What does Adani's entry into television news mean for the industry?

After acquiring more than 37% of NDTV's stake, the billionaire became the biggest shareholder of the news broadcaster.

Gautam Adani on Monday raised its stake in NDTV to more than 37% through an open offer, making it the biggest shareholder of the news broadcaster.

Although the conglomerate was looking to take another 26% stake in NDTV, at the end of the 13-day open offer, investors tendered only 5.32 million shares or a third of the open offer size of 16.7 million shares, translating to an 8.3% interest in the company.

AMG Media Network, a part of Adani Group, acquired RRPR, a holding company that owns 29% of NDTV. RRPR was backed by the television network's founders, Radhika and Prannoy Roy. Last week, they resigned from the company. With 32.3% stake in NDTV, they now remain its second-largest shareholder.

The conglomerate's takeover of the news network has raised concerns that one of the country's last bastions of free media is under threat. But beyond the channel, how will Adani's entry into the television news media space impact the overall genre?

Being a part of a $23-billion group, the channel will have a heavy inflow of organised capital.

Karan Taurani, senior vice president, Elara Capital, says it will be a good news for the news genre. He believes it will lead to the betterment of the industry and lead to its growth in terms of scale.

"The television news market is fragmented and the consumption of the genre has been hit with many consuming news on social media. Consolidation is the need of the hour. The growth rates are not great in the traditional industry. But it can improve with big conglomerates entering the market," he says.

Avinash Hegde, vice president, Lodestar, says it will impact the advertising revenue of the other leading channels. "Acquisition of NDTV would mean that it will now be invested and revamped. Leading news channels will be on a watch as it will impact their advertising investments," he says.

Deepak Netram, marketing consultant, Dreamforce Associates, is hopeful that as the space gets more competitive, the healthy competition will drive the growth for the news genre.

The corporatisation of Indian television news is not really a new development. In 2014, Mukesh Ambani's Reliance Industries began its acquisition of Network18.

Hegde suggests that corporate owning will bring change in its positioning and content, which will also drive advertising in a particular way.

"They may have a more formalised framework for content which is more appealing for advertisers. Investment and strong editorial opinion is key but with a corporate on board, more formalisation on the formats would also be brought in. For example, Ambani-owned News18 had a proper framework and they were more focused on making the content appealing for advertisers," he adds.

However, speaking on the condition of anonymity, an industry expert suggests that the heavy cash flow could also impact the viewership data. "We have already seen how cash-rich television channels can unfairly influence the television ratings. Like we have seen with the landing page issue, channels can simply buy eyeballs with such deep pockets," he says.

Dismissing these claims, Taurani says that Adani's entry is not going to change much in this age-old controversy.

"The rating impact will only be on the basis of the type of teams they are employing, the strategy they adopt and the kind of people they recruit," he adds.

Taurani believes that the deep pockets can help the channel scale its business and invest in new business initiatives.

"It has huge potential to expand its digital news. The channel hasn't monetised the full opportunity of its digital front. Investment in differentiated content or digital content requires deep pockets," he says.

Netram suggests that apart from the investment, Adani's can bring to NDTV new perspectives and initiatives. "This would work to upgrade and strengthen the entire platform across content, marketing and distribution. There is an opportunity to boost the Hindi and Business segments along with the Digital platforms. The group’s understanding of various sectors should also enable new avenues to open. All such efforts will drive the overall business," he says.

However, the challenge would be to hold on to the existing strengths, while progressing to the future. "NDTV 24x7 has enjoyed long-standing viewer loyalty and preference. Over time this has been a core strength and competitive advantage. It would be crucial to ensure that this valuable bastion continues to be a competitive advantage," he adds.