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- Russian Newspaper Crisis
- Recovery Program
National Press Institute (Moscow) with
- The Center for War, Peace and the News Media
- November 1998
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- A comprehensive sectoral program to assist the Russian
press in surviving the current financial crisis and achieving
long-term sustainability in support of democracy, economic transition,
and international stability.
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- Introduction
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- The economic crisis that has gripped Russia since August
17, 1998, has struck independent regional newspapers with particular
vengeance. These papers, a critical force for economic, social
and political development, are now fighting for survival. Should
appreciable numbers of independent newspapers lose this struggle,
state-dominated media will once again prevail, thereby striking
a powerful blow against the establishment of democratic politics,
free markets, and a vibrant civil society. Such a development
would further impede Russia's transformation into a stable, market-oriented,
democratic society able to assume a full partnership role in
the international community of nations.
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- On the eve of the crisis last summer, a number of Russia's
10,800 regional and local newspapers had made respectable progress
toward achieving financial independence and professional competence,
although enormous work remained to be done to guarantee the independent
flow of reliable information and responsible opinion in a democratic
Russia.
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- At the same time, the Russian government through subsidies
to state mouthpieces, through a tax system that stymied small
business and local advertising, and through continued control
of printing and distribution monopolies had demonstrated
less than an unequivocal commitment to the idea of a free, independent
press. For their part, most Western donors, while acknowledging
the importance of independent media in Russia's political and
economic development, had devoted scant resources to media assistance.
As a result of these factors, locally owned non-state newspapers
were extraordinarily vulnerable when the present crisis struck.*
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- This crisis now threatens to deprive most Russian citizens
of access to independent print media for political, economic,
and social information. The crisis has caused a collapse in the
papers' advertising revenue from both national and local businesses
and has also deeply cut into revenues from both subscription
and newstand sales. What is more, the dramatic declines in legitimate
commercial revenues are leading to renewed reliance on state
subsidies, company "sponsorship," and zakazukha (paid
advertising represented as news). As a result, thousands of papers
have been forced to dismiss or furlough staff, cut back on publication
size and frequency, sharply curtail their news coverage, or cease
publication altogether. Government publications, papers funded
by extremist political parties, and other organs of official
opinion or radical conviction are all too available to fill this
void. The implications for the country and the international
system are ominous, indeed.
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- The Critical Importance of the Print Media
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- Television is undoubtedly an important medium in Russia,
but an assistance strategy that does not devote significant attention
and resources to the print media is likely to fail to achieve
its primary objectives. There are a number of reasons why the
print media require particular attention during the present crisis
period:
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- · Recent surveys have shown that most Russians get
their local news primarily from newspapers. As the economic and
political decentralization of Russia continues, local newspapers
have become the locus of exchange of key economic, social, political,
and other information necessary for the regional development
on which Russia's future depends (inasmuch as 94 percent of the
Russian population lives outside of Moscow). Although the circulation
of Russia's central newspapers had declined prior to the crisis,
circulation figures for local papers had in many cases begun
to rise.
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- · Studies have repeatedly shown that Russians trust
their local newspapers more than any other source of information,
a finding with important implications for the process of developing
genuinely democratic politics in the country.
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- · While Russians watch television to get the headlines
or for breaking news, print media remain the only significant
source of in-depth news and analysis for Russia's political,
business, and intellectual elites. As noted by then Assistant
Secretary of State for Democracy, Human Rights, and Labor John
Shattuck: "[W]hile the print media lack the intimacy of
television, they can stimulate debate because print is a medium
especially well suited to convey context and meaning and to explore
ranges of options. In the post-Cold War era it has been largely
print articles that have set the agenda for serious policy discussion
and fundamental changes in public thinking."
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- · Given the increasing control of Russian television
by a handful of elites, only newspapers support the pluralism
of views and diverse viewpoints that are essential for an informed
and open policy process. Newspapers at both the national and
local level present a far wider spectrum of views than does television
and are essential to the development of a strong civil society.
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- · In Russia, as elsewhere, television media take their
cue from print coverage. It is the print media that set the news
agenda. In fact, local news broadcasting very often consists
of an announcer reading selections from the local press.
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- · The quantity and quality of television news and
public affairs programming will continue to decline as television
is integrated into the market (as has been the case in every
major democratic market economy). Already, according to Radio
Free Europe/Radio Liberty, "most private television networks
and radio stations focus on entertainment programming, not news."
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- · Print media are the foundation for the Internet.
As new media technologies begin to make a major contribution
to the information flow in Russia in the next century, it is
precisely print-based media skills that will be required to develop
"content" meaningful to the transition to a market-based
democratic society.
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- · Finally, an authoritative American study has demonstrated
that local newspapers are the essential medium for informing
voters in local and regional elections and for analyzing the
local angle of national politics. Because the upcoming elections
in 2000 will shape Russia's future in a profound way, the burden
on Russia's local newspapers is immense.
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- The Crisis as an Opportunity
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- The characteristics enumerated above point to the fact that
the print media have a unique role to play in the process of
Russia's political and economic transformation. Yet it is important
to recognize that Russia's pre-crisis media system was far from
being adequate to the demands of democratic politics or a market-based
economy and that any newspaper assistance strategy that is merely
designed to return Russian media to the pre-crisis status quo
ante would be misdirected and ultimately ineffectual. A number
of industry characteristics account for the economic weakness
and the professional inadequacy of pre-crisis regional newspapers:
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- · Regional newspapers had an abnormally small share
of both national and local retail advertising markets.
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- · Regional newspapers continued to be printed on outmoded,
state-owned printing presses and distributed by monopoly (often
state-controlled) distribution companies.
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- · There were far too many regional newspapers in extremely
restricted markets, making it impossible for many of them to
gain financial independence. Of the approximately 10,800 titles
registered in Russia's 89 regions, only half had circulations
over 10,000.
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- · Media markets (in terms of reader trust and advertiser
confidence) were grossly distorted by the presence of state-subsidized
mouthpieces posing as local newspapers.
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- · Regional newspapers were managed by former journalists
with an extremely limited understanding of the business side
of publishing, especially the importance of aggressive marketing
and outreach to both readers and advertisers.
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- · Governments continued to exert control over the
media, largely through economic levers, especially at the regional
level currently approximately 85% of Russian newspapers
receive some form of subsidy;
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- · Investment and capital resources were scarce, except
for politically-motivated investments;
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- · The unstable and underdeveloped legal environment
surrounding the media inhibited innovation, risk-taking, and
sustainability;
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- · Information access remained restricted, despite
freedom of information laws;
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- · Nonstate newspaper publishers rarely communicated
with one another, and were unwilling to share information or
work together to promote their common interests and improve the
legal and regulatory environment in which they operated.
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- · Public confidence in the media was abysmally low
because of poor journalistic professionalism and the widespread
(and often correct) impression that journalists served political
and financial interests rather than their readers.
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- In light of such problems, the National Press Institute believes
that the present crisis can provide a stimulus to building a
regional media system that is more professional and independent
than it has been in the recent past if funding resources
equal to the scale and importance of the media challenge should
finally become available. For their part, Russian publishers
and editors are now acutely aware of the need to rebuild their
businesses by increasing revenue, cutting costs, and providing
a better product, and are more eager than ever before to do what
is necessary to finally establish their newspapers on the basis
of sound business practices, aggressive marketing, and quality
journalism that truly responds to the public interest.
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- Statement of Principles for Media Assistance
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- The present crisis in Russia, the National Press Institute
believes, makes it necessary to reaffirm the essential principles
regarding the nature and role of a free, responsible, and financially
viable press in the development of the Russian economy and society.
With this in mind, the National Press Institute will be promoting
the following underlying media values and principles through
all of its activities in response to the crisis:
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- · Empowerment: The National Press Institute recognizes
that Russian journalists have a long and unfortunate history
of dependence on outside forces for information, financing, support,
and legitimation. Because of this history, NPI seeks to create
and implement only programs that truly empower journalists and
media managers, and that build their confidence that they can
and must help themselves and one another.
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- · Independence: State subsidies, state ownership,
and state interference with the press on the local or national
level stymie the development of independent non-state newspapers.
The prevalence of government newspapers undermines the public's
confidence in the press as a whole, saps journalistic talent,
and dilutes the newspaper industry's already weak advertising
base. The only role for government in media is the creation of
conditions that encourage true financial and political independence
of the media.
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- · Financial Viability: In order to be editorially
independent and responsible to their readers, newspapers must
be financially viable. Efforts to assist the media should not
include mechanical subsidies that merely shift dependence from
one source to another and that undermine the progress made to
date in improving journalistic ethics and responsibility. Media
assistance efforts should continue to develop the market- and
reader-oriented management skills necessary for the media's long-term
survival.
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- · Responsibility: The National Press Institute believes
that journalists must be both free and responsible. NPI seeks
to raise ethical standards among journalists and strengthen mechanisms
for self-regulation within the industry at the same time that
it seeks to eliminate formal and informal government control
mechanisms. NPI believes that journalists have a responsibility
to cover ethnic, minority, social, political, and economic issues
with sensitivity and sophistication.
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- · Professionalism: In order to play the key role that
the media must in a democracy, the Russian media not only must
become independent and financially viable, but must also raise
their level of professionalism. NPI is committed to promoting,
directly and indirectly, the highest levels of professionalism
among the media with which it works. Professionalism entails
the understanding of the media's role in society, high ethical
standards, and mastery of the journalism skills and practices
necessary to inform and involve Russian citizens on the full
range of issues that now lie before them.
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- What Is the National Press Institute?
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- These principles have guided NPI's work in Russia since it
was established (as the Russian-American Press and Information
Center) in 1992. The Recovery Program described in this document
is the result of NPI's nationwide work since then to promote
the professional practices and the economic and legal conditions
necessary to support a dynamic media sector serving the needs
of an informed citizenry and a vital public policy process.
- NPI is now a permanent, not-for-profit Russian NGO which
promotes civil society and government accountability in Russia.
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- To these ends, NPI maintains a network of seven regional
media assistance centers in Moscow, St. Petersburg, Nizhny
Novgorod, Novosibirsk, Yekaterinburg, and, in the future, Samara
and Vladivostok and regional affiliates.
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- NPI applies a unique sectoral strategy based on a comprehensive
approach to the economic, political, professional, educational,
and legal problems facing the media. Its effort to address these
interrelated issues simultaneously and in concert entails a comprehensive
set of programmatic activities, and it also ensures that NPI
has the flexibility to respond to new developments throughout
the media sector as they occur. Drawing on funding from an array
of private and public sources, NPI has created and implemented
a network of media assistance programs which have made it, in
the words of the Glasnost Defense Foundation's Oleg Panfilov,
"the center of the free exchange of opinion in Russia."
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- In its first six and a half years, NPI organized over 2800
programs, consultancies, and events in 40 cities across Russia,
with an aggregate attendance of over 130,000 journalists, media
managers, and communications professionals. It has provided management
training and consulting to thousands of newspapers throughout
the country, leading directly in some cases to full financial
independence from the local authorities. Through training and
provision of information it has helped thousands of journalists
to improve their reporting on key issues. It has promoted inclusive
and broad-based journalism that both promotes a diversity of
viewpoints and encourages civil society. It has championed the
cause of freedom of information in Russia. It has arranged lasting
partnerships between Russian and American newspapers. In these
and a host of other ways too numerous to summarize here, NPI
has employed its sectoral strategy to promote the development
of a stronger, more democratic, and sustainable independent media
sector.
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- NPI has elaborated this Russian Newspaper Crisis Recovery
Program based in large part on its six years of experience working
directly with Russia's regional newspapers. During this period,
among its other achievements, NPI:
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- · installed the only modern newspaper-controlled printing
press in Russia;
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- · provided financial and development assistance to
create Russia's most respected and reliable system of gathering
corporate and shareholder information;
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- · created partnerships between local American and
Russian newspapers that have exposed dozens of Russian newspaper
managers to new realms of possibilities in their developing industry;
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- · directly helped hundreds of newspapers raise advertising
revenue and improve management through on-site consulting at
Russian newspapers, seminars and training programs, and the translation
and distribution of Western manuals and textbooks;
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- · helped shape the legislative environment in which
the Russian media work by initiating the creation of the Moscow
Media Law and Policy Center, a major research and educational
resource in the field of Russian media law;
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- · created dozens of programs related to Internet publishing
and online journalism which have dramatically increased the availability
of information to and from the far-flung regions of Russia;
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- · improved Russian media coverage of nuclear security
issues by targeted outreach and consultation, by monthly bulletins,
and regular briefings and conferences on nuclear issues;
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- · helped develop the power of the media to contribute
to the prevention of conflict and the reduction of ethnonational
tensions through a variety of reporting projects, publications,
and training programs;
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- · helped to improve coverage of election campaigns
through regional workshops, monitoring projects, and campaign
coverage bulletins;
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- · created Russia's only organization dedicated to
promoting access to government information and to educating journalists
on exercising their legal rights to it; and
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- · hosted thousands of briefings and press conferences
that have exposed journalists across Russia to a wealth of independent,
non-state sources of information and publicized hundreds of citizens'
initiatives and non-governmental organizations throughout the
country.
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-
- NPI's Newspaper Crisis Recovery
Program
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- The National Press Institute believes that it is possible
to resuscitate the non-state regional newspaper industry in the
wake of the present crisis and lay the foundations for a stable,
viable newspaper industry in Russia. In order to do so, it is
necessary for non-state newspapers with the guidance and
assistance of Western media professionals to work together
in a concerted fashion to (1) increase revenues by increasing
advertising market share and circulation, (2) decrease costs
through more efficient management, (3) improve the legal and
regulatory environment through lobbying and legal and tax reform,
and (4) improve journalistic practices and standards and heighten
their sense of public responsibility to the public.
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- With these goals in mind, the National Press Institute has
developed its Newspaper Crisis Recovery Program, a comprehensive
set of initiatives to revive and further develop the independent
press. Each of the priority initiatives described below is being
proposed as an addition to NPI's ongoing programs described above,
many of which already address some of the management, revenue,
and journalistic issues that are highlighted below. But the crisis
has made it imperative to establish a new level of commitment
to resolving such issues. What is more, each of the 29 is designed
to address the longer-term structural problems of the independent
regional press, problems (as noted above) that were evident well
before the crisis and that have been exacerbated since. Each
of these initiatives also conforms to the principles (outlined
above) that underlie all of NPI's work and which it believes
should guide all future media assistance.
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- Moreover, it is important to note that these initiatives
vary greatly in their complexity and cost and have been designed
to be implemented with resources of varying magnitude. In fact,
any one of them could be implemented successfully by itself.
However, inasmuch as newspapers are facing a fundamentally sectoral
crisis, it is NPI's belief that a comprehensive response on a
sectoral scale will be required to successfully respond.
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- The 29 initiatives are briefly described below. It should
be noted that given the dynamic nature of the crisis and NPI's
continuing work to identify points of leverage in responding
to it, this list is merely suggestive. The Newspaper Crisis Recovery
Plan will evolve as the economic, journalistic, and political
conditions in the country continue to unfold.
-
- It should also be noted that, as it has in the past, NPI
is committed to drawing upon a broad array of expertise from
a variety of media organizations in the United States, Europe,
and elsewhere. Over the last years, the National Press Institute
has cooperated with hundreds of media organizations, newspapers,
NGO's, and governmental and multilateral institutions, and this
Newspaper Crisis Recovery Program is predicated on mobilizing
similar resources in the future. A small sample of the organizations
that NPI has worked with includes: the American Press Institute,
the Newspaper Association of America, the National Newspaper
Association, the Flint Journal, the San Jose Mercury News, Sister
Cities International, the International Center for Journalists,
Citizens' Democracy Corps, the World Association of Newspapers,
the International Federation of Journalists, Internews, the European
Institute for the Media, the Baltic Media Center, the European
Journalism Center, the Union of Journalists of Russia, the All-Russian
Union of Editors and Publishers, the All-Russian Union of Small
and Medium-Size Businesses, Moscow State University, the Media
Development Loan Fund, and the Glasnost Defense Foundation.
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- I. Revenue-Enhancement Projects
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- Although Russia's advertising market has collapsed since
August, it must be helped to recover over the next few years.
Otherwise, the survival of the independent press will simply
not be possible. As advertising recovers, non-state newspapers
must be in a position to gain a much larger share of national
advertising than they had before the crisis and they must be
ready to pursue local retail advertising far more aggressively
than they ever have before. NPI offers the following projects
to increase newspaper revenue:
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- A. National Advertising Representation
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- In Russia, up to 80 percent of all advertising budgets are
spent in Moscow. This high degree of concentration makes it essential
that local newspapers be actively and aggressively represented
in Moscow and that they take every possible measure to make it
easy and attractive for Moscow-based advertisers and agencies
to place advertisements in regional papers. To date, this simply
has not happened and, as a result, national advertising in regional
newspapers has been minimal.
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- For the last several months, the National Press Institute
has studied how the Newspaper Association of America works to
increase national advertising in local newspapers in the United
States. NPI believes that equivalent programs can be productively
developed in response to Russian conditions. Because of the extremely
high degree of centralization of the advertising market in Russia,
in fact, such programs can be far more important in Russia than
they are in Western countries.
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- Accordingly, the National Press Institute will create a national
advertising representation to work aggressively to increase the
advertising market share of regional newspapers. Specifically,
it will:
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- 1 Train regional newspaper
advertising staffs on working with national-level advertisers.
This will involve creating an effective alliance between regional
newspapers and the staff of the national representation. One
of the major factors suppressing advertising revenue in the regions
is that regional newspapers have never been effectively trained
to market themselves to national advertisers and meet the advertisers'
specific needs. While national advertising representations have
been tried halfheartedly in the past, this key ingredient of
training has been missing. NPI will make training the advertising
departments of regional newspapers a major focus of the national
advertising representation. Part of the training process will
be the collection and dissemination of information on national
advertisers' needs and strategies.
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- 2 Establish standard advertising
formats and cost-per-thousand ad rates to facilitate the purchase
of bulk and national advertising in regional papers throughout
the country. Measures taken to create standard formatting will
go a long way to encourage a larger share of national advertising
in regional newspapers.
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- 3 Assist and train member newspapers
in planning, promoting, and producing supplements and special
editions with the goal of increasing national advertising. Special
supplements, currently underutilized in Russia, can be a primary
source of very targeted advertising revenue, especially if coordinated
on a national level. A team of special advertising consultants
will be sent to all members of the national representation to
ensure that marketing documents as well as actual supplements
and editions are produced. The advertising representation will
also coordinate the work of member newspapers producing supplements
on similar themes to enable them to share editorial materials
and reduce costs.
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- 4 Conduct research and produce
materials that will demonstrate to advertisers the effectiveness
of newspaper advertising compared to advertising in other media.
The NPI advertising representation would act as the newspaper
industry's advocate in the advertising and marketing communities
and would work with local newspapers to address the concerns
of advertisers and marketers (on issues such as the accurate
reporting of circulations, for example). It would serve as a
conduit of information exchange between regional newspapers and
Moscow-based marketers.
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- 5 Develop the concept of cooperative
advertising in Russia. Cooperative advertising is a mechanism
by which national advertisers share advertising costs with local
retailers and distributors. The advent of cooperative advertising
markedly increased the newspaper share of national advertising
revenue in the West and can work as well in Russia if a national
newspaper representation is created to coordinate and encourage
the practice.
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- The creation of a national advertising representation for
regional newspapers is a considerable undertaking. Major program
costs will include personnel in Moscow and the regions, equipment,
travel, telecommunications, and production costs of marketing
materials.
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- Should this project be implemented, it has the potential
to reform the industry and enable it to emerge from the present
crisis stronger and more viable than before. The project is designed
to open up a major new revenue stream for the industry, and,
as the Russian advertising market recovers from the crisis, the
NPI national advertising representation should become increasingly
self-sustaining.
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- B. Public Service Announcement Placement
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- NPI has developed a project that will help newspapers during
the current crisis period, while at the same time promoting values,
behaviors, and information that is important to the economic
and political transformation in the country, as well as for the
immediate well-being of the Russian people.
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- 6 NPI, in conjunction with
sponsoring organizations, will buy regional newspaper advertising
space and then use the space for public service announcements.
As a result, newspapers will receive a small but steady flow
of advertising revenue, while at the same time the Russian public
will be presented with critical information on a range of issues
health, environment, education, nutrition, conflict resolution,
political participation, tolerance, etc. that will either
assist the public directly or promote the values of an open society.
Such public service announcements can also help to promote, directly
and indirectly, the work of Russia's struggling NGOs. Such announcements
will also encourage the standardization of advertising formats
(see No. 2 above) and will establish the concept of public service
announcements in Russia for the future.
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- C. Local Advertising Sales
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- Despite the potential importance of national advertising
as a revenue source for regional newspapers in Russia, it is
certain that local retail and classified advertising will remain
the most significant source of income, as it is for newspapers
in other large countries. With local advertising, newspapers
have considerable competitive advantages over other media in
terms of cost, immediacy, and effectiveness.
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- Historically, however, Russian newspapers have failed to
acquire the local market share that they should have. As a result,
in many cities local television stations have even captured a
significant share of the classified advertising market, running
text-only announcements across the bottom of the screen during
entertainment programming.
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- The present crisis has served in many cases as a wake-up
call to regional newspaper publishers. The time is ripe for a
concentrated effort to improve the sales and service capabilities
of local newspaper advertising sales agents, and also to improve
the efficiency of newspaper advertising departments. With the
goal of improving local advertising markets, NPI is undertaking
or plans shortly to undertake, with appropriate funding, the
following programs:
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- 7 NPI will organize direct,
in-depth training in local advertising sales. NPI will establish
a considerable training program on the ground, bringing Western
sales techniques and attitudes directly into newspaper advertising
departments around Russia. Sales agents must be trained in the
use of worksheets, in time management, in making sales calls,
in advertising design, and in all other related skills.
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- 8 NPI will publish manuals
to give concrete guidance to newspapers in developing local advertising.
As an immediate reaction to the present crisis, NPI has already
undertaken the translation of The Great Ad Venture: How to Succeed
in Newspaper Advertising Sales, a practical handbook for newspaper
advertising sales agents published by the Newspaper Association
of America and used widely in the West. This manual emphasizes
the importance of understanding the client's needs, of selling
solutions to the client's marketing problems, and of countering
objections that inexperienced advertisers may have to the concept
of newspaper advertising. It includes worksheets to enable advertising
sales agents to assist clients in developing an annual advertising
plan to match their budgets and projected sales. NPI is seeking
to translate and publish a number of practical manuals on newspaper
marketing, circulation control, and classified advertising from
Western sources.
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- 9 NPI will promote the development
and distribution of specialized computer software. Advertising
managers must be given the tools to effectively manage their
agents. In 1997, the National Press Institute provided consulting
to the independent newspaper Zvezda in Perm to create elementary
computer software for managing advertising accounts. This software
has been successfully used since then to keep track of payments
for advertising, to track the work of sales agents and to effectively
plan sales calls. Such software is used every day in every Western
newspaper, but is rarely encountered in Russia. NPI is seeking
to refine this software and provide it to as many independent
newspapers as possible, together with the training necessary
to use it effectively. Not only will this software greatly improve
the efficiency of individual advertising departments, it will
also enable media assistance organizations to more easily track
developments and patterns in local retail advertising markets,
to analyze developments throughout the industry, and to respond
accordingly.
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-
- D. Printing Presses
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- The National Press Institute has argued for many years that
the poor quality of newspaper printing in Russia (about 80 percent
of all newspaper printing in Russia is still done with letterpress
technology) is a major obstacle to attracting advertisers. What
is more, the continuing state monopoly of newspaper printing
is a powerful lever to apply economic and political pressure
on independent newspapers.
-
- Among assistance providers working in Russia, the National
Press Institute (with funding from USAID) has taken the lead
in addressing this problem. In 1997, NPI installed a modern newspaper
printing press in Volgograd for a group of independent local
newspapers. Since that time, this press has become a major revenue
source for these newspapers and provides the only full-color
newspaper printing in southern Russia.
-
- As a result of this project, the first of its kind in Russia,
the National Press Institute has the capacity to manage such
projects, handling the logistics on the ground, assessing the
needs of the Russian partner and the suitability of the site.
In Volgograd, the National Press Institute and its partner, the
American newspaper consulting firm Boles, Morgan and Canino,
created a complete program of technical and management training
that enabled the Russian partner to quickly and effectively take
over management of this printing business.
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- Improving the quality of newspaper printing in Russia is
an expensive and complex proposition. However, the newspaper
industry will never be able to achieve its revenue potential
from either advertising or circulation, to control costs, or
to ensure its independence without a major investment in printing
technology.
-
- 10 In the current crisis, the
direct purchase of printing presses is simply not a realistic
option. However, NPI continues to promote other ways of getting
printing presses into the hands of regional newspapers, specifically
loans for the leasing or leasing-to-own of printing presses.
For example, NPI is encouraging infrastructure-development funds
such as that associated with the Sakhalin-2 oil field project
to include independent newspaper printing as a crucial element
of infrastructure that is being established under the project.
NPI has also begun working with Rybinsk Poligrafmash, Russia's
only domestic manufacturer of newspaper printing presses, to
improve their products and make them more affordable for Russian
newspapers. A printing press is not just a machine; it is a business
in itself. NPI, therefore, in conjunction with its American and
Volgograd partners, would like to create a domestic training
facility to provide a full range of technical training on printing
and pre-press production and, equally important, to train press
managers in effective marketing and financial control of a small
printing business.
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- II. Cost-Containment Projects
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- In addition to efforts to increase their revenue, regional
newspapers must undertake organized measures to reduce and control
costs across the board. In doing so, they can benefit enormously
from Western management practices and from increased cooperation
among themselves.
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- A. Information Exchange and Best Practices
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- Russian regional newspapers operate without full information
about market conditions and opportunities, and they remain isolated
from other newspapers facing identical circumstances. As a result,
they do not optimize their choices, and they often improvise
stopgap measures to address problems that others have already
creatively solved.
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- 11 NPI will organize the systematic
collection and publication of best management practices among
Russian regional newspapers so that editors and publishers can
learn from each other's innovations. In the wake of the August
crisis, independent newspaper managers undertook many anti-crisis
measures, some effective and others not. NPI immediately began
exchanging anecdotal information on management practices through
its research into the crisis, through a crisis-related listserv
that was created in October, and through its annual Newspaper
Management Conference (held in Moscow, November 11-14, 1998).
This work needs to be systematized and continued in a regular,
organized fashion in order to have maximum impact. Therefore,
NPI seeks to create a monthly newspaper management newsletter
to serve as a vehicle for newspapers to share innovative solutions
to management problems, as well for NPI to disseminate cost-containment
procedures that it will develop on its own in cooperation with
international media organizations. Such a publication should
evolve into a practical, regular professional publication for
newspaper managers. The present crisis is the perfect time to
cultivate in Russian managers the habit of learning from one
another and to promote greater professionalism among managers
throughout the industry.
-
- 12 Isolated regional newspapers
are often not aware of current market conditions and opportunities.
NPI will continue to publicize important economic information
to enable regional newspapers to take advantage of the best prevailing
opportunities. For example, after the crisis NPI began to collect
and publicize information on newsprint prices, a simple undertaking
which is helping newspapers identify the cheapest sources of
newsprint in a wildly erratic market. NPI believes that such
price monitoring, by increasing the transparency of markets for
the goods and services that newspapers consume in quantity, can
promote market stability and, thereby, help reduce costs and
facilitate planning and budgeting on the part of newspaper managers.
-
- B. Crisis-Management Consulting
-
- Russian regional newspaper managers can learn much from the
experience of newspaper professionals in other countries that
have experienced similar economic collapses. Such experience
can transfer valuable practical lessons that Western or Russian
managers would not be able to provide.
-
- 13 Together with the World
Association of Newspapers, NPI seeks to considerably expand its
use of consultants with experience working in similar economic
conditions. Newspaper managers from Indonesia, the Philippines,
Latin America, and other parts of the world have a wealth of
directly and immediately relevant experience that can help Russian
publishers emerge from the present crisis stronger and more confident
than before. In addition to learning to cope with the present
crisis, Russian managers can be exposed to management techniques
from around the world that can serve them far into the future.
After coordinating this "emergency first aid" in the
form of on-site consultations for select newspapers and national
and local workshops, NPI will disseminate broadly the most useful
suggestions through its publications, consultancies, training
programs, and Internet Media Service.
-
- C. Improved Financial Management
-
- Haphazard financial management has crippled the development
of the commercial press in Russia for many years. In some respects,
newspapers have suffered from the present crisis more than they
might have because poor financial information hampered decision-making.
Improving Russian newspaper management has been and continues
to be a key priority, a fact that the crisis should not obscure.
NPI's past work in this area has focused primarily on a combination
of direct on-site consulting, publications, and training workshops
throughout the country. It now plans to augment these activities
with the following:
-
- 14 In order to help overcome
the lack of financial management experience, NPI will develop
and widely apply a CD-ROM-based newspaper management simulation.
The simulation will make it possible for newspaper managers to
undergo a five-year cycle of business decisions in a few days
of intensive training. The American Press Institute has used
such a management simulation very effectively for a number of
years. The simulation would enable NPI to educate thousands of
managers over a relatively short period of time at a low per-participant
cost.
-
- 15 NPI's study of regional
newspapers indicates that very few publishers receive even monthly
cash-flow reports and startlingly few make effective use of available
computers for financial management. For this reason, NPI will
facilitate the development of financial-management software capable
of generating quick and accurate cost and revenue reports for
newspaper managers. This software, together with a package of
training materials and a training program, could markedly improve
managers' ability to evaluate and improve company performance.
-
- 16 At the same time, the widespread
use of such a financial-management package, which could help
to gather financial information in a standardized format, would
enable NPI to monitor and report on industry averages for key
costs such as newsprint, office supplies, labor, printing, etc.
Such reports would themselves become another financial-management
tool for Russian publishers, allowing them to compare their company
performance with national standards.
-
- D. Legal Consulting and Assistance
-
- Russian newspaper managers are caught in an extremely perilous
legal environment, partially regulated by business law and partially
regulated by media law. Moreover, because of the isolation of
regional newspapers from one another, there has been no accumulation
of experience in legal affairs and no study of available precedents.
This, of course, places commercial newspapers in very vulnerable
circumstances as local authorities use the tax inspectorate or
other agencies to apply pressure to keep them in line. Complex
laws governing newspaper "founders," ownership, and
control present major obstacles to newspapers wishing to assert
or establish their independence. The lack of legal expertise
also hampers newspapers in contractual negotiations and other
settings.
-
- 17 Regional newspapers could
clearly benefit enormously from a centralized, practically oriented
commercial law service dedicated to assisting newspapers in availing
themselves of the tax exemptions to which they are already entitled
and, in general, in entering into commercial arrangements on
the most advantageous terms.
-
- 18 State-founded newspapers
that seek to become independent by breaking away from the state
agencies that are associated with them present a unique legal
category in Russia and absolutely nothing to date has been done
to assist them. In many cases, the most responsible and progressive
journalists in a given city have been denied the Western assistance
that they need and deserve on the grounds that a state agency
is listed among the founders of the publications for which they
work and cannot be removed. NPI believes that competent legal
assistance and pressure from commercial newspaper publishers
across the country could help state-founded newspapers become
legally independent and develop into mature community voices.
Specifically, NPI could arrange subsidized or low-cost consulting
with leading legal experts, including members of Russia's official
Arbitration Chamber for Information Disputes who have worked
with NPI in the past to preserve particular independent newspapers.
-
- 19 NPI will also arrange legal
assistance for newspapers seeking to wholly or partially merge
operations, which would benefit the industry as a whole. NPI
can also assist groups of newspapers to create management and
ownership structures for jointly owned printing and production
equipment. NPI would base such agreements on the Joint Operating
Agreements which have been undertaken among U.S. newspapers,
although of course Russian legal, financial, and other conditions
would clearly necessitate adaptations to the Russian environment.
-
-
- E. Purchasing Cooperative
-
- On their own, scattered around the largest country on Earth
and with relatively small purchasing power, Russian regional
newspapers are often at the mercy of suppliers of newsprint and
other goods and services. NPI will pursue two related ideas:
-
- 20 For several years, the National
Press Institute has been studying the feasibility of creating
a purchasing cooperative among independent regional newspapers.
Such cooperatives have been very successful in helping non-chain
newspapers in the United States bargain with newsprint and other
vendors on the same terms as large newspaper groups. By pooling
demand and making it possible for newspapers to bargain together,
such cooperatives can secure significant reductions in the cost
of newsprint, computer equipment, subscriptions to news services
and the like. A purchasing cooperative could also bargain with
Western manufacturers of popular computer software for a group
license for all members at a significantly lowered cost (the
National Press Institute has already approached the manufacturer
of QuarkExpress, a leading newspaper-design software package,
with such a request). The creation of a purchasing cooperative
would be a landmark in the process of encouraging nonstate publishers
to work together. This cooperative could also be used to provide
direct assistance through subsidizing the purchase of necessary
equipment and materials, if that were deemed necessary. Because
participation in the cooperative would constitute a form of self-empowerment
among publishers, this kind of assistance would be more productive
than the direct grants that have sometimes been provided in the
past.
-
- 21 Such a purchasing cooperative
could also serve as an ideal vehicle for distributing loans for
the purchase of newsprint. By taking advantage of bulk purchasing,
borrowers could be certain that they were getting the best possible
price and lenders could be assured that the loans were actually
used for the purchase of newsprint.
-
- III. Projects to Strengthen Democratic
Politics, Civil Society, and an Open Policy Process
-
- At this moment of economic, political, and, indeed, psychological
crisis for Russia, it is even more critical than ever that the
media be able to fulfill their function as the preeminent source
of business and economic information for democratic politics,
as the facilitator of an open policy process, as a reliable source
of business information, as a watchdog against official corruption
and mismanagement, as a promoter of civil society, and as a responsible
force for tolerance. The crisis has clearly impaired the media's
ability to fulfill these roles. For that reason, a crisis program
must address these key journalistic and professional issues if
it is going to address the country's most pressing economic and
political challenges, as it must.
-
- It must be stipulated that the weakness of Russian newspapers
stems in part from the fact that readers, as a rule, have a low
regard for their journalistic standards and integrity. Although
falling circulations over the last ten years can be mostly attributed
to Russia's economic troubles, newspapers have done surprisingly
little to make themselves essential to their readers. As a result,
they have been unable to attract sufficient advertising to secure
financial viability. The National Press Institute believes that
improving journalism standards and techniques is not only a matter
of social responsibility but also one of financial survival.
-
- The National Press Institute advocates the creation of practical
journalism programs that are designed to strengthen Russian democracy
while also serving to cement the bond between readers and their
local newspapers. Such programs, in fact, have a been a staple
of NPI's sectoral approach to media assistance since it was established
early in this decade. However, NPI believes that Russia's underdeveloped
civil society and the general passivity of the average Russian
citizen continue to present a major obstacle to newspaper development
(as well, of course, as to Russian democracy itself). Disengaged
and unempowered citizens have no need for newspapers. For that
reason, NPI has encouraged newspapers to cover and work with
local citizens groups and NGOs and has served as a platform for
well over 1,000 NGO press conferences and briefings.
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