Indian newspaper managers and owners never fail to complain that newspaper prices in India are among the lowest in the world. With most quality newsprint being imported and the landed cost of newsprint increasing over the years, the impact on circulation revenue with decreasing or stagnant cover costs can only be imagined. But this phenomenon where the readers have become used to paying a fraction of the total cost of newspapers ought to be of greater alarm to readers than to publishers.
The cost to publishers can be quantified. Rising newsprint costs with barely the distribution expenses being covered by the cover price means that an ever-greater percentage of the costs have to be absorbed by advertising revenue. This is such a truism that even the fact of pointing this out would be considered trivial. And yet, the repercussion of this for newspapers, readers, the market mechanism, and the democratic processes are not to be brushed away.
The single biggest casualty of this reliance, or more appropriately dependence, on advertising revenue is that those newspapers that are unable to garner an adequate share of the advertising pie cannot sustain themselves. With more and more means of spending the advertising budget, media planners are pressurized into demonstrating a causal relationship between the advertising rupee and sales. Since such direct causality between advertising and sales is at best a nebulous business, different ways of carving the pie to ensure maximum recall is used. With simple statistical techniques of reach and frequency, the largest circulation or read newspaper gets the biggest share. Once that reach is achieved using a single newspaper, the desire to use another newspaper becomes less. In such a media planning game, it is a winner takes all situation that emerges. With circulation data not easily amenable to appropriate checks and the readership data providing at best guesstimates, not to mention the deep contestation over data collection methods, analyses, and reportage, the highest circulated or read newspaper gets an unduly large share of the pie. Second newspapers attract some advertising. But those not among the top two get a sharply sliding share of the advertising spend. Editorial costs, if quality has to be maintained, cannot be dictated by circulation or ad revenue. But necessarily they have to be. As such the other newspapers are so badly hit that the newspaper scenario increasingly looks like the election model that we follow, which is that of first past the post rather than proportional representation. This leads to smaller newspapers working in precarious conditions and greatly dependent on either government revenue or some other form of patronage. At the same time the top newspapers begin to exclusively cater themselves to the advertising market forgetting that there is someone called the reader.
But for this the reader also has to share blame because he is so used to the blood of subsidy that comes in the form of newspapers costing the same as toilet rolls or just marginally more, that he has in many ways given away any leverage that could be enjoyed. The leverage that a consumer enjoys comes from voting with the purse. If a consumer refuses to buy a product then the producer necessarily has to either improve the product or in some way change the product to give it market acceptance. But if the cost of the product is subsidized and the consumer cannot exercise her right to stop using the product and in doing so impact the revenue of the producer, then there remains no incentive for the producer to cater to the market. The reader has taken to reduction in cost of newspaper with such enthusiasm that any suggestion that newspapers may cost more, say ten rupees, from tomorrow will attract alarm bordering on an urban panic. But if they choose to change newspapers it would not make much of an impact on the producers because unless there was a mass movement away from the newspaper that would be receive significant notice from media planners, newspapers can continue to either flourish or do significantly well. And the decline in circulation becomes cause for alarm only in the long term.
Closely aligned to this is that the market mechanism for a dual market product like a newspaper is skewed heavily towards one market to the detriment of the other market. Once the cover prices cannot even cover the distribution costs, newspapers become for all practical purposes a single use product. It is geared to the advertiser and advertising interest since the revenue and profits are both derived in the ability to sell ads, the other market has to be necessarily given short shrift. The usual measures that dictate the efficacy of the newspaper is not the satisfaction or reading pleasure that it provides the reader, but the cost per thousand, the reach, the demographics that it caters to for the advertiser. Now, such a measure would be perfectly fine if the newspapers were considered to be vehicles for the passageof advertising messages to readers, which is what some publishers would have us believe. And that too would be acceptable if the newspaper business did not demand, in both formal and informal ways, the protection and special support of the society and polity. Issues of press freedom, protection of journalists, key component of democracy are all connected not the relation of the newspaper with the advertiser, but with the reader. All contentions that are in some way related to the moral authority of the newspaper in the public realm come from the service that a newspaper provides the reader. But the publishing of the newspaper derives all its measures and operating logic from the relationship that it has with the advertiser. Now this is a conundrum of a dual market product. But the element that renders it not a dual but a single market product is the low cover price.
What we then have is a search for markets that will be able to sustain newspaper and an organizational imperative that would give greater prestige to the ad sales department and to some extent the circulation department to the neglect of editorial. Interestingly, what we see in these circumstances in India is not completely different from the penny press phenomenon, which made newspapers accessible to an ever-increasing literate population. But which did so in the most lurid fashion.
This low or insignificant power of the reader as consumer has its effect even in the democratic process. The first problem is that newspapers demand protection of their businesses in the name of the ostensible work that they do, which is the provision of information that is vital to democracy. But that is not done because the newspaper are run as conduits for advertising. The second problem is that democracy and democratic politics is not amenable to divvying up the population as markets. The task of business is to cater to markets that can bear to pay. The task of democracy is to cater to a population, however differentiated the public or publics may be. So newspapers that serve a population will have different standards than newspapers that cater to markets. Mark the low level of reporting on social issues from those areas where the markets are not drawn. The words of a senior publishing executive to a team of journalists that I heard are self-explanatory. Our readers live in relatively well-off areas, he was reported to have said, so if there is a breach in the mains or the drainage is leaking in that area then it is news, but if the same happens in areas that are poorer and hence not served by our newspaper, it is not news. Beyond a point one cannot quibble with this argument because a market, which does have a geographical basis that is commensurate with some key demographics and income indicators, defines the newspaper. Even for those living in the right neighbourhood the choice of stories would be dependent on whether one can cut that demographic into a market that is desirable for the advertisers. In this search for markets one has to cut up the population in financially significant ways to ensure that each subproduct or verticles as some would call it can bring in meaningful revenue. One of the interesting byproduct of this game are the zoned additions in newspaper, where advertisers in various parts of the city have forced newspapers to bring out tawdry sections that go by names like west side, north, suburb a, b, and c, and so on. The drive for this, hence, has not been from editorial department who may feel that some importance urban stories are not getting space in the regular newspaper but which need to be highlighted, but it is from advertising department who want to tap into an additional revenue stream. The problem, however, is the quality of editorial that one receives in these zoned additions. Since these are not even construed within editorial sections as a legitimate means of dissemination information about neighbourhoods, which in another country would be the same as that of a large city, the attention that they receive is less and senior journalists would not want to be consigned to the dustbin of zoned editions. The impact on civic participation and civic reporting that such editorial disdain would have can be imagined. But all this flows from the operating logic that is so overtly dependent on advertising and little or no support from the reading community.
The newspaper business can be made and unmade not as much by the readers as by the advertisers. Treating newspapers as a product that pays for itself with the waste price that it fetches along with the bucket, rice, or some such thing that is thrown in free with the subscription, means that readers have necessarily reduced themselves not only to the status of willing consumers, but of consumers sans sinews. It might be an exercise to go to a consumer court asking for adequate compensation against frivolous stories or erroneous stories that are published in newspapers. One can only imagine that a mildly intelligent legal counsel would conjure for the newspapers about the inappropriateness of a consumer court for a reader who considers herself so harmed. But the same would not happen if the reader was indeed paying a fair-price for the newspaper.Â
The case for raising newspaper prices is mostly made by publishers, and yet the sad thing is that it is something that ought to get notice from the readers. Some economist might wish this away as an example of a public good, where everyone wants it, or may be even needs it, but is not willing to pay. But there is a difference in providing an explanation of a phenomenon and understanding its normative significance. This silly business, even if its warms the cockles of the publisher’s heart, needs to stop. Let people learn to pay for the information that is useful for them. Let them value the information for the money that it is being paid. It is only under such circumstances that readers will become more discriminating in what they receive and will be more alert to changing their preferences if they feel that this credence good has failed them. The low cover charges are in fact an opiate that has so lulled and dulled the reader’s sensibilities that he is ready to receive any drivel that is sent his way. It is not a stupor that is conducive to the good health of the reader as consumer or as a citizen of a republic.
Appeared in Vidura.
