treaties supported us to the hilt in all our strategic brand building activities - Consumer Product Launches, Corporate Results, Brand Coverage in Brand Equity and Manufacturing product launch in page 3 etc. Simply awesome." This from the MD of a company called Zicom Electronic Security Systems Ltd. He adds, "Our relationship rocks."
And what do such rocking relationships mean for the journalists who work with the company which offer such brand building services? Sucheta Dalal gave one example when she cited an email from Economic Times editor Rahul Joshi spelling out the kind of editorial support system that the paper was putting in place for Private Treaties clients, in a story earlier this month in MoneyLIFE.
The scrutiny that private treaties in the media are getting is now growing. Last week saw two articles and an editorial on the subject in two business dailies, both flagging the trend and raising the conflict of interest issue. After Business Standard reported that other newspaper groups such as HT Media Ltd, Dainik Bhaskar and Dainik Jagran were getting ready to follow the trend set by Times Private Treaties, Mint from the Hindustan Times stable published a more exhaustive story on a controversial trend whose potential its parent group is also exploring. (We're happy to note the absence of self censorship.) Television groups had followed BCCL's lead even earlier- Network 18 which owns CNBC TV 18 has a private treaties division. Anyone who follows CNBC's company coverage knows that its corporate gush would give ET strong competition. Nevertheless, promoting companies with which it has private treaties amounts to more than friendly coverage.
Asked about private treaties earlier this month in an interview with exchange4media, Network Eighteen managing director Raghav Bahl talked stoutly of credibility. "Treaties for us is monetisation of our inventory through investment in other persons' business. Whether you buy something in cash or via inventory, you are exchanging one asset for another. We promote them by way of giving them advertising spots. There is no editorial influence. And for those spots, they could well have paid cash for'I am an editor. I know that the only thing you sell as a news media company is credibility. The minute there is a question mark on your credibility, you have actually bartered away your entire asset."
Well, with a little civic activism channels and newspapers which have private treaties divisions can be tracked in respect of their coverage of companies that they have such agreements with. Mint and Business Standard put the number of private treaty deals BCCL has at around 140-150. Neither gives a figure for just how enterprising CNBC has been, because it does not list its deals as openly as BCCL does. But it is worth investigating.
With no effective media regulator in place, and a civil society that is remarkably active in other sectors but simply not that charged up about media conduct, India's media businesses can continue to innovate, untrammeled by ethical constraints. Unless the profession keeps up the pressure on its own as it has begun to do. BCCL has shown in the past that it has absolutely no problems in ignoring such pressure. We can only hope that others will have thinner skins.
Welcome To Times Private Treaties timesprivatetreaties.com
Private treaties portfolio
News for Sale, MoneyLIFE
HT, Bhaskar, Jagran eye shares-for-ad divisions Business Standard
Should private treaties be made public to newspaper readers? Mint
Publishing directions, Business Standard
More Media Companies Follow BCCL With Private Treaty Divisions VC Circle
Apollo arm in pact with Times Private Treaties Economic Times