http://www.newindpress.com/NewsItems.asp?ID=IEB20070926232144&Page=B&Headline=Consolidation+is+key+to+survival+in+media+industry&Title=Business&Topic=0
BUSINESS Sep 27, 2007 Consolidation is key to survival in media industry Thursday September 27 2007 09:43 IST Gyanendra Kumar Kashyap/Business & Economy News Bureau NEW DELHI: If you can't beat them, buy them. ...This seems to be the latest mantra that's spreading across the media industry like wildfire. Just like all industries across the globe reeling under the pressure to consolidate in order to maintain competitiveness, the media industry too could not be a mere spectator or an exception to the trend. Rupert Murdoch & Dow Jones, Microsoft Corp & Yahoo Inc and Reuters & Thomson have been on the headlines globally. A similar trend seems to have taken the fancy of media moguls in India. Slowly and steadily the Indian media industry is heading for diversification, the long term goal undoubtedly being that of consolidation. On a global platform, the trend seems to have been initiated by News Corp's move which sparked of a wave of megamergers and Thomson followed suit. May it be the unsolicited bid or the rumour or the speculation alone is evidence of the buying frenzy sweeping across an industry where no deal seems unfathomable, and all are coming with nine zeroes attached. Traditional companies in India are feeling threatened and it is time companies across the length and breadth of the country bring about a change in their mindset. The logic behind such fanatic moves are comprehensible for even a novice- the point is not the profits and revenues, it's the size, scale, infrastructure, brand name and the image that stimulates such revolutionary action - oriented thought processes. The buying extravaganza in the media industry started when the so called media moguls began their buying sprees by gobbling smaller counterparts. Carrying the 'mad buy season' forward, the giants are now buying each other! Advanced technology and superior content have been the much touted reasons for acquisitions. Companies have adopted a clear cut strategy; either build subscribers who are willing to pay for information or build mass audiences that can be sold to advertisers at a premium. Media behemoths argue that they need more freedom to consolidate their businesses in an increasingly competitive market whereas consumer groups, independent content producers, journalists, and other players in media and entertainment argue that consolidation is killing creativity and diversity. Global coverage, technological dynamism and mass customisation have become more of a necessity due to increase in the segmentation amongst the media customers. Thus, it is very evident that the need for convergence has necessitated consolidation. Meanwhile there are opinions which speak out the degradation of the media ecosystem. The byproducts of consolidation stretch beyond compression of salaries and erosion of working conditions to threatening the standards of professionalism in journalism and broadcasting. It is believed that except for the owners of conglomerate no one else benefits from the concentration of media as today the bottom-line of corporate media is supposedly profit and not content. But when behemoths queue up for consolidation; they must be looking beyond bottom- line and certainly on the content. There is going to be a scenario of continued consolidation whereby big media companies will continue to get bigger. The lurking danger calls for smaller players to take a hard look at the existing market developments for survival.
