PLPDG Lecture Series: Siddharth Varadarajan

The Public Law and Policy Discussion Group on Monday hosted Siddharth Varadarajan, eminent journalist and founder of the Wire, to speak on the topic “New Age Media: Journalistic Freedom on the Internet”.

Mr. Varadarajan began the talk by announcing that he would be expounding on his view on the current state of journalism in India. He talked about how the Wire, his independent news website, was a product of his frustration with the media, and of a year and half of discussion and debate about how to best tackle the issue.

Statistically, he said, the Indian media may appear to be healthy and vibrant – with lots of channels and newspapers in many different languages. There are over 800 dailies, and newspapers open new branches incessantly. Hindi papers that were earlier confined to a single state now publish across the Hindi belt.

But the numbers are misleading. Nobody focuses on the business model behind the numbers. Mr. Varadarajan talked about how virtually no TV news channel made a profit, apart from perhaps Aaj Tak and ETV, and how most of them relied on cross-ups – taking money from entertainment branches of the same network – or by engaging in unethical practices.

Newspapers are more profitable, he explained, but profits are concentrated in the hands of the market leaders. For example, the Hindu is profitable in Chennai, while the second-most popular newspaper, the Times of India, has to be subsidized by its other branches.

With regard to newspapers, the primary purpose is ostensibly the creation of a paper that is sold to the readers; but in reality, the readers are charged a fraction of the costs of production. The marginal revenue from each copy sold is negative. How does a newspaper make a profit then? Primarily from advertising revenue. Around the world, the general division of profits of newspapers is around 60% from ad revenue, and the rest from the paper’s cover price; in India, the ratio is closer to 90%-10%. The ratio is never this skewed in a mature market. The proportion of advertisements in newspapers is steadily rising.

In Pakistan, for example, newspapers sell for the equivalent of Rs. 10-15; however, circulation is much lower, barely a fraction of what Indian newspapers have, something which cannot be solely attributed to the fact that the nation has a smaller population. The general affordability of Indian newspapers is important, but it comes at a price. Mr. Varadarajan pointed out how Samuel Jain, the owner of the Times of India, once said that people purchased the Times of India to read its advertisements, and Vineet Jain, the co-owner of the paper, once, in an interview with the New Yorker, stated that the Times of India was in the advertising business, not the media business. When papers are this dependent on ads, then depressed market conditions cause their ad revenue to drop. There are only two options – either you charge readers more, which will lead to a fall in the total number of subscribers, which will lead to a further drop in advertising revenue. The second option with them is that they try to realise money from non-advertising space – essentially, news-space. This was the origin of the practice of unreliable reporting.

Mr. Varadarajan defined “unreliable reporting” as when papers carried biased news for money. For example, the clear propaganda spewed by many news outlets during election time. This was even mentioned in a Press Council of India report, which was made public under the tenure of Justice Marakandey Katju.

Paid news constitutes an offence from the point of view of the Election Commission, but is not considered an offence as far as newspapers are concerned. There is no law governing the Indian media, except that of defamation, and to some extent this is a good thing: regulations are a slippery slope, and placing restrictions on the media now can snowball into something far worse. But the readers have a right to know about the kind of news that they are reading. The Delhi Times earlier carried paid articles for reviews and promotional features. Now they’ve added a tiny disclaimer in order to ostensibly prevent any miscommunication.

While there is disclosure in the supplement, there is no such disclosure in the actual paper. A paid version of a piece praising BT Cotton (funded by Monsanto) was recently featured as a news piece in a particular edition of the Times of India. According to Mr. Varadarajan, both the Times of India and the Hindustan Times deny the existence of private treaties with regard to news space.

Many media houses have secondary or tertiary interests. The Hindustan Times earns a greater share of its profits from mutual funds than it does from print. The Times of India has significant crossholdings; apart from being the biggest player in newsprint, it is also a large player in TV news and radio. Most Indian media business houses have significant interest in non-media fields, and this starts having an effect on the quality of the stories that are published, because conflicting interests suppress news articles.

Mr. Varadarajan further said that the current model involved zero dependence on readers, and lots of reliance on advertisements. This is worse when the advertisements involved are government ads. He talked about how the Hindu was usually critical of the Central government, but was relatively more lenient with regard to the Tamil Nadu government. He went on to say that when he originally took over as editor, he wanted to equalize their treatment, but almost immediately found several defamation cases registered against him. Ad revenue also dropped significantly, a trend that could be seen across newspapers: TATA refused to advertise in the Economic Times, Jindal has an ongoing feud with Zee, etc.

Mr. Varadarajan went on to talk about his time working at the Times of India, reminiscing about how one of the personnel from the advertising department once complained about the front page not having more “happy” news, talking about how that acted as an impediment to advertisers. A company like Rolex, for example, would not be comfortable advertising luxury watches on the front page right next to a headline about starvation deaths, and this ended up negatively impacting revenue.

He went on to talk about how both newspapers and TV channels were cutting back on reporters on the ground, and focusing on discussion programmes and editorializing, leading to more sensationalization. Almost all of these ills can be traced back to the basic economic model on the basis of which media houses now operate.

He further said that he had observed a long-term downturn in the media industry, especially in the last year, where editors had been sitting on the fence because of the perceived hostility of the new government. The editors don’t want to risk offending the government any further. Important legislative decisions have been sidelined. Fringe elements are brought in, and controversial tropics are avoided. For example, the CBI dropping Amit Shah’s case charges would have normally led to massive discussion on the issue, but there had been hardly anything. There is no debate about the muzzling of the CBI at all. Since last year, there is a deliberate move towards this kind of behavior.

And this isn’t just restricted to the media – this can be seen with films, books, plays, and other art forms. Mr. Varadarajan termed this a “closing in of the mind”, an extremely negative process. This was why he decided to start a website: The Wire.

He and the other founders wanted to be financially independent. They realized that they couldn’t install a paywall; readers as readers would never pay, but readers as concerned citizens would be more amenable to the idea of contributing. People who cared about free media, who realized that if they didn’t pay then someone else (read: corporates) will, and that the quality of news will be compromised, would be interested in contributing and maintaining The Wire.

Thus far, he said, he and the others had been very gratified by the number of supporters. They are contemplating adding reportage to their purview soon, something which they have as yet been unable to do because of the lack of funds to hire reporters, but that that is definitely in their game plan, as is sending those reporters across the nation and the world; the latter because they believe that it is important to look at the world through Indian eyes.

Mr. Varadarajan entered his talk by observing that he and his co-founders were not alone – a lot of journalists had started similar projects. This, he said, was leading to a vibrant ecosystem of Indian reportage, which would eventually grow to be a serious challenge to the lazy media.


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