In this article, Muhammad Ziauddin explains the flaws in media industry's business model that led to 3000 plus journalists being removed from their jobs since August 2018 and also discusses the emergence of new media that may open new avenues for journalists and newsrooms if they succeed in adapting to its demands.
The media industry is under the knife. But it is the workers not the owners who are paying the price in terms of their jobs and professionalism. According to a rough estimate as many as 3000 plus journalists are said to have been thrown out of jobs since August last year.
One major TV channel (Waqt TV) and a number of editions of Jang newspaper (Peshawar, Faisalabad and Multan) and the daily Express are said to have been shut down; besides a number of periodicals, newspapers and TV channels could be on the verge of closing down or trying to survive by massive downsizing.
https://www.youtube.com/watch?v=FVuL4xhlRq0
However, except for a few whose financial management had not been all that efficient, most major newspapers and leading TV channels are said be suffering from nothing more than marginal reductions in their margins. And a couple in the industry are said to have made so much out of a highly lucrative 71-year old business model that they could survive the knife for decades without having to downsize or close down their off-market editions.
The business model of almost the entire media industry while being highly profitable had, however, remained too vulnerable all these 71 years. To begin with, their margins, except for a couple of newspapers and TV channels, had remained too dependent on government advertisements which many received without having any significant reach---readership-wise or viewership-wise.
Until about the time broadcast media was thrown open to the private sector in 2000 along with the lifting of the cross-media ownership law, there were three major newspaper groups in the country---Jang Group, Nawa-i-Waqat Group and the Dawn Group. All the three started their own channels as well. Very soon one saw a boom in the media industry as some members of corporate sector started launching their own TV channels. Some even started newspapers along with TV channels. These new players from the corporate sector were investing in the media industry not so much for financial profits as for the political clout they stood to acquire in the bargain. For them media industry was a source for promoting their respective social and political standings. Nor were they too much concerned about their media ventures’ integrity and credibility aspects---essential ingredients for building professionally sound ethical media vehicles. As a result, very soon the office of a professional editor and genuine gate keepers disappeared from private TV channels. Virtually the owners took over the job of the editor as well as that of the gate keepers.
https://www.youtube.com/watch?v=9G5iq8xE7HQ
Most of the new entrants from corporate sector had no patience for these self-imposed ethical limitations and performance criteria that separate this public service industry from the other essentially money making undertakings. This led to the industry as a whole losing its standing in society within a matter of a decade. From a purely public service industry most of it had degenerated into political agenda setting industry.
Currently the government has more than halved its media advertisement budget while at the same time the state has turned the tables on the media’s political clout rendering it powerless in the face of dictated editorial policies being conveyed verbally by sources too cloak-and-dagger to be named.
The fact of the matter is, those who buy newspapers don’t pay the full cost of the product which at least would be three times its cover price and of even this nearly half of the lowly cover price goes to the distributors. In the case of TV channels, the owners get nothing for the programmes they churn out round the clock, seven days a week. It is the cable operators who pocket what is paid by the consumers.
So, the media industries’ dependence on advertisement is understandable. But the country’s advertisement cake has never been big enough to cater to the number of daily newspapers and periodicals and TV channels in business.
https://www.youtube.com/watch?v=sJcxbvakwC8
The advertisement cake is said to have expanded from Rs. 66.9 billion in 2015 to Rs. 76.2 billion in 2016 and to Rs. 87 billion in 2017. The share of TV is estimated to have increased from Rs. 33.6 billion in 2015 to Rs. 38 billion in 2016 and to Rs. 42 billion in 2017. The share of print during this period has been Rs. 16.1 billion, Rs. 18 billion and Rs. 20 billion respectively. The share of Radio and digital media has remained negligible all these three years with the latter, however, expanding at an accelerated pace. But over the last quarter of 2018, this cake has shrunken considerably due to the new government’s highly restrictive media advertising policy as well as because the overall national economy has entered a stagnant mode.
Advertising revenues of most of media houses are falling steeply and as a result many of these enterprises are claiming that they were finding it increasingly difficult to sustain. Already one TV channel has been shut down. This crisis is being used by media ventures as an excuse for what is called ‘right sizing’ which means firing of staff.
What is happening in the media industry is the long awaited and anticipated correction. But a forced and abrupt one. Indeed, all those doomsday predictions that were being made ever since the birth of private electronic media some two decades ago are coming true. The bubble, it appears, has finally burst.
The newspaper industry on the other hand is being threatened by the growing challenge from the digital media which is attracting the ads that traditionally went to print media. Most newspapers are trying to keep afloat by cutting down on pages and shedding staff.
https://www.youtube.com/watch?v=XVg6Q5koF7E
All this is not happening because of the PTI government. This was waiting to happen and the PTI government hastened the fall by not only slashing the government’s advertisement budget but also by refusing to pay the advertisement arrears accumulated during the PML-N government.
Indeed, the federal and provincial governments, especially of Punjab and Sindh, have in recent years heavily spent their way into the list of top 10 print media advertisers along with commercial banks, telcos, real estate developers, FMCG firms, food companies, etc.
Meanwhile, as economic uncertainty began to bite due to currency devaluations and the economic indecisiveness of the new government, the commercial advertisers also began cutting their advertising budgets.
Most media business watchers were well aware that the government of the day was actually subsidising news channels for several years by buying air time at a much higher rate — said to be around three times higher than the rate charged from a private company for the same duration and slot. This unearned bounty has suddenly disappeared.
In recent months, the state and its different organs have been seen to have brought pressure on media owners using government ads to ‘discipline’ them.
https://www.youtube.com/watch?v=nXO3fgs94Gs
What, however, is surprising is that new TV channels are still being launched in spite of the financial crunch gripping the industry.
Further, the rise of internet and emergence of new means for advertisers to reach their target audience is said to be diverting increasingly advertisements from the conventional TV and print media to social media. The size of the advertising cake has increased over the years, but so has the number of claimants. The competition for advertising income has increased sharply.
Meanwhile, the number of people using smartphones now exceeds the number of TV screens in the country. So, it’s not just economics that is affecting the industry. Audiences are turning away. Younger people are looking at other platforms for information and entertainment.
Both the newsroom and the journalist will have to change to meet this new challenge. Newsrooms cannot restrict themselves to one medium or language. Neither can journalists. Most journalists will now have to reinvent themselves, improve their skills to be able to report for different platforms. They will have to immerse themselves in social media in a bid to connect to their new audiences. News will change in the manner it is made and delivered.
The media industry is under the knife. But it is the workers not the owners who are paying the price in terms of their jobs and professionalism. According to a rough estimate as many as 3000 plus journalists are said to have been thrown out of jobs since August last year.
One major TV channel (Waqt TV) and a number of editions of Jang newspaper (Peshawar, Faisalabad and Multan) and the daily Express are said to have been shut down; besides a number of periodicals, newspapers and TV channels could be on the verge of closing down or trying to survive by massive downsizing.
https://www.youtube.com/watch?v=FVuL4xhlRq0
However, except for a few whose financial management had not been all that efficient, most major newspapers and leading TV channels are said be suffering from nothing more than marginal reductions in their margins. And a couple in the industry are said to have made so much out of a highly lucrative 71-year old business model that they could survive the knife for decades without having to downsize or close down their off-market editions.
These new players from the corporate sector were investing in the media industry not so much for financial profits as for the political clout they stood to acquire in the bargain. For them media industry was a source for promoting their respective social and political standings.
The business model of almost the entire media industry while being highly profitable had, however, remained too vulnerable all these 71 years. To begin with, their margins, except for a couple of newspapers and TV channels, had remained too dependent on government advertisements which many received without having any significant reach---readership-wise or viewership-wise.
Until about the time broadcast media was thrown open to the private sector in 2000 along with the lifting of the cross-media ownership law, there were three major newspaper groups in the country---Jang Group, Nawa-i-Waqat Group and the Dawn Group. All the three started their own channels as well. Very soon one saw a boom in the media industry as some members of corporate sector started launching their own TV channels. Some even started newspapers along with TV channels. These new players from the corporate sector were investing in the media industry not so much for financial profits as for the political clout they stood to acquire in the bargain. For them media industry was a source for promoting their respective social and political standings. Nor were they too much concerned about their media ventures’ integrity and credibility aspects---essential ingredients for building professionally sound ethical media vehicles. As a result, very soon the office of a professional editor and genuine gate keepers disappeared from private TV channels. Virtually the owners took over the job of the editor as well as that of the gate keepers.
https://www.youtube.com/watch?v=9G5iq8xE7HQ
Most of the new entrants from corporate sector had no patience for these self-imposed ethical limitations and performance criteria that separate this public service industry from the other essentially money making undertakings. This led to the industry as a whole losing its standing in society within a matter of a decade. From a purely public service industry most of it had degenerated into political agenda setting industry.
Currently the government has more than halved its media advertisement budget while at the same time the state has turned the tables on the media’s political clout rendering it powerless in the face of dictated editorial policies being conveyed verbally by sources too cloak-and-dagger to be named.
The country’s advertisement cake has never been big enough to cater to the number of daily newspapers and periodicals and TV channels in business.
The fact of the matter is, those who buy newspapers don’t pay the full cost of the product which at least would be three times its cover price and of even this nearly half of the lowly cover price goes to the distributors. In the case of TV channels, the owners get nothing for the programmes they churn out round the clock, seven days a week. It is the cable operators who pocket what is paid by the consumers.
So, the media industries’ dependence on advertisement is understandable. But the country’s advertisement cake has never been big enough to cater to the number of daily newspapers and periodicals and TV channels in business.
https://www.youtube.com/watch?v=sJcxbvakwC8
The advertisement cake is said to have expanded from Rs. 66.9 billion in 2015 to Rs. 76.2 billion in 2016 and to Rs. 87 billion in 2017. The share of TV is estimated to have increased from Rs. 33.6 billion in 2015 to Rs. 38 billion in 2016 and to Rs. 42 billion in 2017. The share of print during this period has been Rs. 16.1 billion, Rs. 18 billion and Rs. 20 billion respectively. The share of Radio and digital media has remained negligible all these three years with the latter, however, expanding at an accelerated pace. But over the last quarter of 2018, this cake has shrunken considerably due to the new government’s highly restrictive media advertising policy as well as because the overall national economy has entered a stagnant mode.
Already one TV channel has been shut down. This crisis is being used by media ventures as an excuse for what is called ‘right sizing’ which means firing of staff.
Advertising revenues of most of media houses are falling steeply and as a result many of these enterprises are claiming that they were finding it increasingly difficult to sustain. Already one TV channel has been shut down. This crisis is being used by media ventures as an excuse for what is called ‘right sizing’ which means firing of staff.
What is happening in the media industry is the long awaited and anticipated correction. But a forced and abrupt one. Indeed, all those doomsday predictions that were being made ever since the birth of private electronic media some two decades ago are coming true. The bubble, it appears, has finally burst.
The newspaper industry on the other hand is being threatened by the growing challenge from the digital media which is attracting the ads that traditionally went to print media. Most newspapers are trying to keep afloat by cutting down on pages and shedding staff.
https://www.youtube.com/watch?v=XVg6Q5koF7E
All this is not happening because of the PTI government. This was waiting to happen and the PTI government hastened the fall by not only slashing the government’s advertisement budget but also by refusing to pay the advertisement arrears accumulated during the PML-N government.
Indeed, the federal and provincial governments, especially of Punjab and Sindh, have in recent years heavily spent their way into the list of top 10 print media advertisers along with commercial banks, telcos, real estate developers, FMCG firms, food companies, etc.
Most media business watchers were well aware that the government of the day was actually subsidising news channels for several years by buying air time at a much higher rate — said to be around three times higher than the rate charged from a private company for the same duration and slot. This unearned bounty has suddenly disappeared.
Meanwhile, as economic uncertainty began to bite due to currency devaluations and the economic indecisiveness of the new government, the commercial advertisers also began cutting their advertising budgets.
Most media business watchers were well aware that the government of the day was actually subsidising news channels for several years by buying air time at a much higher rate — said to be around three times higher than the rate charged from a private company for the same duration and slot. This unearned bounty has suddenly disappeared.
In recent months, the state and its different organs have been seen to have brought pressure on media owners using government ads to ‘discipline’ them.
https://www.youtube.com/watch?v=nXO3fgs94Gs
What, however, is surprising is that new TV channels are still being launched in spite of the financial crunch gripping the industry.
Most journalists will now have to reinvent themselves, improve their skills to be able to report for different platforms. They will have to immerse themselves in social media in a bid to connect to their new audiences.
Further, the rise of internet and emergence of new means for advertisers to reach their target audience is said to be diverting increasingly advertisements from the conventional TV and print media to social media. The size of the advertising cake has increased over the years, but so has the number of claimants. The competition for advertising income has increased sharply.
Meanwhile, the number of people using smartphones now exceeds the number of TV screens in the country. So, it’s not just economics that is affecting the industry. Audiences are turning away. Younger people are looking at other platforms for information and entertainment.
Both the newsroom and the journalist will have to change to meet this new challenge. Newsrooms cannot restrict themselves to one medium or language. Neither can journalists. Most journalists will now have to reinvent themselves, improve their skills to be able to report for different platforms. They will have to immerse themselves in social media in a bid to connect to their new audiences. News will change in the manner it is made and delivered.