We all have been hearing about news organizations from across the spectrum cutting salaries and firing journalists. While Covid-19 has had disastrous impact on the global economy as a whole, the news industry seems to have taken the biggest hit. Organizations such as The Times of India, The Indian Express, Hindustan Times, Dainik Bhaskar and The Quint are some examples where salary cuts and retrenchments have happened. In fact, we shall be able to understand the scale of the crisis if we look at a probable number given by the Indian Newspaper Society (INS). The society, which has nearly 1,000 publishers under its umbrella, said that the industry is estimated to bear a loss of nearly $2 billion in the next six to seven months.
On the face of it though, it should appear that Covid-19 is a particularly opportune moment for news businesses as people locked down would have more time and propensity to consume news content. However, the equation is not that simple. We have to look at it a little deeper to understand the rot.
To start with, let us look at the good old print news industry – newspapers and magazines. How much do we buy a newspaper for? We buy a single issue of a newspaper for Rs. 3 at times; sometimes we buy it for Rs. 4 and the maximum that we spend on it is Rs. 5. However, all costs included, it takes at least Rs. 10 to Rs. 15 to produce a single issue of a newspaper. Therefore, where does the rest of the money come from? Obviously, it comes from advertisements. But, this is exactly where the problem lies. When the economy is so bad and people are cutting down their expenses, most of the business organizations are practically bleeding. The first thing that these organizations have done is cutting corners. When business organizations economize, the first casualty is advertising. Therefore, hardly any advertisement is coming for the newspapers and news magazines. Thus, there is no money and this is making the print news organizations to shut down in a jiffy.
In fact, experts harbour the view that the death of the print media, which was already on the death bed even before Covid-19 struck, has been quicken by the advent of the pandemic. Anto T Joseph, formerly the Managing Editor of DNA, said during a recent online conference that the growth figures of most of the renowned newspapers in India paint a very grim story.
What about the news channels then? Well, the scene is not too different there as well! News channels hardly make any profit out of subscription payments, which are miniscule. Most of the money hopelessly comes from advertisements and advertisements have been stopped by most companies now.
Now, a lot of people are mistakenly pinning their hopes on the digital media thinking that digital media would eventually rationalize the situation and many journalists would go digital. If we look at the business model though, we shall be able to find that the news portals don’t get any money from people reading the news on the portal, which is practically free. All that the portals make is from digital advertisements that have also dried up subject to the economic downturn. Additionally, the portals pay a large part of their advertising revenues to the third party distributors like Google and Facebook. Therefore, all these talk about digital transformation of the news industry is a lot of hooey.
Where does it then leave the hardworking journalists, who are not only grappling with the possibility of contacting Covid-19 in the field but also with the distinct specter of losing their employment? While journalism still might survive Covid-19, there is very little possibility that it would be able to survive any more future disaster. The industry needs to change its business model and soon. The way out is to make the news consumers understand the value of good journalism. Instead of money flowing in from the industry that makes news dependent on corporate entities, the money needs to flow from the pockets of the consumers.
While in the print industry, the costs of newspapers need to be substantially enhanced, paywalls should be the way forward in digital journalism. Most of the news platforms need to shift to the Newslaundry model, although its success can always be questioned. However, for such a thing to happen, the industry has to rally together and stand united and make sure that corporate interests do not eventually drown the call of the hour.
During the recently held #MediaNext 2020 that was organized by the Kolkata-based Adamas University, the celebrated rural journalist P. Sainath, who is also the recipient of the highly prestigious Ramon Magsaysay Award, said that popular media has reduced itself to a mere revenue stream sans any humane considerations. If we look at what Sainath iterated, we shall be able to appreciate that his statement is also indicative of the rot that popular media has created subject to its over-dependence on advertisements. It has indeed become important for news consumers to understand the simple fact that news can never be free and unbiased unless they start paying for what they are getting.
Govindraj Ethiraj, the founder of such fake news busting websites as Boom and FactChecker, endorsed the view that mainstream media has lost much of its credibility. While speaking at #MediaNext 2020, Govindraj went to the extent of saying that if an instant poll is taken vis-à-vis the credibility of news reports published by the mainstream media, most of the people would consider it inauthentic and non-credible.
As we grapple with serious credibility issues as far as the mainstream media goes, in all probabilities, the post-Covid scenario is going to throw open there different trends:
- Consolidation is going to be the order of the day. A lot of news organizations will merge will each other to form giant news entities. While the dot-com bubble saw the springing up of a number of media organizations in the late nineties of the last century and the early years of the current century, the economic downturn that is going to mark the entire globe for the next two years will see the closure of many media organizations.
- News media is going to see the exponential growth of subscription-based business model and will increasingly reduce its dependence on advertising revenue. This, in turn, would make journalism free and objective again. With consumers increasingly funding the news media expenditures, corporate entities will have significantly less control over editorial functions.
- Last but not the least, a good number of independent news media ventures are going to spring up that would primarily function in the digital mediascape. Multimedia storytelling and convergence would become the new normal. This would transform the news consumption habits of people. Subject to an increasing internet penetration and data set to become a fundamental right, an overwhelming majority of the news consumers would consume their daily dose of news on mobile devices.
However, these are just predictions as nobody knows when the pandemic would be over and when normal life would resume. However, what can be predicted with some certainty is that the business model of news media is going to transform.
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