During his second stint as Indian Newspaper Society (INS) president in the last three years, Hormusji Cama, director of Mumbai’s popular Gujarati daily Bombay Samachar, cannot complain of a single dull day. If he isn’t cobbling together support to boycott local newsprint suppliers for jacking up their prices, he’s busy preparing to move court against the Wage Board for newspaper employees. “The newspaper industry is in a bad shape,” he admits and talks to Shuchi Bansal on the challenges facing newspapers in the country.
What has been the drop in newspaper revenues?
It’s difficult to give the average decline but it could be around 20 per cent. The exact numbers will be available in March. But newspapers — big or small — are in a bad shape.
But newsprint prices have fallen globally.
Yes. But that’s hardly good news. The economy as a whole is down. Where are the revenues? The dollar is so strong that it has cancelled out whatever price benefit we could have got on imported newsprint.
Can INS help the newspaper industry in improving its circulation revenue? Is hawker commission a major issue?
The issue is not the hawkers. The issue is the price wars. If you continue to sell a newspaper at one or two rupees, which is well below your cost, what can the INS do? It is a business decision which each newspaper has to take. Some newspapers have raised prices by 50 paisa to a rupee, but that is not enough. Today a newspaper should be priced at between Rs 10 and Rs 15. A newspaper reader will pay that price in Bangladesh, Pakistan and Sri Lanka but not in India.
Can the industry get together on the issue?
I don’t think that will ever happen. It is difficult for everyone to collectively decide to raise their cover prices.
Newspaper publishers like the Times Group have launched private treaties’ divisions. In a letter, you cautioned INS members on a new company that is offering ad-for-equity deals. Are you in favour of such initiatives?
I don’t know the details of what the Times Group does, but I do know that it would never do something that would cause an unacceptable financial risk. I don’t want to name the new company, but it offers to buy ad space in newspapers in lieu of its shares. It does not pay cash but issues its own shares to newspapers (in turn, it buys equity in companies that advertise) and claims that after five years, the shares would be worth a certain value. My question is what happens to my cash flow? I need to pay salaries, buy paper and run my office. Also, what is the guarantee that the company won’t fold up.
So the warning related to the business model and not the ethics of private treaties’ clients getting editorial coverage in newspapers?
Personally, I am opposed to it. But there are very few business houses which will bite the hand that feeds it. The ads-for-equity issue was discussed with the INS members recently but the general view was that individual publications should decide their own course of action. I saw no point in discussing the morality of the issue then.
Is the INS moving court against the Wage Board?
Yes, we are, very soon. Wage boards have been abolished for every other industry. The newspaper industry wage board — by an Act of Parliament — is the only statutory wage board in existence. For most newspapers, it is financially crippling to implement its recommendations. Some days ago it recommended a 30 per cent (of basic salary) hike as interim relief. Except for a few big players who are profitable, nobody can pay such wages.
Have the problems with the National Readership Survey (NRS) been sorted out?
The NRS work was stopped two years ago. We had a lot of complaints about AC Nielsen, which did the research. So we decided to find somebody else. However, you can’t completely blame AC Nielsen as the National Readership Studies Council (NRSC) did not have a secretariat and most member queries went unanswered. Representatives of the AAAI, ABC and INS are part of NRSC.
The new research agencies have been interviewed and we will re-start NRS soon — provided the publishing houses are willing to pay for the research.
Aren’t there issues with the Indian Readership Survey as well?
Basically the surveys say that readership is going down. Readership declines because more and more people buy their own copy of newspapers/magazines. As you become more literate, you don’t want to share a newspaper. Buyers are going up and readers per copy is showing a downward trend. Of course, ad agencies do not look at it from that point of view. They say your readership is down and you give us a lower rate. Readership surveys in this country have become a tool for the ad agencies to hammer our rates. If you ask me personally, I don’t think we need any readership surveys. Ultimately, it’s the circulation. Go to the Audit Bureau of Circulation (ABC) and get your circulation audited. That should be good enough.
Have you filed a case against the Directorate of Audio-Visual Publicity (DAVP)?
No. We approached the government to increase their advertising budget. But that did not happen. Consequently, the rates have gone up by 30 per cent but the budgets have remained static and only a few newspapers which have clout have benefitted. The weaker/smaller newspapers have not gained anything.
Does the INS make money?
INS runs on membership fees, rents and what we charge the advertising agencies for accreditation every year. No, we do not make profits. We are not meant to.
There are reports of malpractices in the accreditation process of ad agencies which must pledge their business to media-owners before getting accredited?
Some years ago we had such complaints but very few people come forward with specific examples. By and large, our process is good and transparent. Why do agencies apply to the INS for accreditation if it’s bad? They come to us because we help recover their money. Recently a Mumbai agency had a dispute with an advertiser — but the agency had paid our dues, so we protected it and issued an advisory to all our members requesting them not to carry the client’s advertisements. The client moved the Bombay High Court to direct the INS to lift the ban. The HC was ready to dismiss the case in the first hearing but gave time to the client till the afternoon to withdraw the case. The client withdrew the case but our advisory continued and the client could not advertise. Eventually the client came to the INS for a settlement with the ad agency.
Does the future of print media look bleak considering the younger generation is not said to be reading much?
Is it? Then why are all the newspapers and magazines catering to younger and younger audiences if they are not reading? As long as people are born they will read and we have a booming population. Print is not going out of style soon.
