Mixed Media: Why the Government mustn’t bail out the print media

The Minister of State for Information and Broadcasting has promised the print media a stimulus to beat the slowdown. But before offering tax payer monies by way of sops, the Government must impose a pre-condition, writes Pradyuman Maheshwari.

e4m by Pradyuman Maheshwari
Published: Feb 9, 2009 6:52 AM  | 5 min read
Mixed Media:  Why the Government mustn’t bail out the print media

No, you haven’t read the headline wrong. I do strongly feel the Finance and Information and Broadcasting Ministries mustn’t bail out the print media.

If the print sector finds itself in a mess, it has itself to blame. And asking the Government for succour is incorrect.

Last Saturday’s delegation, led by Indian Express’ Shekhar Gupta, HT’s Shobhana Bhartia, and TN Ninan of Business Standard met with Minister of State for Information and Broadcasting Anand Sharma and Directorate of Advertising and Visual Publicity (DAVP) Director-General Neelam Kapoor, one of the many meetings that printwallahs have had with the Government over the last year.

The reason: they believe the slowdown is making life miserable for them, and they need help from the Government. Relief in what form? The Minister refused to divulge details of what the Government was considering, but the presence of the DAVP chief indicated better ad rates for Government inserts.

Newsprint prices, which constitute more than half the cost of producing a newspaper, did shoot up last year – by around 60 per cent since 2007. Hence, with effect from September 1, 2008, the DAVP decided to revise its rates by 24 per cent, apart from easing a few other norms. And have things changed for print owners since the late September announcement?

For one, the slowdown is impacting print full throttle and it put up a dismal financial performance in the crucial Diwali-New Year quarter. But imported newsprint prices have dipped 25 per cent since January and the desi variety is cheaper. The Government pays newspapers horribly lower than what others would for advertisements via DAVP, and I don’t think that’s cool. But the fact of the matter is that newspaper-owners still court them, given that there is always some spare inventory. So, why then do I not want the Government to bail out the print media? Because I think most of the mess is self-created, and the Minister must ensure that newspaper owners clean up their act before asking for alms.

First off, newspapers must increase their cover price. The only reason why papers are tagged at nearly a tenth of their cost of production is because they fear that no one will buy them as their rivals may be cheaper. Hence, they are heavily dependent on advertising to take care of costs. This has gone up even more in recent times, where competition in the key cities has made the newspaper near-free. It started in the Capital with The Times of India and Hindustan Times, and moved to Mumbai when Hindustan Times and DNA entered the market.

Second, newspapers have been expanding and hiring indiscriminately. While I must confess at having been a beneficiary of this, many decisions do make you wonder whether there was any logic in the business plans. Until now, newspapers have lived beyond their means. Part of the problem was created by the buoyant economy and the competition from television media. But, I feel people did get carried away.

Third, newspapers have been late in waking up to competition from other media. While China and India may have bucked the international trend of falling newspaper readership, it’s a matter of time when people will stop buying the newspaper in the form we see it today. It’s got to be accessible off websites, the mobile, social networks, Twitter… everything. Most newspaper sites are shovelware – stuff from the print edition is bunged into the website with daytime updates from the wires. If owners and editors do not embrace the new media fast enough, the younger entities with presence in online media could soon be the media of choice for the younger, affluent decision-maker – the all-important Sec A Indian that everyone seeks.

There’s not much that the Government can do about the second and third points here, but surely it must insist that newspapers up their cover price. Since it is taxpayer money that’s going to make life easier for media barons, the hike must be made conditional on cover price being commensurate with the size of the publication and the geographical areas it circulates in.

So, The Times of India and Hindustan Times we see in Delhi and Mumbai must be priced at a minimum of Rs 10, possibly Rs 15, with the pink papers and magazines even pricier. I’m sure newspapers won’t trust each other to keep rates at that level, but if the Government offers sops only if they bring the sale price to realistic levels, then perhaps the papers will fall in line.

Do I think Anand Sharma will dare to do this to the newspaper owners? In an election year, I don’t think the Manmohan Singh Government will have the courage to make such a bold move. But we are living in activist times, and alert citizens (bloggers included) can make the Government think twice before offering the print media a stimulus package, which I don’t think it fully deserves.

(The views expressed here are my own. Email mixedmedia@exchange4media.com if you agree/disagree with what’s written.)

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