Posted by: John Elliott | September 20, 2008

India opens up for The Economist, Time, Newsweek, Fortune and others

At last the Indian government has begun to take a sane approach over foreign news publications being allowed to publish and print in the country – it announced on Thursday that foreign news magazines can come, though sadly not yet newspapers.

Previously this has been blocked by vested interests in general news and current affairs publishing that have not wanted to face India-based foreign competition for readers, advertising and staff in either newspapers or magazines. (Foreign general interest publications have been allowed for some time.)

Those vested interests are mainly big publishing houses such as the Times of India’s Bennett Coleman group, plus one or two more ideological lobbyists such as N.Ram of the Hindu group, and the political Left.

The reason (excuse would be a better word) has been that Indian minds should be protected from such foreign influence – an insulting idea at any time, and a nonsense in an era of rolling international tv news and the internet.

As a result, till this week, foreign news publications could only publish and print facsimile copies of an edition published abroad. This has meant that they have not been allowed to insert Indian advertising into a local edition, which has made such editions financially unviable. The alternative has been to produce a new publication, with a maximum 26% foreign direct investment (FDI) but with only 20% of the editorial content from abroad.

Consequently most stayed away, with some exceptions, as people tested the policy.

Three foreign daily newspapers have appeared here in different forms, and one has failed:

– The Asian Age and Deccan Chronicle group has been publishing a slimmed down version of the International Herald Tribune for some time from Hyderabad, basically busting the policy but uninterrupted by the government which did not seem to know how to stop it.

– The India Today group last year launched Mail Today with 26% FDI from publishers of the UK’s Daily Mail, producing a lively look-alike of the UK product, primarily with local content but with some from the UK.

– The Wall Street Journal has helped (without any FDI) to produce the HT Media group’s excellent business daily, Mint, which was launched last year with restricted content from the Journal and has raised the bar for Indian standards of business journalism.

– The Financial Times tried from the mid-1980s to establish itself – first through a relationship, and then a 13.85% equity stake, in the Business Standard. It also tried to print a foreign edition. But it was blocked on both counts by supposed-friends as well as foes.

Among magazines, Fortune and Forbes have both been in talks for a year or so with Aveek Sarkar of Calcutta’s ABP (Anand Bazaar Patrika) group and TV-18’s Network-18 group to produce their publications. Till this week, these would have had to have 80% local content and different titles, and it would have been extremely difficult for them to produce magazines that matched their US versions.

That will now change. The government’s statement said that news magazines editorial “content would be allowed to be up to 100% identical to the foreign magazine concerned and the India publisher would be free to add local content……and local advertisements.” Foreign titles are also being allowed.

That dramatically changes the commercial viability of opening up in India, even though some of the old rules will still apply – the publishers will have to be Indian registered companies holding no more than 26% foreign equity, with the businesses and editing run primarily by Indian nationals.

So Fortune and Forbes can use their foreign titles and have as much foreign content and local advertising as they like.
 
Watch out for The Economist, Time, Newsweek and Business Week moving in too. Some will editionalise for India. Others, presumably including The Economist that produces the same edition (slightly rearranged) all over the world, will not.

I wonder if this would have happened if the Communist-led Left Front were still supporting the Congress-led government! They were a front for commercial interests and have lost their clout.

Freed of those shackles, the government announcement said: “The decision will provide Indian readers access to foreign magazines at cheaper rates in comparison to the same magazines imported at much higher rates. The Indian reader would be benefited immensely as he/she would be able to keep abreast with the latest events and happenings on the global scale”.

Isn’t it amazing that the government has suddenly discovered this! The next step should be to allow foreign newspapers – soon.


Responses

  1. thanks Manish – to ABP in Calcutta I guess, but it’ll take awhile!
    je

  2. Yes. Everything has to be Indianised first. Just imagine Mac with beef or pork. They too had to change the menu for the locals. The newspapers would bring in a fresh look to the mornings but it should be moderated to look and feel Indian first. Controls are everywhere but to go around them is also possible. We wish all of them success! I sincerely hope that they would show how to compete to the local media.

  3. So where do I send my subscription form for Fortune Mag India?


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