print and the mint!-paid news-governancenow-sept 1-15, 2010.pdf

GovernanceNow | September 1-15, 201030

Jagdeep S Chhokar

The 2009 elec-tions to the Lok Sabha and to the Maharashtra and Haryana assemblies confirmed

that the electoral system in India, and consequently In-dian democracy, has contact-ed another deadly, and so far untreatable, virus. While tech-nical names and descriptions may vary, in common par-lance it is called paid news.

The term paid news was first used by the Andhra Pradesh Union of Working Journalists (APUWJ), which was the first union of jour-nalists to speak out against the phenomenon. While the

APUWJ traces the genesis of paid news to the general elec-tions of 2004 when small and local newspapers in mofussil towns and district headquar-ters in some parts of Andhra Pradesh and Gujarat started this practice in an organised way, a report prepared by a sub-committee of the Press-Council of India traces the origins of the practice to the start of a paid content ser-vice by the name Medianet by Bennett Coleman Company Limited (BCCL), publishers of the Times of India (see box). This service started openly offering to send journalists to cover product launches or personality-related events, for a price. The efforts of con-verting journalism into busi-ness bore fruit when it was widely reported in 2005 that several companies had allot-ted equity shares to BCCL in return of BCCL providing ad-vertising space to these com-panies in BCCL-owned media ventures in what came to be called private treaties. The success of private treaties at-tracted attention from various quarters, one of which was

MediaNama.com, the pre-mier source of information and analysis on the telecom and digital media business in India. S Sivakumar, CEO designate of Times Private Treaties, was interviewed by Nikhil Pahwa, editor of Medi-anama.com, on June 24, 2008. When asked about the total value of the portfolio of Times Private Treaties, Sivakumar said, The market valueI dont know since were not in the business of exiting. At cost, I can only give an indica-tionat an average deal size of Rs 15-20 crore and 175-200 clients. This puts the aggre-gate value somewhere be-tween Rs 2,625 crore and Rs 4,000 crore!

From the small newspa-pers owned and edited by the same person assisted by a few others enter(ing) into agree-ments with the local leaders of prominent parties or candi-dates and start(ing) to publish propaganda material of these parties or candidates as news for a fee in the run up to the elections (APUWJ) to the Rs 2,625-4,000 crore business of Times Private Treaties is some

progress indeed! That is why much has been written about paid news and innumer-able discussions and semi-nars have been held but there seems to be still no signs of any real action.

Several leading lights of what is now called media have expressed serious con-cern that unless something is done by them, themselves, the government and the po-litical class will take advan-tage of the situation and force some kind of draconian con-trols on them. Such fears are not unfounded. While there is much speculation about what the government might do, there does not seem to be any reliable evidence of intended specific action. The newspa-per reading and TV watching public, of course, continues to be confused about what to believe as news, and what to treat as disguised advertising.

With so much agreement on something like self-regulation by the media, why it is that nothing seems to be happen-ing, and what can be done to make something happen? One of the main reasons is the lack

Print and the mint!Only those with commitment to journalism can counter the paid news trend and they must do so at the earliest

people politics policy performanceReader Beware!

ashish asthana

www.GovernanceNow.com 31


of clarity about all that is in-volved. Following are some of the major confounding issues.

The very first is what me-dia is. In a discussion on paid news, one of the lead-ing newscasters and writ-ers maintained that the issue concerns the entire range of media, including films, television, etc. This, that is to say, broadening the issue, is a standard technique of confusing matters leading to paralysing action. It is akin to saying that poverty must be completely eradicated from India before any industriali-sation can be attempted. The very first clarity needed is: what is news, and what part of media can be considered relevant to news? This clar-ity is required amongst those who really feel the pain of the stigma that might attach to them as a result of the paid news phenomenon.

The second issue is what has come to be called the busi-ness of journalism. It can be presented as the ques-tion: Is journalism a business, like any other business? This question also presents itself for some other human endea-vours, the prominent ones being education, healthcare and law. While all of these have become like any other business today, a cogent argu-ment can be made that these, including journalism, should not be like any other busi-ness as these seem to touch human lives much more inti-mately than many other hu-man endeavours.

The third major issue is blurring of lines between ownership and journalism, the phenomenon of journal-ists turning into owners of media businesses. Separa-tion of ownership and man-agement is an age-old con-cept in the management of large businesses, but it is fast becoming the bane of the

so-called media businesses. Another manifestation of this is the shifting sands of edito-rial freedom and control.

The legal perspectiveThe existing laws governing the Pressin India consist pri-marily of three enactments. The oldest is the Pressand Reg-istration of Books Act, 1867. Yes, 1867! While it defines editor to mean the person who controls the selection of the matter that is published in a newspaper [Section 1(1)], it uses the expressions printer and publisher freely along with editor, often sound-ing as if these expressions are freely interchangeable. While the Act does make a dis-tinction between the own-ers and the editor, printer, and publisher particularly in Section 19B, dealing with the Register of newspapers, it does not delineate well enough the duties, responsi-bilities, and rights of the edi-tor and the owner(s). In addi-tion, there is lack of clarity, in spite of many judicial rulings, including some by the Su-preme Court, about the locus standi of functionaries such as managing editor, resident editor, chief editor, editor-in-chief, features editor, sports editor, entertainment editor, op-ed page editor, edit page editor, and even response fea-tures editor!

Then came the Working Journalists and Other News-paper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955, which attempted to regulate cer-tain conditions of service of working journalists and other persons employed in news-paper establishments. Some of these conditions are mini-mum period of notice for fir-ing, gratuity, provident fund, hours of work and minimum wages. For example, sec-tion 3(2)(a) of the Act pro-vides that an editor has to

be given at least six months notice for removal from ser-vice. Section 2(f) defines a working journalist as a person whose principal avo-cation is that of a journalist and who is employed as such, either whole-time or part-time, in, or in relation to, one or more newspaper estab-lishments, and includes an editor, a leader-writer, news editor, sub-editor, feature-writer, copy-tester, report-er, correspondent, cartoon-ist, news-photographer and proof-reader It, thus, does expand the definition beyond the 1867 Act. However, given that many senior journalists choose to work with their em-ployers under fixed term con-tracts, they opt out of the pro-tection that can be accorded to them under the provisions of the Act. This was graphi-cally illustrated in a debate on Blurring the line between news & ads organised by the Foundation for Media Pro-fessionals in October 2009 where Chaitanya Kalbag, former editor of Hindustan Times, said he was sacked with half an hours notice.

The next is the PressCouncil Act, 1978, enacted in the af-terglow of the lifting of the in-famous Emergency, with the stated objective to preserve the freedom of the Pressand to maintain and improve the standards of newspapers and news agencies in India. Sec-tion 13(2) of the Act lays down 11 lofty functions for the Council, four of which are:

to ensure on the part of newspapers, news agencies and journalists, the mainte-nance of high standards of public taste and foster a due sense of both the rights and responsibilities of citizenship [Section 13(2)(c)];

to keep under review any development likely to restrict the supply and dissemination of news of public interest and importance [Section 13(2)(e)];

What then can be done, and by whom? The limitations of the Election Commission of India and the judiciary have already been enumerated elsewhere, leaving only the two main actors in the paid news drama: those who give money (or inducements in any way, shape, or form) and those who take itthe politicians and the media folks.



to promote a proper func-tional relationship among all classes of persons engaged in the production or publication of newspapers or in news agencies [Section 13(2)(h)];

to concern itself with de-velopments such as concen-tration of or other aspects of ownership of newspapers and news agencies which may affect the independence of the Press[Section 13(2)(i)].

There are two aspects of the

PressCouncil Act that need pointing out. One is, it says that the expressions edi-tor and newspaper have the same definitions respec-tively as given in the Pres-sand Registration of Books Act, 1867, and the Working Journalists and Other News-paper Employees (Condi-tions of Service) and Mis-cellaneous Provisions Act, 1955. These definitions come with all their limitations and

infirmities as mentioned above. The other is that if the Council has reason to believe that a newspaper or news agency has offended against the standards of jour-nalistic ethics or public taste or that an editor or a work-ing journalist has committed any professional misconduct, the Council maywarn, ad-monish or censure the news-paper, the news agency, the editor or the journalist or

disapprove the conduct of the editor or the journalist.., and that If the Council is of the opinion that it is necessary or expedient in the public inter-est to do so, it may require any newspaper to publish therein in such manner as the Council thinks fit, any particulars relating to any inquiry under this section [14(2)] against a newspaper or news agency, an editor or a journalist working therein,

In pursuing its quest for profits, it can be argued that certain media organiza-tions have sacrificed good journalistic practices and ethical norms. Individu-al transgressions -- reporters and cor-respondents being offered cash and

other incentives, namely paid-for junkets at home or abroad in return for favourable re-ports on a company or an individual were, until recently, considered more of an aberra-tion than a norm. News that was published in such a manner was suspect because of the fawning manner in which events/persons were described while the reports gave an im-pression of being objective and fair. The by-line of the journalist was stated upfront. Over the years such individual transgressions be-came institutionalised.

In the 1980s, after Sameer Jain became the executive head of Bennett, Coleman Compa-ny Limited (BCCL), publishers of the Times of India (TOI) group of publications, the rules of the Indian media game began to change. Be-sides initiating cut-throat cover-price compe-tition, marketing was used creatively to make BCCL one of the most profitable media con-glomerates in the country it currently earns more profit than the rest of the publishing industries in the country put together though as a corporate group, the STAR group has in recent years recorded a higher annual turn-over in particular years.

The media phenomenon that has caused considerable outrage of late has been BC-CLs 2003 decision to start a paid con-tent service called Medianet, which, for a price, openly offers to send journalists to cover product launches or personality-re-lated events. When competing newspapers pointed out the blatant violation of journal-istic ethics implicit in such a practice, BCCLs bosses argued that such advertorials were not appearing in newspapers like the TOI

itself, but only in the city-specific colour sup-plements that highlight society trivia rather than hard news. There was another, more blatant justification of this practice not just by BCCL but other media companies that em-ulated such a practice after BCCL started it. If public relations (PR) firms are already brib-ing journalists to ensure that coverage of their clients is carried, what was wrong then with eliminating the intermediary in this in-stance, the PR agency it was argued.

Besides Medianet, BCCL devised another innovative marketing and PR strategy. In 2005, ten companies, including Videocon India and Kinetic Motors, allotted unknown amounts of equity shares to BCCL as part of a deal to enable these firms to receive adver-tising space in BCCL-owned media ventures. The success of the scheme turned BCCL into one of the largest private equity investors in India. At the end of 2007, the media compa-ny boasted of investments in 140 companies in aviation, media, retail and entertainment, among other sectors, valued at an estimat-ed Rs 1,500 crore. According to an interview given by a senior BCCL representative (S. Sivakumar) to a website (medianama.com) in July 2008, the company had between 175 and 200 private treaty clients with an aver-age deal size of between Rs 15 crore and Rs 20 crore implying an aggregate investment that could vary between Rs 2,600 crore and Rs 4,000 crore.

It is a separate matter that the fall in stock-market indices in 2008 robbed some of the sheen off the private treaties scheme for the BCCL management. While the value of BCCLs holdings in partner companies came down, the media company had to meet its commitments to provide advertising space at old inflated valuations which also had to be shown as assessable taxable income for BCCL on which corporation tax is levied.

Even as the private treaties scheme was apparently aimed at undermining competi-tion to the TOI, a number of the newspapers competitors as well as television channels started similar schemes. The private trea-ties scheme pioneered in the Indian media by BCCL involves giving advertising space to private corporate entities/advertisers in ex-change for equity investment the company officially denies that it also provides favour-able editorial coverage to its private treaty clients and/or blacks out adverse comment against its clients.

While BCCL representatives denied receiving money for providing favourable editorial space, the integrity of news was compromised. In advertisements published in the Economic Times and the TOI celebrat-ing the success of the groups private treaties, on December 4, 2009, the Mum-bai edition of the newspapers published a half-page colour advertisement titled How to perform the Great Indian Rope Trick and cited the case of Pantaloon. What was being referred was how Pantaloons strategic partnership with the TOI group had paid off. The advertisement read: with the added advantage of being a media house, Times Private Treaties, went beyond the usual role of an investor by not straining the partners cash flows. It was because of the unparalleled advertising muscle of Indias leading media conglomerate. As Pantaloon furiously expanded, Times Private Treaties (TPT) ensured that (it) was never short on demand. The TPT has a better phrase for it -- business sense.

From the revised draft report of the sub-com-mittee of the Press Council of India, which the PCI has not put on even its website. In its own Report on Paid News, PCI says it may re-main on record as reference document.

What the Press Council doesnt want you to read


including the name of such newspaper, news agency, edi-tor or journalist.

The functioning and efficacy of the PressCouncil is illustrat-ed by its actions on the paid news phenomenon. One of its latest publications says, Realising the dangers of paid news to democracy as well as the right to freedom of expres-sion enshrined in Article 19 of the Constitution of India, on June 9, 2009, the PressCouncil of India appointed a sub-com-mittee comprising Shri Paran-joy Guha Thakurta and Shri Kalimekolam Sreenivas Reddy to examine the phenomenon of paid news observed during the last Lok Sabha electionsbased on inputs received from the members and others.' The two members met a cross-sec-tion of society in New Delhi, Mumbai and Hyderabad and also went through many let-ters and representations that were sent to the Council. The report of the sub-committee was discussed in detail by the PressCouncil in its two meet-ings held in Indore and New Delhi on March 31, 2010, and April 26, 2010, respective-ly. Members gave a number of suggestions and thereaf-ter, the PressCouncil of India chairman appointed a draft-ing committee to prepare a final report for the consider-ation of the Council.

The most efficacious way of describing the working of the PressCouncil is to quote a journalist who has been con-sistently researching and writ-ing on paid news, P Sainath. In the penultimate paragraph of a piece titled The Empire strikes backand how! on August 5, 2010, Sainath writes in The Hindu, The differenc-es between the full report of the sub-committee and the fi-nal report of the PressCoun-cil are many. The first (36,000 words) was based on pains-taking investigation, inqui-ry, research, interviews and

depositions. The second (less than 3,600 words) was based on hot air. In fact, little more than a group of people gutting an inquiry they did not work on and did not want. Any sub-stance it has is drawn from the original. For instance, the section on recommendations. The rest is a heavily-watered down, crudely amputated ver-sion of the real thing. Worse, this censorship carries the stigma of a very question-able vested interest: to con-ceal the names and identities of the main practitioners of paid news from the general public (see box on previous page). Thus a body entrusted with Preserving the freedom of the Pressand improving the standards of Pressin India has set an appalling standard. The guardian of Pressfreedom stands as an arbitrary censor of truthful journalism. It has acted less like the watchdog of the press that its ideals call for. And more like the lapdog of the powerful media owners who stood to be exposed by the report of its own sub-com-mittee. Indeed, the first signal of the PCI's action is to those powerful forces: don't worry, you're safe. We've fixed that (emphasis supplied).

What can be done?What then can be done, and by whom? The limitations of the Election Commission of India and the judiciary have already been enumerated elsewhere, leaving only the two main actors in the paid news drama: those who give money (or inducements in any way, shape, or form) and those who take itthe politi-cians and the media folks. The official response of the media is described above. At other levels there have been a vari-ety of initiatives by members of the media fraternity to at least show concern on this is-sue. The debate on Blurring the line between news & ads

organised by the Foundation for Media Professionals in Oc-tober 2009 has already been mentioned. The Editors Guild of India, the Indian Womens PressCorps, the PressAssocia-tion and others organised a seminar on paid news in New Delhi on March 13, 2010, which was attended by lead-ers of political parties, media representative, and others in-terested. At all such events, absence of owners of big me-dia seems conspicuous. This is illustrated by the experience of the Foundation for Media Professionals, An earlier at-tempt by FMP to debate the issue failed after the market-ing head of an organisation that had initiated the practice of private treaties backed out. Consequently two of the other paneliststhe owner of a reputed English news week-ly, and the proprietress of a newspaper groupdeclined. This suggests that media man-agers and owners do not want public scrutiny of a practice that they know is dodgy.

What has been referred to above as media folks is not a monolithic whole. It has several components that the three Acts mentioned above have attempted to distinguish and deal with differentially as these components have dif-ferent interests and compul-sions. But the Acts have not been able to do it effectively enough, particularly given the current state of what has now come to be called the media industry.

The media industry is con-trolled by the owners, editors-cum-owners, editors-cum-part owners (as stock holders) and several other categories, which can be grouped under the label media barons. It is these media barons that en-joy the fruits of activities such as paid news. The worst suf-ferers of the paid news stig-ma are those who are in the profession of journalism,

One solution may be to introduce internal democracy and financial transparency in political parties by law. But that will also need action in parliament by the political establishment, and is therefore unlikely. What is more likely is that the government will try to come up with another independent regulator and the media will shout about attacks on freedom of the press.



Ambika SoniWhile it is widely

agreed that it is not easy to find proof for such malprac-tices, there exists

strong circumstantial evi-dence (T)here is no deny-ing the fact that there is an urgent need to protect the right of citizens to correct and unbiased information. It is important that all sections of society should introspect on this issue as it has wide-rang-ing implications for our demo-cratic structure.

Arun JaitleyBut, here, we are predomi-

nantly concerned with the man-ner in which the practice is polluting the whole electoral process You are subverting one

of the basic features of Indias constitution which is the conduct of free and fair elec-tions, and, therefore, the entire exercise that is being done is a complete corruption of the electoral process and is a trade or a business with an unlawful purposeThere-fore, does the government of the day have the ability to stand up and say that this business or trade which threatens Indian democracy is going to be prohibited or not prohibited?

Sitaram Yechuri

(I)t is an issue that also concerns

the future of par-liamentary democ-racy in India The syndrome of paid news, actually, ne-gates Indias sys-tem of parliamen-tary democracy and undermines the very essence of journalism.

or what may be called journalists.

Journalists, those who feel and claim to be in the pro-fession of journalism, are thus pitted against the nexus of media barons and political class. The proclivity the politi-cal class has to form nexuses is widely known and can be seen in the enduring link-ages forged by the political class with the business com-munity and with the bureau-cracy. While there has been a clamour by the politicians against paid news, the fact re-mains that there cannot be, and could not have been, any paid news unless at least some politicians engaged in the practice. To say that Political parties and candidates are be-ing compelled to pay(Arun Jaitley, Rajya Sabha, March 5), and that there needs to be accountability on the part of media houses and journal-ists, (Sitaram Yechury, Rajya Sabha, March 5), sounds hol-low when seen in the light of the fact that only four out of

6,753 candidates reported, in the statement of expenses submitted by them to the Elec-tion Commission of India for the 2009 Lok Sabha elections, that they exceeded the pre-scribed limit of expenditure, and only 30 reported having spent between 90 to 100 per-cent of the limit. The aver-age expenditure was 50-55 percent of the limit, between Rs 12.5 lakh and 13.75 lakh against the limit of Rs 25 lakh. Obviously, there is something seriously wrong somewhere as Yechury also mentioned in the Rajya Sabha that, As per reports, the size of the paid news market in Andhra Pradesh in the elections in 2009 alone was over Rs 1,000 crore. In Maharashtra, which is the cradle of paid news, the size of the market has reached a figure of some thou-sands of crores.

Politicians of all hues speak unambiguously about the damaging effects of paid news. (For a sampler from the Rajya Sabha speeches, see the

box above.) However, no evi-dence of even an intention of taking any concrete action is forthcoming.

It has been observed that This situation is likely to continue as long as politi-cal parties are run as corpo-rate houses and elections are contested as campaigns to be won at any cost, including that of ideology. Seemingly, the pressures of competitive electoral politics prevent par-ties from coming together to reform themselves and the system. One solution may therefore be to introduce in-ternal democracy and finan-cial transparency in political parties by law, as suggested by the Law Commission of In-dia in its 170th report on elec-toral reforms, submitted in May 1999. But that will also need action in Parliament by the political establishment, and is therefore unlikely.

What is more likely is that the government will try to come up with another so-called independent regulator

and the media will shout about attacks on freedom of the press.

In the final analysis, the issue is of ownership and a sense of belonging. Those who re-ally own journalism and be-long to it will feel the most pressured into doing some-thing about it. Therefore, the divergent interests and mo-tivations of a diverse groups consisting of owners, media barons, TV anchors, and the like, who have a partial inter-est in journalism will have to be harmonised with those who are relatively pure journalists. And therefore it is the relative-ly pure journalists who have, or should have, a need to deal with the issue head on, and they need to do so quickly. n

Chhokar is former professor, dean and director in-charge of Indian Institute of Management, Ahmedabad, and a founding member of Association for Democratic Reforms and National Election Watch. [email protected]

What politicians say: Excerpts from Rajya Sabha speeches

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