The Hindu declined to publish this column
At a year-end media policy seminar in Delhi, a Star TV representative made the plaintive assertion that the Government needed to reconsider its 26 per cent cap on foreign direct investment in news media. The thrust of that particular discussion was that financial unviability is today the chief hallmark of the TV news business which is tottering, even as it grabs eyeballs and mindspace. And the unsaid corollary was that major cash infusions were urgently needed if news channels were to continue offering what could still be broadly described as news.
Such infusions can only come, it seems, from foreign investment sources or from a conglomerate which has both cash available for investment and a long-rumoured-about interest in media. So when the Wall Street Journal reported last fortnight that Mukesh Ambani was in talks with Raghav Bahl, the promoter with a controlling stake in the company, “over the possible purchase of a stake in television and Internet conglomerate Network18” , the news flew energetically around the business news space, getting picked up everywhere. Even though the report took care to mention at the beginning of the third para that ”the talks may yet lead to nothing.”
The report also clarified that it was not clear whether this was Mukesh Ambani wanting to invest his personal wealth, or make an investment on behalf of Reliance Industries. A few days later a Reliance spokesperson denied that the company was interested in buying a stake in TV firm Network 18.
But there are other angles to the story which others have been reporting last month. Namely, that Raghav Bahl was in talks for a share swap with ETV for a stake in its regional channels bouquet. Why is that significant? Because Mukesh Ambani has already been indirectly linked to an investment in ETV through his associate Nimesh Kampani, something that the media in Andhra Pradesh has been energetically reporting on through November-December, particularly Jagan Reddy’s Sakshi.
ETV meanwhile had earlier been in talks with Sony for a deal, which eventually did not materialize. And so far neither Network 18 nor ETV have confirmed that they are talking to each other.
Mukesh Ambani’s interests in media openly surfaced in 2010 with the Radia Tapes which suggested a relationship with NewsX among others. Meanwhile an unconfirmed newspaper reports linked NDTV too to Reliance, something which the company responded to by sueing the newspaper which had suggested it.
The Ambani who was openly into the media business till then was Anil Ambani who in 2007 made a string of media entertainment acquisitions and more recently bought stakes in a few news media companies. Some of which he exited later.
Increasingly though the trend is one of consolidation, and the point is that one by one, India’s original TV entrepreneurs who grew at an impressive pace, are being bailed out by big business. Both Raghav Bahl and Prannoy Roy’s companies have seen losses piling up and investors coming in, and Ramoji Rao with his huge media empire in Andhra Pradesh has been looking for investments to keep the empire going. Meanwhile the big media conglomerates like Star and Zee have been steadily acquiring regional media properties across the country for some years now, in Tamilnadu, West Bengal, Gujarat, and elsewhere. One by one, Vijay TV and Asianet were acquired by Star, while Zee has invested in news channels Chobbish Ganta and Akash Bangla in West Bengal.
Meanwhile December 2011 saw Ronnie Screwalla, another one of India’s original TV entrepreneurs, selling his remaining UTV stake to Walt Disney, which has already bought 48 per cent in UTV Software Communications Ltd.
Rajat Sharma who owns India TV and was one of the original television entrepreneurs in the 80s-90s, is an exception to the current vulnerability, having received helpful investments early on which helped to consolidate the channel's position. He also stuck to a single channel, though a second one is now planned. And in the South early entrepreneur Kalanidhi Maran is today a striking exception to his beleagured Northern counterparts, having retained his family’s control of a massive, diversified media empire. To what extent political clout helps continued viability is a subject worthy of future media research. Certainly in the case of Sun TV, a company which owned the cable networks which carried its channels, it did not have to suffer the financial scourge of carriage fees.
Partly because television gets valuations that print does not, and partly because print does not bleed its owners through carriage fees and through excessive competition to the same degree that television does, the same phenomenon is not visible in print, where the big owner families continue to retain control of their empires even after they bring in investors. Not do print owners expand into risky non-core areas the way television entrepreneurs have done.
Diversifying into television entertainment as NDTV did, and as Raghav Bahl did, has proved costly in more ways than one. What makes Bahl’s empire valuable to a future investor though is the same expansions –it went from financial news to general news, to internet properties, and then to television entertainment, through its joint venture with Viacom, Viacom 18.
In today’s dynamic media landscape then, media ownership is becoming an increasingly fluid proposition. And therefore worth tracking, more than before.
N18 & TV18 to acquire ETV channels; RIL to fund deal