Look, even I want some good news. I really do. Unfortunately, India continues to be tested. But not where it matters—which is Covid-19. Cases are rising while testing numbers appear to be plateauing. Then, there was the tragedy of what happened to India’s soldiers at Galwan Valley. Sigh.
Please be safe. Take care.
Let’s dive in.
Business, Governments and Society vs. Media
Perhaps you’ve noticed, but one thing that the Covid-19 pandemic seems to have done is accelerate three shifts.
First, businesses are getting more powerful, particularly Big Tech.
Some of this is obvious. Advertising spends are down across the board, but Google seems unaffected. Facebook continues to grow and dominate. Apple continues to squeeze smaller companies without any regard for malice or mercy. And we are finding out just how powerful Amazon really is. It’s not just these companies. Just look at the NASDAQ-100 Technology index.
Second, governments are using this as an opportunity to accumulate power, all in the name of public health.
This is also fairly obvious, not just in China, US or India, but in countries across the world.
In Hungary, after a set of measures introduced on Monday, it is now a criminal offence to spread misinformation about coronavirus, and the prime minister, Viktor Orbán, can rule by decree for an indefinite period. In neighbouring Serbia, soldiers patrol the streets as part of the coronavirus response plan. In Moscow, authorities are reportedly mulling measures that would require everyone who wants to go outside to submit the reasons online, and then be tracked via their smartphones.
Authoritarian leaders may use Covid-19 crisis to tighten their grip, The Guardian
Authoritarian leaders may use Covid-19 crisis to tighten their grip, Guardian
Third, society has moved closer to relying on digital networks more than ever
Zoom calls. The rise of edtech. TikTok. Subscriptions.
I mean, all fairly obvious.
It struck me that the entity that seems to be scrunched in the middle is legacy media i.e., Old Media, or mostly ad-funded media outlets, including the digital ones. Old Media has been locked in a perpetual, dynamic war for decades—first it was the war between the physical world and the digital world, then it was the war for your click, then a war for your time, and now in its final phase, it’s a war for your trust.
Remember that traditional media has to achieve three goals:
- Succeed as a business
- Act as a counter to the power of the state
- Be useful to society
Basically, all of the media’s opponents have simultaneously become emboldened due to the Covid-19 pandemic. This is new. Usually one of these forces gets power and then retreats. Sometimes the state gets more powerful. Then it fades. Then a revenue model comes under question. Then someone figures out something. All ebbs and flows, like any other business.
What has never happened before is everyone getting powerful at the same time, this quickly.
Let’s examine how.
The war against Big Tech
I’ll start with a story. Not from India or Southeast Asia.
But from Australia.
Media everywhere is struggling to make money against Facebook and Google. It’s no different in Australia. So what did Australia’s media companies do? In August 2018, they got together and told Facebook, ‘Look, let’s talk. Let’s make this work together’.
Facebook, on its part, appeared to take this seriously. It sent Campbell Brown, Facebook’s head of news partnerships, to meet these media companies. Brown is a media person. She used to be a news anchor on NBC, and later CNN. She even won awards for her reporting on Hurricane Katrina. Brown knows what publishers are facing. She’s seen it first-hand.
Brown flies down to Australia. Over 20 media companies are in the meeting. It goes on for four hours.
And then…
A senior Facebook executive has privately admitted Mark Zuckerberg “doesn’t care” about publishers and warned that if they did not work with the social media giant, “I’ll be holding your hands with your dying business like in a hospice”.
‘Work with Facebook or die’: Mark Zuckerberg, The Australian
Of course, Facebook denied making those comments. The Australian claimed it had five sources who corroborated the news.
Soon enough, like everywhere else in the world, Facebook came under investigation in Australia for violating competition laws. Then, the Covid-19 pandemic hit. Newspapers and media outlets in Australia cut jobs. And the calls became more urgent—do something about Facebook and Google. And do it now. The Australian Competition and Consumer Commission decided to create a code of conduct.
One of the points that was proposed was that if Facebook and Google were places where consumers discovered news, then maybe Facebook and Google ought to share some of that sweet, sweet ad-revenue with them.
Google said, ‘ummm…no’.
So did Facebook.
In fact, last week they went one step further.
In its response to an Australian Competition and Consumer Commission (ACCC) consultation, the social media giant described news content as “highly substitutable” in commercial terms.
The company also hinted that it could choose to charge publishers to use its services, claiming “any value that we receive from publishers is outweighed by the significant costs and investment that we make in news relative to this direct and indirect value”.
Facebook joins Google in rejecting Australia’s ‘pay for news’ proposal, telling publishers: You need us more than we need you
Basically, Facebook was saying, ‘You’ll take money from us? No! We’ll take money from you first!’ It even went on to say that even if you forced Facebook not to link to news outlets, it wouldn’t mind, because news is such a small component of Facebook’s traffic.
This is a novel argument, and I wonder if Facebook would’ve picked such a bold stance in any other environment.
Then…
India’s Media vs China
The tragedy in Galwan Valley last week led to an acceleration of another nascent, but fast-developing sentiment—an anti-China stance. A popular suggestion seemed to be ‘let’s not give them any money’. Let’s boycott all Chinese goods and products. Of course, some pointed out that trying to restrict trade with China would hurt India more.
India’s media, especially television news channels, love such events. It’s an opportunity to wrap the flag around themselves, and promise dire consequences on television. A national sport. Everyone watches. Remember, there are no movies, so television news becomes a more mainstream form of entertainment.
Except…it’s a little tricky this time.
Because it’s not really clear what is a Chinese product.
And how far do we go to ban which products.
Plus, television news is a little…vulnerable.
Do you know how much Vivo spent last year on advertising in India? The Chinese phone brand shelled out around Rs 700 crore and jumped two ranks to number seven in 2019 from rank nine in 2018.
In 2018 too, the company was among the top 10 advertisers and had spent as much as Rs 650 crore.
In 2019, there was a new entrant on the top 10 advertisers list, and that was Oppo, another Chinese brand, which spent as much as Rs 600 crore on advertising in India.
Call to boycott Chinese goods gets louder; but what about advertising sector?, Moneycontrol
There’s more…
The top 50 advertisers spent 78 percent of their budgets on television and digital combined.
“Almost 80 percent of the top 10 spenders in mobiles are the Chinese brands…. Oppo, Vivo, OnePlus, Xiaomi. They have displaced others such as Micromax and Karbonn. The Chinese have invested heavily in marketing especially in cricket for great visibility,” said Sandeep Goyal, Chairman, Mogae Media.
Oops. The media’s moment is finally here, and it can’t do much, not at the risk of losing more money—which is in short supply, or audience trust— which is scarcer still.
Of course, even the Chinese companies are wrapping themselves in the Indian flag, which makes things even more complicated. Xiaomi, for instance, claims it’s an Indian company because 99% of the phones are manufactured in India, even though the parent company which sees the revenue is a Chinese one. Does that make Xiaomi Indian? Or Chinese?
Also, mobile phone companies who want to show they are Indian need a way to signal that. And the best way to do that is through advertisements. Maybe on the front page of newspapers. Like what Oppo did during the cricket world cup last year.
Complicated times.
Over to Rohin for the last confrontation.
Governments.
Wither, fourth estate?
If there has ever been a time in all of our individual and collective memories when the role of the “fourth estate” has been as crucial to the future of entire societies, democracies and economies, it is now.
Sadly, this is also the time large swathes of the (nominally) free press in Asia are coming to terms with the rapid unravelling of ad-funded business models nurtured over decades. And in the process leaving them dependent on the very powers—corporations and governments—they’re supposed to keep in check.
Indian newspapers had been hit by a faltering economy even before the pandemic, but N Ram, a director of the group that publishes The Hindu daily and other regional papers, said events had become critical as advertising has “collapsed”.
The group expects to lose millions of dollars.
“We don’t know when the advertising market will recover,” he told AFP.
[…]
According to the World Association of Newspapers and News Publishers (WAN-IFRA), Indian newspapers and magazines used to attract about US$3 billion dollars of advertising a year.
Magdoom Mohamed, WAN-IFRA business development manager in India, said newspapers lost 75-85 per cent of their advertising in March and April alone.
And as revenue collapsed, edition closures, mass layoffs and salary cuts have become inevitable. Shantanu Guha Ray, a veteran journalist and India editor of Central European News, captured the Indian media’s dire straits in a long article earlier this week. An expert quoted in the story suggests that sackings could reach 55-60% across all forms of Indian media if the current vicious cycle isn’t arrested.
It’s a long piece, but well worth your time if you’d like to understand the dynamics of a country with “over 5,000 newspapers, over a thousand magazines and 450 news channels, besides 2,000 news portals.”
With private advertising largely drying up, the one source that could still provide sustenance is the government, both central and state.
But right from the start of 2020, advertising revenues started showing a dangerous, downward slide. And now, it has come to a trickle. The government at the Centre has cash, it spends a little over ₹1500 crore on advertisements per year. So do governments in the states. But there is a catch: Any negative reporting about the government means the cash tap could be switched off. In short, if you are solely dependent on government advertisement revenue, your independence — the foundation of journalism — will go for a toss.
Here are four full-page state government advertisements this year in the Times of India, India’s largest English newspaper—Gujarat, Uttar Pradesh, Delhi and Karnataka.
I quote further from Guha Ray’s story.
A senior editor of a top newspaper recounted how he drew flak after he used an eight column banner headline for a health related issue severely impacting his city. The chief minister of the state did not like the headline and there were fears of government advertisements drying up. Worse, the editor was hounded by his colleagues who wanted him not to write such provocative headlines. “For you it is a headline, for us it is our survival. If the advertisements stop, our salaries will not come,” the reporters pleaded with the editor.
“I could not sleep that night,” the editor told me during a recent conversation at his residence.
In case you missed it, we made an announcement on Monday. Starting from 1 July, The Nutgraf and Beyond The First Order will go behind a paywall. While premium subscribers will still have access, others can purchase a subscription to The Nutgraf separately—at Rs. 99/month from India or $2/month from overseas. The links should be up soon.
I’m quite excited. This is just the first step. We have lots of plans.
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