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Magazine
MEDIA MATTERS
A silent crisis
SEVANTI NINAN
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It may look as if the Indian newspaper industry is going through a boom. It is not. Newsprint prices have been going up steadily, eating into the already thin profits.
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Photo: G. Moorthy
Boom or bust? Increasing circulation and thinner margins.
Last week Delhi got yet another newspaper when the Chattisgarh-based Deshbandhu decided to launch from the capital, which already has more than 30 daily newspapers. Last month, Andhra Pradesh saw the entry of an ambitious new daily
, Sakhshi, which announced that it was launching with 20 editions and an initial print run of over 12 lakh. In February, two business newspapers launched language editions. So the newspaper industry is flourishing in India, one of its last bastions, right?
Wrong, actually. It faces a grim problem it has not faced before: record newsprint prices. The launches defy logic because climbing newsprint costs make early break-evens very difficult. Last week, with the start of a new quarter, there was intimation that newsprint prices had gone up yet again. And collectively though not publicly, media owners and managers groaned. Because it is not visible to the consumer it is a silent crisis, but a serious one none the less. When newsprint prices climb by some 30 per cent, (to $850 a tonne) in less than a year, following capacity closures in North America and euro-dollar exchange rate changes for European producers, the two primary sources of import, it is bad news for all publishers globally, but particularly so for small ones.
It means that a commodity which accounts for up to 50 per cent and more of a paper’s total cost will then begin to eat up whatever margins most publishers earn and the newspaper price wars we are seeing here mean that the higher costs cannot be passed on to readers. Newspapers in India and abroad have been becoming narrower over the years to save newsprint consumption — in 2005 the Wall Street Journal lopped three inches off its width to save newsprint costs, while other papers switched to lighter weight newsprint. (A few years ago when The Hindu reduced its width, columnists were told to reduce their column length!)
Inter-connected
The newsprint crisis is a little-told media story which illustrates the globalised nature of the industry. Because newspaper reading has fallen in the U.S., newsprint consumption by U.S. dailies has tumbled by nearly 30 per cent over the past five years. Newsprint producers there consolidated and began to close down small mills so that production fell in line with shrinking demand. This was to ensure that prices did not fall. Meanwhile China entered the world market and began pushing its newsprint. Now, suddenly China has decided not to export its newsprint for a while, and Russia has stopped exporting pulp. India, which imports more than half its newsprint requirement, is feeling the pinch. So are newspapers in the U.S., which, unlike Indian ones, are also facing dropping circulation and declining advertisement revenues. As for Indian newsprint manufacturers, most of them import their pulp so their product isn’t any cheaper, and they are not planning capacity increases either.
As of today, newsprint prices threaten to climb even further. If newspapers in the U.S. are in crisis because their circulations are dropping, Indian newspapers will be in crisis because their circulations are rising!
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My column on foeticide and the media titled “Grim Realities” which appeared on March 16 had said that Pilani, home to the Birla Institute of Technology, had a literacy rate of 97 per cent and a child sex ratio (in the 0-6 age group) of 327:1000 in the 2001 census. I was making the point that, ironically, areas in Rajasthan with high literacy also have an adverse child sex ratio (CSR). This provoked a barrage of protests from a professor in Pilani. I must clarify that the activist in Jhunjhunu who gave me that figure was referring to a specific ward in the town. He got the figure wrong, the correct figure is even more adverse: it is 237:1000, with a literacy rate of 93 per cent. Another ward in the area falling within the campus has a CSR of 266 and a literacy rate of 97 per cent.. The professor says that because it is a campus area, there aren’t many small children here, so the CSR has been projected from a very small base. And demographer R.G. Mitra, a former deputy registrar-general of the census whom I consulted, says the numbers in wards are too small to draw any conclusions from, but the overall figures for Pilani are good enough for this purpose.
Still valid
I have to point out that the overall picture bears out the correlation between high literacy and low child sex ratio. Vidya Vihar, where BITS is located, has a literacy rate of 89.8 per cent and an overall CSR for 15 wards of 871, which is more adverse than the CSR for the main town of Pilani which has literacy rate of 78.6 per cent and a CSR of 897. These towns are in Jhunjhunu, the district in Rajasthan with the highest literacy rate but the third most adverse CSR in the State. And Chirawa, the subdistrict of Jhunjhunu where BITS and other institutes are located, has the second most adverse CSR of the six subdistricts in Jhunjhunu, and the second highest literacy rate. The worst is neighbouring Buhana, which has the highest literacy rate of all the subdistricts and the worst child sex ratio (840). (The overall CSR for India in 2001 was 927 females per 1000 males.)
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