Indian media houses, promoters and practitioners are gung-ho about foreign direct investment (FDI) in all sectors except the media, under the specious argument that the media is not a “commodity”, etc.
Media barons who justify the worst excesses of modern Indian media under the this-is-what-the-consumer-wants logic, somehow find it convenient to block FDI in media although this is also what the consumer might want.
Raghav Bahl, the founder of the heavily bleeding TV18 network (and reported to be considering a dalliance with Reliance Industries’s Mukesh Ambani), gives the protectionist argument some more air in a supplement brought out by the Indian Express, to explain why India hasn’t thrown up a media mogul:
“In India, thanks to the liberal FDI policies and the high proportion of English language speakers, a Google will come and set up base and then use this to gradually move into local Indian languages. In China, however, a Google can’t enter and you need a Baidu. So a Baidu will get market cap in China, while in India it will be Google or Facebook.
“The inroads global media firms have made in India is good from its citizen’s point of view but when it comes to creating value and scale for a local media firm, this is not good news…
“The largest Indian media firm Zee TV has a market cap of $2.5 billion—thats puny by global standards. Few Indian media firms can, for instance, buy a Newsweek but a Baidu can easily do this. Can I compete with a Google or Facebook? The only other company (other than Zee) to get scale of that sort is Network 18. UTV sold out and no newspaper has really created meaningful scale, But we have a market cap of just $300-400 million even after being the biggest to scale up and we have a very levereaged balance sheet because of this,…
“The short point is that India’s advantages for a thriving media industry will be disadvantageous for the Indian who dreams to become the next media mogul. For such an aspiration, countries with closed media markets, such as China, offer an advantage since this allows local firms to build up the capital base that is essential to becoming a serious player in the technology space, so vital to being a global media firm.”
External reading: Network 18: mega hotch-potch of companies
Also read: What the prime minister told Raghav Bahl