How the Supreme Court, over decades, established news media’s right to ad revenue

Among those spearheading the fight for it was the Times Group in the 1970s.

WrittenBy:Anand Vardhan
Date:
The Supreme Court with a picture of a TOI story on print ad revenue.
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Last week, The Times of India reported that advertisement flow to India’s print media is expected to show seven percent growth in 2024, a record level of rise that exceeds even pre-pandemic levels. As a market leader in print ad revenue, Bennett, Coleman and Company Ltd, the media conglomerate that owns TOI, often pitches the advantages of print as a steady, credible medium for advertising, even as it continues to pull a growing number of advertisers. One almost forgets that BCCL has significant presence in TV and digital news as well, the other claimants on ad revenue.

Interestingly, much before the 1990s when BCCL is generally perceived to have led the rise in media ads, the company fought a constitutional battle in 1972 to assert its right to carry ads. It won, with a landmark verdict in the Supreme Court. More significantly, the Supreme Court verdict placed a newspaper’s right to earn ad revenue in the larger frame of a constitutional right, making it integral to the right to circulate. This, in turn, placed it as part of the fundamental right to freedom of speech and expression under Article 19(1)(a) of the Constitution.

In essence, the Supreme Court viewed the right of the media – primarily newspapers at the time – to earn through ads and reach more readers as an enabling right that was intrinsic to the fundamental right to freedom of speech and expression. The verdict was a seminal judicial affirmation and set a strong precedent for future cases related to the media’s right to earn ad revenue.

The case, Bennet Coleman & Co. vs. Union of India, had its origins in the media group’s challenge to the union government’s newsprint policy under which the Newsprint Control Order of 1962 imposed new restrictions in 1972. In the backdrop of suspension of US aid and the resultant reduction in the import of newsprint, the government’s rationing policy required newspapers to limit themselves to a prescribed number of pages. The government argued that the move was also to promote small newspapers and curb the monopolistic hold of larger ones.

While challenging such restrictions, BCCL gave several grounds on which such provisions curtailed constitutional rights. One of them was that the limit on the number of pages would adversely affect advertisements and the number of editions, thereby infringing its right to circulate.

In its verdict, the Supreme Court took serious note of this factor and agreed with the core of BCCL’s argument. In striking down the Newsprint Control Order, the court was of the view that these orders do not qualify as grounds of reasonable restriction that Article 19(2) placed on fundamental rights under Article 19(1)(a). The court held that the freedom of the press – an inferred right under Article 19(1)(a) – included the right to circulate.

“Freedom of the press is both qualitative and quantitative,” it held. “Freedom lies both in circulation and in content.”

More significantly, by applying the direct effect test, the court recognised the vital role of ad revenue in a newspaper’s capacity to circulate and financially sustain itself. It also recognised that any restriction in this regard adversely affected constitutional rights. The court reached this conclusion through a reasoning of interrelationships. As the verdict noted: 

“The direct effect is the restriction upon circulation of newspapers. The direct effect is that newspapers are deprived of their area of advertisement. The direct effect is that they are exposed to financial loss. The direct effect is that freedom of speech and expression is infringed”. 

Some parts of this reasoning are reminders of the court’s verdict in another important case a decade before, in Sakal Papers Pvt. Ltd vs. Union of India in 1962. In that case, the newspaper’s proprietor challenged the constitutional validity of the Newspapers (Price and Page) Act of 1956 which, among other things, sought to control the allocation of space for advertisements. The court found it to be a violation of fundamental rights under Article 19(1). In its verdict, it said: 

“If the area of advertisements is curtailed the price of the newspaper will be forced up. If that happens, the circulation will inevitably go down. This would be no remote, but a direct consequence of curtailment of advertisements…When a law is intended to bring about this result, there would be a direct interference with the right of freedom of speech and expression guaranteed under Article 19(1)(a).”

Other cases 

In the mid-1980s, the Supreme Court also delivered a verdict – The Indian Express Newspapers (Bombay) Pvt. Ltd vs. Union of India, 1985 – on whether commercial advertisements can be given protection under Article 19(1)(a). Here, the court took a wider application and clarified the flawed interpretation of its verdict in Hamdard Dawakhana vs. Union of India in 1960.

In the latter case, the court decided on a challenge to the Drugs and Magical Remedies (Objectionable Advertisements) Act of 1954. In its judgement, the court held that commercial advertisements, guided by the motive of commercial gain, do not have such protections. But in The Indian Express case of 1985, the Supreme Court did not agree with the general applicability of such reasoning and limited it to be seen in the context of only a prohibited type of products. The court held that “all commercial advertisements cannot be denied the protection of Article 19(1)(a) merely because they are issued by businessmen”.

In the 1990s, the landmark case of Tata Press Ltd vs. MTNL of 1995 again showed the Supreme Court’s clear view in favour of treating the right of publications to carry advertisements and the right of advertisers to commercial speech as part of the fundamental right to speech and expression guaranteed by the Constitution. 

However, specific to the news media, it was at the turn of the century that the importance of the right of newspapers to carry ads and earn ad revenues was reiterated in Hindustan Times vs. State of Uttar Pradesh in 2003. The verdict in this case emphasised the significance of ad revenue in realising a newspaper’s right to circulate and, therefore, is part of fundamental freedom.

The case was a result of the HT group challenging a UP government order asking for a five percent cut in bills (for carrying government advertisements) to be paid to newspapers that had a circulation of over 25,000 copies. The Supreme Court struck down the order as unconstitutional and held that advertisements are crucial for ensuring the circulation of newspapers as well as making it possible for readers to buy their copies at a reasonable price.

So, in these verdicts ranging from 1962 to 1972 to 2003, the Supreme Court was emphatic in ensuring that the right to circulate, with the right to ad revenues to enable it, is part of the constitutional right to freedom of speech and expression. The value attached to promoting the cause of circulation in these verdicts reminds one of the task of extending the public sphere – a phrase that German thinker Jurgen Habermas used in his study of the growth of mass media forms in Europe since the 18th century.

It seems evident that in the early decades following the enforcement of the Constitution, the Supreme Court regarded expanding circulation as a prime challenge confronting media freedom. In her work Facets of Media Law, Madhavi Goradia Divan, a senior advocate in the Supreme Court, wrote: 

“In the early years of the Republic, the challenge was to ensure that the right to free speech was guaranteed by the right to the widest circulation (Sakal Papers and Bennett Coleman cases, for example). In those years the concern was that the State should not impose restrictions which have a direct impact on the freedom to circulate and reach out to as wide an audience as possible.”

But there is an element of irony in how policy challenges shifted in the altered media scene brought about by technological transformations, in which the word ‘circulation’ acquired a different context. As Divan wrote:

“After the onset of the technological revolution and the resultant indiscriminate dissemination of information, the challenge shifted to protecting personal data and communication and limiting their circulation. The right to restrict circulation, the right to informational self-determination- aspects of privacy, have become integral conditions of free speech inherent in Article 19(1)(a)”. 

More than five decades after BCCL won the landmark case that ensured the news media’s right to carry ads and earn ad revenue, the company continues to spearhead print ad earnings. In a vastly different economy and even more transformed media scene, this is a fight that brought richer dividends to the news media business after the opening up of the economy in the last three decades. The fact that BCCL’s flagship brand, The Times of India, is elated over the projected record growth of print ad revenue this year is a signal of continuity amid the melee of change in the media market. 

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