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Updated: September 9, 2013 04:06 IST

State of the economy impacts the state of the media

  • A. S. Panneerselvan
Comment (1)   ·   print   ·   T  T  
The Hindu

Much has been written about the watchdog role of the media. But, there is hardly any rigorous study about the relationship between the state of the economy and the state of the media. India is slowly moving into the election mode, and this means the media needs to offer extensive and exhaustive coverage of various issues concerning the largest democracy of the world. However, the largest democracy is also facing an economic crunch that is hurting the finances of the media industry. In a sense, we are in a catch-22 situation. We need more informed media to make our choices before the 2014 general election. But, the economic downturn has cast its shadow on the very functioning of the media.

In the beginning of the last decade, unlike the western media that faced a downward trend, the Indian media was on a growth mode. While many felt that India had bucked the global trend, some cautious observers felt that the Indian media was in a state of denial, unwilling to accept the fact that the global trend is bound to catch up, if not sooner, than certainly later. Most projections for the media’s growth were based on an average GDP growth of around eight per cent, year upon year. But the Indian economy snapped its growth path four years ago, and the slowdown is real and its impact is stark. According to the latest government figures, economic growth decelerated to 4.4 per cent in the April-June quarter of 2013, its slowest rate since the first three months of 2009.


The decline of the rupee against major currencies leading to a huge rise, by about 25 to 30 per cent, in the prices of imports is hurting the media industry as much as others. There are substantial imported components that go into the making of a newspaper, which include its newsprint, printing plates and printing ancillaries. Here, the cost has gone up by 25 per cent compared to last year. The logistics cost of moving the paper from the printing press to subscribers’ homes has gone up by 30 per cent due to the hike in diesel prices. These are some of the indicators of the increased expenditure.

Fall in revenue

The revenue side has also taken a beating. The fall in advertisement revenue has become a global phenomenon. For instance, in the United States, newspapers received $49.435 billion advertisement revenue in 2005. But now, total newspaper revenue from advertisement has plummeted to $22.314 billion, a drop of 55 per cent — as advertising collapsed in the print editions of newspapers and was not replaced by revenue from online advertising. In India, the drop is steep in specific sectors. The telecom sector has come down by 51 per cent, petroleum companies 35 per cent, finance seven per cent, and corporate advertisements by 19 per cent. And the overall drop is about 15 per cent.


How do these impact good journalistic practices? Can the media remain immune to the general economic crisis that has hit the country?

The biggest casualty is the job security for journalists. We witnessed the largest downsizing in recent media history when TV-18 Broadcast Limited terminated the services of about 350 employees, which is a nearly 30 per cent staff reduction. Bloomberg TV in India is planning a similar reduction of its staff strength. There was a bloodbath in the Outlook group of magazines earlier this year when it stopped producing the local editions of international magazine titles People, Geo and Marie Claire.

The second impact will be on news-gathering expenditure, which includes travelling, researching, hiring specialists and investment in new technologies. The travel and technology investments are generally put on hold when there is a squeeze on the budget. This means there will be less reporting from the far-flung rural areas. The essential hubs of news-gathering will crowd the urban centres where most newsrooms are located affecting reportage from the hinterland. This will also have an impact on sustained investigations that might require resource deployment.

Third, there may be a reduction in terms of volume of content. In televisions, channels may opt for repeating some programmes rather than producing original content. In print, there may be a reduction in the number of pages. The scarcity of the space will bring in its wake a process of elimination of news that is not ideal in an election year.

In this context, what should be done to protect the uninterrupted flow of credible, trustworthy information and the vibrant media culture from being overwhelmed by the economic woes? Scaling down seems to be an easy option. But it is suicidal. The approach lies in prioritising of the expenditure and not in imposing blanket austerity measures across the board that might actually eat into the vitals of a credible media environment. A judicious balance is the need of the hour.

There is no doubt newspapers face enormous difficulties in many countries all over the world and this crisis will come to India too and especially the economic meltdown makes the situation difficult for Indian newspapers. I live in Germany and would like to describe the difficulties German newspapers face. Germany´s large-circulation newspapers were once a guarantee of high-quality journalism. But with pressure from the internet circulations are dropping and so are editorial standard, some fear. Print media circulation is currently in a steep decline. Some newspapers have already disappeared altogether. Print and digital content have existed side-by-side for at least a decade, enhancing media variety in Germany – but now, a process of selection has begun. Mass information will be found almost entirely in the electronic media and I am of the opinion print newspapers are on their way to becoming a thing of the past. In the future , people would like to receive information wherever they are. Electronic assistance systems that automatically transmit user-specific information to smart phones will continue to become more important. Perhaps print media will in future become more of a luxury article that puts information into a context of opinion and analysis. There will no longer be a daily print edition, but a glossy magazine for the wealthy information elite – weekly, monthly, or quarterly. Printed background stories and analyses would thus complete the interactive information, updated daily, from the net. An example of this is the weekly top quality newspaper “Die Zeit,” which has been ringing up new print circulation records every week, despite the industry trend. The trend will be that qualitative journalism will be reduced to a niche product that is very expensive, but for which there is a target audience.
The newspaper crisis has also become a political issue in German politics, fuelled by trends in Britain and the United States. The US-based magazine “Newsweek” buried its print edition after 80 years due to poor circulation and is only available on the internet.
But there is still hope for the printed press in Germany; this will result in a long-term coexistence between online media and a sharply reduced but still powerful print sector, with the border between them even more blurred. How such a change will affect high-quality journalism will be decided by which business model comes to be adopted for reporting in the future. Paywalls for digital content on newspaper websites will be used more frequently.
Coming back to India and to The Hindu. I have been an avid reader of The Hindu for several years and I think there will be no other way for The Hindu to introduce a paywall in the coming years in order to deliver quality information and news.
The website of The Hindu is an example how to attract readers. Even The Statesman, published in Calcutta, redesigned its website.
Quality journalism has a great future in India, but without paywalls the survival of newspapers will be at risk even in India.

from:  kurt waschnig
Posted on: Sep 9, 2013 at 11:32 IST
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