Even for a time when a newspaper is more spectacle than information source, the Delhi edition of the Times of India (TOI) on 30 January this year was remarkable, featuring stories on its front page so outlandish that a reader’s first impression would have been of a day of dedication to tomfoolery, to compete with the hoary antiquity of All Fools’ Day. Readers who managed to negotiate the length of the page and arrive at its anchor space were rewarded with an answer to the mystery. TOI, it transpired, had engineered a harmless hoax to jolt its readership into an awareness of the multitude of possibilities that the future held in store. Underlining its intention to think beyond the limitations of the present, the paper had datelined its issue for the year 2025.
TOI’s stated purpose with the 30 January issue was to drive the agenda of transforming Delhi from a rather slovenly, unkempt city, into a true world metropolis. Together with this foray into the consciousness of the capital city, the TOI group (otherwise known by its formal corporate appellation of Bennett, Coleman and Company Ltd., or BCCL) also announced Times Now, a satellite television channel covering news and current affairs. Launched in association with the international news agency Reuters, Times Now came as the finale of a rapid process of diversification that had seen the group venture into FM radio, music publishing and retailing, internet commerce, and the lifestyle and entertainment segments of satellite TV broadcasting. By extending its reach into the final frontiers, the company was fully geared to consolidate its position as India’s dominant media entity, leveraging its strengths in print, television and radio for the ultimate in commercial synergy.
TOI has solidly established credentials for being in step with future trends. When other newspapers were mired in old habits of thought, clinging to outdated beliefs that they served a public purpose, TOI boldly proclaimed its exclusive devotion to the commercial calculus. It tided over the storm of derision that followed, squeezing out the last rupee of advertising revenue available in the market. And it succeeded not merely in maximising advertising revenue yield, but even in sharply boosting circulation and profitability. It is a measure of the company’s success that it has managed this entire process of growth and diversification without diluting its ownership, still retaining the character of family control that has for long been an entrenched, seemingly eternal feature of the Indian media.
Right to free advertisement
Freedom of the press is, of course, an inviolable principle, of benefit especially to those who own one. In the more enlightened debates that have taken place around the issue, freedom is necessarily balanced by a notion of responsibility. And in maintaining the uneasy balance between information as commerce and information as a basic human entitlement, the emphasis has been not so much on curbing the business of the press as on ensuring the sustenance of sufficient diversity in the press. A liberal democracy, though, allows for few institutional restraints on the functioning of the media, leaving the marketplace of ideas as the final arbiter.
Yet the issue has cropped up periodically in public policy debates in India. In 2003, the Standing Committee on Information Technology in the Indian Parliament urged the government to prescribe a “ratio for coverage of news contents and advertisements in newspapers”. This was considered necessary, since, “a tendency is being noticed in the leading newspapers to provide more and more space for advertisements at the cost of news items.”
For its part, the government responded with a plea of inability, given the judicial precedents on the issue. For those immersed in the culture of neo-liberalism, these seemingly outlandish policy options may seem the exclusive domain of politicians operating in a milieu of power without responsibility. That would be a misperception, since the idea of a ‘price-page schedule’ (see below) has been a part of the public debate on the Indian media for decades, and its proponents have included many with vital interests in the newspaper industry. The awareness is well-developed that, unlike in most other industries, price competition in the media could be antithetical to consumer interest. So too is the belief that newspapers as a public institution require the controlling hand of public policy, when self-discipline fails.
As a policy instrument, the ‘price-page schedule’ was put forward by the First Press Commission, appointed in 1952, which was India’s first official exercise in evolving a theory of the media in society. Without undue fuss, this body went to the core issue in newspaper economics, recommending that certain norms on the allocation of space between editorial matter and ads be enforced as a means of preserving the press as a diverse institution. Guided by these findings, Parliament in 1956 passed into law the Newspapers (Price and Page) Act, which sought to regulate the price of a newspaper in accordance with the number of pages it offered, and to oversee its allocation of space between editorial and advertisement content.
In 1962, in the case of Sakal Newspapers v the Union of India, the Supreme Court found the price-page schedule to be in violation of Article 19 of the Indian Constitution, which enshrines the rights to both free expression and commerce. Handing down its ruling, the court found that the order took away the freedom of the newspaper to charge whatever price it chose, constricted its ability to disseminate news and opinions, and cut into its commercial fortunes by limiting advertising space.
With the benefit of hindsight, it could be pointed out that the relationship between circulation and advertisement revenue is not quite as neat as the Supreme Court believed it to be. Ad revenue is dependent not merely on gross circulation, but, more crucially, on the demographic composition of the audience itself. In 1996, the TOI proudly proclaimed that it had crossed the magical threshold of a million in circulation. But in the breathless ardour of this achievement, it did not quite inform readers how its printing presses were sustaining this output, when every additional copy was being sold at a price rapidly plunging below the cost of production. The simple answer was that the paper had, through its conquest of the ad market, assembled enough of a war chest to be able to ramp up its financially draining output, and to reach those segments of the populace that were of the most intense interest to advertisers.
The situation was the exact opposite of what the Supreme Court had considered in the Sakal case: not of a newspaper being forced to raise prices because it was deprived of advertisement space, but of a newspaper able to slash prices and drive out competition because of the pre-eminent position it had managed to establish in the bazaar for advertisements.
These particularities of the media market have long engaged the public, which is part of the reason why the price-page schedule as an instrument of regulation retained a significant degree of appeal for years after it was deemed unlawful. Judgments about its utility, however, have been influenced by contingent factors. In 1965, a Committee on Small Newspapers upheld the price-page schedule as a legitimate device of protection of the right to free speech. But in 1975, the Fact Finding Committee on Newspaper Economics thought it to be of little use. That was a time of acute newsprint shortage, when the commodity was selling at a massive premium. Under the circumstances, few newspapers had an incentive to raise page numbers to offer a wider menu to readers. Advertisement revenue was simply not adequate to support the expenditure involved in printing those additional pages. Yet the Fact Finding Committee did agree that a statutory ratio between advertisement and editorial space would serve the public interest.
The issue was revisited by the Second Press Commission, appointed in 1978, which argued that the price-page schedule did not amount to an abridgment of Article 19 freedoms. On the contrary, the Commission concluded, the objectives “being [the] promotion of competition and prevention of monopoly, the law will advance freedom of speech and expression”.
Marketing ‘all ideas’
This provides the context for grappling with another significant judicial intervention in interpreting the right of free speech, one that came in a case involving the TOI group. At hand was a government notification, issued in a situation of acute newsprint scarcity, limiting the allotment of the commodity to newspaper publishers. In October 1972, the Supreme Court decided that the order was in violation of the Constitution, in that it imposed unreasonable restrictions on free speech. The judgment in the case of Bennett, Coleman and Company Ltd v the Union of India is of historic significance, since it lays out a whole range of norms on the exercise of the right of free expression. In addressing the issue, the court seemed to oscillate between a notion of free speech as a privilege that is enjoyed by the few, and a broader conception in which the unreserved exercise of the right by all would inevitably engender conflicts in the use of scarce resources.
Without unduly burdening themselves with facts, the majority of the bench that decided the Bennett, Coleman case concluded that “the press is not exposed to any mischief of monopolistic combination”. Of special significance in this context, however, was the lone dissenting judgment by Justice K K Mathew. Rather than blandly ruling it out, Justice Mathew explicitly conceded the possibility of a conflict between the public interest and the profit motivations of the press as a commercial institution. Using a “theory of the freedom of speech” that essentially viewed it in terms of twin entitlements – to speak and to be informed – the judge observed that, as a constitutional principle, “freedom of the press” was “no higher than the freedom of speech of a citizen”.
What was essential under the circumstances, Justice Mathew wrote, was to evolve “an affirmative theory underlying freedom of expression”, and to attend to the “various conditions essential to maintaining a workable system”. The problem was in bringing “all ideas into the market [to] make the freedom of speech a live one having its roots in reality”. In pursuit of this ideal, it was first necessary to recognise “that the right of expression is somewhat thin if it can be exercised only on the sufferance of the managers of the leading newspapers.”
In the years that followed, newsprint allocation was the single most important lever of control that the government exercised. But in 1995, in response to persistent pressures from the newspaper industry, newsprint import was deregulated. The immediate context was a rapid, 70 percent rise in the price of newsprint between October 1994 and April 1995.
Cover price dominoes
Whether by coincidence or design, TOI’s aggressive foray into the national capital – which till then had been considered safe ground for the Hindustan Times (HT) – happened at a time when newsprint prices were on an upward trajectory, and already engendering some commercial distress for even the bigger newspapers. According to TOI’s official story, it had stayed at a moderate level of circulation in Delhi for a longish period, and was merely experimenting with changing price variables. In March 1994, the newspaper sharply cut its selling price from INR 2.40 to 1.50, except for Friday’s issue. To guard against a catastrophic drain of revenue, the Friday price was raised to INR 6, but soon cut back to 2.90.
By early-May, the results were distinctly promising. But an unexpected hitch arose from another quarter. Newspaper vendors, a powerful lobby in Delhi, were worried about a potential loss of income, since their fees were computed as a fixed percentage of the paper’s cover price. To assuage these worries, TOI agreed on an ad hoc basis to increase the vendors’ fees from 25 percent to almost 40 percent. It is unclear whether an assurance to revert to the old pricing scheme and eliminate these contingent measures was also conveyed. But three months into the new deal, vendor organisations, claiming a breach of commercial agreement, began a boycott of the TOI. For weeks on end, the street corners where newspapers were bundled for daily distribution resembled battle zones, and vendors managed to disrupt every effort to distribute the TOI. An injunction obtained from the Delhi High Court served little purpose against raw muscle power. Editorial columns in both the TOI and the HT became the medium through which this battle of ideas, such as it was, was fought.
The newspaper scenario was transformed beyond recognition by the time the peace was established. Apart from the HT, two other newspapers, the Indian Express and Pioneer, felt compelled to match the TOI’s offering by way of cover price. With all newspapers published in Delhi facing a massive drain of circulation revenue, the race began in earnest for the conquest of those demographic segments among the city’s English-reading audience that would be of maximum interest to the advertisers.
Needless to say, the TOI emerged the winner. It could not have been otherwise, since by 1994 the TOI had long since internalised the most significant rule of competition. Simply put, the advertiser was king, and the readership, no longer a burden to be borne, a distant abstraction with little immediacy to the newspaper except as a shopping entity.
A recent chronicle of the Indian media industry records that the history of the country’s press can be written in terms of one particularly significant point of inflection. The print industry, long mired in romantic recollections of its contribution to the Indian freedom struggle, was only shaken out of its reverie by Samir Jain, current TOI boss, who entered his family’s business as a decisive player around the mid-1980s. According to this account, Jain’s achievement was to use “simple marketing principles and good business sense to transform a down-in-the-dumps publishing company into a profit machine”.
It is a testament to its essential simplicity that the same strategy, when deployed in Hyderabad in 2000, encountered rather stiff opposition. Both The Hindu and the Deccan Chronicle, with longer established bonds in the city, pre-emptively slashed prices to retain and even increase their market shares. Price competition had evidently reached the limits of its potential in expanding market share. The focus then shifted to the demographic character of the audience.
Paradoxically, those segments of the newspaper-reading public that put much emphasis on price are relatively less important to advertisers. The TOI marketing strategy then devolved upon a simple principle: to bring that segment of the populace with high purchasing power into the gaze of the price-sensitive buyer. It was the decade of globalisation, when the cult of the celebrity acquired unparalleled proportions, and the celebration of the good life of the few became a source of vicarious delight for the many. Instrumental in the creation of this ethos was the TOI.
The TOI had always been strongly entrenched in Bombay, home also to most of the country’s principal advertisement agencies. Enjoying a near monopoly in this market for decades, the TOI by 1994 was estimated to have an advertisement ratio – measured as the proportion of total printed area devoted to ads – of 55 percent. In comparison, the HT in Delhi and The Hindu in Madras enjoyed much more modest ratios, in the lower 40s. This was the initial advantage that endowed the TOI with the confidence to launch a price war against HT in Delhi. The war chest assembled in Bombay was being deployed in the conquest of the next most lucrative market in India.
The gains of the price war would have proved ephemeral, if the TOI had not recognised that celebrity narcissism was the wave of the future. The newspaper’s distinction was in being significantly ahead of the curve when it came to adapting editorial content to fit advertiser needs. Beginning in the mid-1990s, the TOI began a shift of content towards fashion, lifestyle and entertainment that had its loyal readership thoroughly flummoxed. But even as many among the older audience cancelled their subscriptions, the newspaper succeeded in attracting new readers from previously unexplored segments of the population. The results were dramatic.
On 22 December 2003, TOI readers began their day with a veritable display of triumphalism. Blazoned across the front page of the newspaper was a message of thanks to the Delhi readership, which had supposedly made TOI the city’s premier newspaper. And just as important as the aggregate figures was the composition of the audience. “Over three-fourths” of its readers, proclaimed the paper, were in “the highest socio-economic category”; “almost a fourth” were “executives, businessmen, [and] self-employed professionals”; and the newspaper had established itself as the “clear choice” of the youth, with an estimated 40 percent of its readers below 24 years of age.
The financial performance of the Indian media is difficult to monitor, but figures uncovered by The Hoot, a website specialising in media matters, are little short of astounding. In 2001, for instance, BCCL was the “second most profitable unlisted company in India”, recording a net profit of nearly INR 2.1 billion, well over twice the figure registered the previous year. In comparison, other media companies turned in distinctly anaemic performances – and the weakest, expectedly, came from the newspaper that had suffered the misfortune of encountering the TOI at its most aggressive. HT’s net profits in 2001 were down by over 96 percent – at INR 5.8 million, the company seemed to be rapidly plunging into the red.
It took some years before HT found its way out of the woods. In August 2005, the paper, which had been among the most ardent naysayers when it came to foreign direct investment in the print media, came out with an initial public offering of shares. In an analysis of the offering, The Hindu Business Line reported that the HT bottom-line had improved for a variety of reasons. These included the fact that advertisement rates had been raised in both March and May 2005, and that the HT and TOI had agreed on a concerted rise in cover price of about 30 percent. The “price-cuts that hurt profitability”, the analyst concluded, appeared “to be a story of the past”.
With the declaration of truce, the two media giants evidently accepted an uneasy coexistence. In terms of content and target audience, they now seemed cloned from the same cell. But the media landscape in which the peace was established was a very different place. Several of the newspapers that used to offer competing menus and priorities right up to the early 1990s were now hollowed out financially, compelled to reach ever deeper to appease politicians and advertisers merely to bring out a day’s edition. BCCL itself ended its decade-and-a-half of rapid commercial growth with a much leaner portfolio of publications. Its daily newspapers in English were far and away the leaders of their respective market segments. But several other prestigious mastheads – including, in English, the Illustrated Weekly of India and Science Today, and in Hindi, Dinmaan, Dharmyug and the Navbharat Times edition in Lucknow – had passed into history.
The transformation of advertisement and circulation also meant initiating radical changes in the editorial function, which had to adapt itself to the new imperatives of providing a hospitable environment for advertisers to display their wares. Previous editorial priorities had to yield to demands for entertainment and celebrity lifestyles. In short, increasing profits were achieved through a palpable loss of media diversity and seriousness. That the ends of consumer sovereignty have not been served by the price war in the newspaper market, nor by the aggressive advertisement-oriented strategy of the TOI group, is a conclusion that, for many, seems unavoidable.