In the beginning was the Word, and the Word was with God, and the Word was God.

— John 1:1

Through history, smart guys who woke up to the real power of the word, went on to skilfully play the knowledge game, emerging as superstars on the field of time. You can see that in the words of philosophers, teachers, mavens, preachers, charlatans and conquerors of all kind who have erected humanity’s several babels ac­ross the planet, shaping the rise and fall of cultures and civilisations. Indeed!

Over millennia of human evolution, the word has manifested itself in different forms, first, of course, in space, and subsequently, in every available space — on sand, on mud, on cave walls, on stones, on beaten metal plaques, on palm leaf and on paper before bridging spaces in encrypted formats across the telegraph, the telephone, the radio, and more recently through the digital platforms across television, computer, touchscreen and internet.

Among those who understood its significance, perhaps, no one has deployed its power more astutely than the world’s richest man Bill Gates, who created an entire platform, the (Microsoft Office) Word, so that you and I could exchange the many words we chose to without hindrance, to bring sense to our otherwise humdrum lives. And in doing so, he sought to, and controlled, the word, at its very inception. Gates may since have been bested in the many technology platforms for delivery of the word across mediums; nevertheless the power of the word remains supreme.

Small wonder then that long before Gates woke up to that power, English adventurer and author Rudyard Kipling famously said, “Wo­rds are, of course, the most powerful drug used by ma­nkind.”

Why is that so?

The power of word lies in its ability to make each one of us exercise our discretionary choices. Through collective human memory, extraordinary guys have recognised and deployed this power to manipulate the discretionary choices of ordinary people, using the right word, at the right time, in the right context to run their writ over mankind, cajoling us, convincing us that their choices indeed were ours. Few do that better than the way advertisers do, riding diverse communication platforms. This is why advertising today is a $400 billion plus global industry, conservatively projected to grow to an estimated $550 billion five years from now, with China, India and LatAm driving its recent growth, anchoring far larger corporate bottom lines and, therefore, government finances. In the process, advertising is also spawning metacorporations around the likes of Google, Facebook and Twitter, each valued at hundreds of billion dollars on the strength of their advertisement revenue earning potential.

Despite its many traditions of word play down the ages, few in modern India have understood and manipulated the power of word as skilfully as the local media, not so much with the intent of shaping civilisations, as to help you and me make discretionary choices, and in the process, nurture a robust industry around the play of words.

To understand how important the delivery of right advertising, and therefore the right word, is to corporate bottom lines, and therefore, the media business, let me cite the case of India’s largest FMCG company. Hindustan Unilever alone spent Rs 2,796 crore on advertisements in FY ’11, helping it garner seven times as much (Rs 19,991 crore) from the sale of its products.

According to PwC’s latest report titled India Entertainment and Media Outlook, 2011, India recorded one of the world’s highest growth in entertainment and media industry of 11.2 per cent at Rs 64,600 crore in 2010 compared with Rs 58,080 crore the year before, with television accounting for 15.4 per cent growth and print 10.7 per cent.

The PwC report suggests that the advertising industry alone grew 14.3 per cent, at Rs 24,750 crore in 2010, up from Rs 16,080 crore in 2006. Print (as in newspapers and magazines) adve­rtisement cornered the bi­ggest slice at 46 per cent, followed closely by television at 41 per cent. But overall, wh­ereas print advertising grew from Rs 7,800 crore in 2006 to Rs 11,350 crore in 2010, television grew more dramatically from Rs 6,620 crore in 2006 to Rs 10,150 crore in 2010.

This subtle shift in advertiser choice while riding the power of the word from the written medium to its everyday spoken language was noticed early by English language newspaper major the Times of India group, that has, over the years, designed the principles and practices on which much of India’s contemporary media businesses are run.

Almost seven years ago, the Times resolved that the print industry, largely funded on advertisement revenue, was on the decline worldwide, with access to digital and online media getting cheaper with their wider and deeper penetration, and breakthroughs in compression technology. While Ti­mes itself ventured into television and digital platforms, the group, having spent ye­ars building a sound business model on print, was unwilling to jettison publishing in favour of broadcasting.

Yet, alarmed at the prospect of losing its grip on the word, the Times launched the private treaties initiative, placing a higher premium on aggregating revenue-generating advertisements than on the dissemination of expense-consuming news.

In effecting this tectonic shift in the way media businesses were managed, the Times argued that private treaties would help breed a new generation of advertisers in the market who would otherwise not advertise either because of lack of conviction or owing to paucity of financial resources. It pl­anned to rope them in by extending cash free advertising, which meant investing in the equity capital of these companies in return for them consuming advertisement space in Times publications.

In taking this gamble, the Times bet that potential advertisers could be drugged by the power of the word into becoming future big-ticket spenders. As with other precedents, the Times mo­del has since been emulated by its several media counterparts, both in the print and television space.

Yet, with the Times being in the private domain, it is difficult to hazard a guess on how much that strategy has really worked. What is kn­own in the public domain is that the Times has sunk a billion dollars (over Rs 5,000 crore at the present exchange rate) of its own hard-earned cash as equity infusion in 400 companies wh­ich may or may not have posted indeterminable returns.

As with many things, the private treaties model would, perhaps, remain unquestioned and closed to external scrutiny had not the tables turned very recently on the Times.

Mukesh Ambani’s foray into television space, first by quietly acquiring regional entertainment television giant ETV, and now securing financial interest in the news and entertainment channels of Network 18, becomes a case of a potential big ticket advertiser itself controlling the pipeline that wields the power of the word.

So, is Mukesh Ambani, India’s richest business ma­gnate posing to be India’s biggest media baron? While I’m not privy to Ambani’s personal ambitions, his me­dia foray may have as little to do with the business of journalism as much as it may have to do with controlling the destiny of a nation of 1.2 billion people, and in the process, secure his influence over their discretionary choices.

Available figures suggest that, between them, Network 18 and the ETV network may be controlling advertisement revenues of only Rs 600 crore at the most. Network 18, a publicly-traded company generated advertisement and subscription income of only about Rs 237 crore in FY 11. Ushodaya Enterprises (a privately held entity that until now owned the ETV channels) reportedly generated advertisement revenue of no more than Rs 322 crore from its broadcast business for FY09, according to information that is privately available. And while it may be true that their combined influence now under a single (Network 18) management will be far more dominant in the media space, even its rapid growth would at best generate paltry returns for Ambani’s Rs 266,000 crore industrial enterprise for many more years to come.

What then is the Ambani gambit?

Ambani, the smart guy that he is, recognised that today’s consumer is only interested in engaging the wo­rd on a platform of his cho­ice, at a time of his choosing. It is no longer what is necessarily delivered at his doo­rstep every morning as a matter of habit. The rules of engaging the word have changed with the times (no pun intended). The messenger himself can manipulate the discretionary power only as much as the receiver equally can.

In making his broadcast foray, a small part of a much larger broadband gameplan riding the 4G spectrum, Ambani has understood well what Kipling, and the phi­losophers, and poets and preachers and charlatans before him have known all along: “Words are, of course, the most powerful drug used by mankind.”

In administering that drug and seeming to em­power you and me in exe­rcising our discretionary ch­oices, Ambani can only aspire to play god.

(The views of the author are entirely his own and do not in any way represent the views of the management of this paper. Details of the Times group’s private treaties mentioned in this article are available in the public domain. Financial Chronicle, its sister publications, and the group corporate entity Deccan Chronicle Holdings Ltd do not practice the private treaties initiative nor do they subscribe to the business practices of any other media entity in the country or abroad.)