|India was the newspaper world’s miracle. It was the place newspaper executives the world over longed to escape to when the gloom and doom in their own countries became too much to handle. According to the most widely cited readership survey, Indian newspapers added 18 million readers between 2017 and 2019. |
For many, the formula was simple: subsidise the true cost of printing a newspaper by aggressively getting advertisers and sponsors to pay you for the privilege of reaching millions of potential consumers who didn’t realise or mind the difference between news, advertorials, celeb gossip, and unsourced exclusives. This created a new inverted value equation. If you focused on high quality news and insight, then you’d get fewer readers, which meant fewer advertisers too. This, in turn, meant you couldn’t subsidise your price as much, which meant even fewer readers in a price-sensitive market were likely to pay you. As vicious a cycle as any. Conversely, the virtuous loop involved the production of more mass content, which in turn brought more readers and advertisers and the printing of more ads, allowing for prices to be dropped even further. The cheaper a newspaper, the more likely its popularity. And the bulkier the newspaper, the more likely it’s profitable. Here’s a composite image of a single issue of the Times of India from 17th June 2017. The red sections mark out the advertisements in the 32 pages it carried.
|Covid-19 has, for now, reset the newspaper value equation.|
Here are photos of yesterday’s issues of three of India’s most popular English newspapers—The Times of India (the largest general newspaper), The Economic Times (the largest business newspaper), and Business Standard (a cerebral and distant number three among business newspapers).
|Two key facts jump out.|
1. They’re all 12 pages each.
2. None of them have any third-party ads (except a small classified ad in the Times of India from a government body for face masks, PPEs, etc.) Much of the newsprint used by newspapers in India is imported and expensive. Newsprint is the paper that is used to produce newspapers. In major newspapers like this one, it is imported because that is the only paper of high enough quality to be able to be printed quickly and well. The cost of the paper is roughly about Re 1 for four sheets. If the paper you are reading today has 48 pages, it has cost Rs 12 to produce, and we are talking only about the physical cost of the material. The people and processes are all separate. Statutory warning: Newsprint duty is injurious to the health of our democracy, Times of India
|Thus, sans advertising revenue, Indian newspapers have quickly shed bulk and settled at 12 pages. Perhaps because that’s the simplest multiple of 4 pages (a single running sheet that is folded down the middle) without resorting to cutting and gluing of sheets. So, the choices would’ve been either 8 pages or 16 pages.|
Sticking with just yesterday’s set of three newspapers, we are now faced with a new reality. One that seems sensible, but also surreal for India.
When advertising revenues trend to near-zero, the number of pages in a newspaper tend to converge to a mean
Which means the number of pages cease to be correlated to the popularity of a newspaper
When the number of pages in rival newspapers tend to converge, no one has the incentive to increase them by 25% (12 to 16), since that would increase their printing costs by a minimum of Rs 1, even though the price paid by subscribers would remain constant. They’d be chopping away at their own bottom line.
If you bleed money from every page you print, you will want to increase the price of your newspaper.
If you want to increase the price of your newspaper while deciding not to add any more pages, then perhaps you would focus more closely on the quality of what they are already putting out.
Could Covid-19 lead to higher priced, better-quality newspapers in India?
Covid is the medium and the message Olina South Korea did the unthinkable. It held a full-fledged election in the middle of a global, life-threatening pandemic. Casting a vote usually means a million touch points (long lines, cramped booths, pressing buttons), but with the help of numerous face masks, gloves and a staggered voting system between the quarantined and general public, it somehow worked out. How South Korea managed to pull this off is a story in itself. But that’s not what caught my attention. The virus had an impact on campaigning. In South Korea, election times can often be raucous and rowdy affairs. Vans with loud speakers blasting outside your window…But this year, masked encounters from a distance have replaced mass rallies and there are fist and elbow bumps instead of handshakes. At one point during a briefing, Dr Jung from the Korean Centre for Disease Control urged politicians to simply “smile with their eyes”…The virus has also changed the content of the campaign. In January, political discussions were dominated by the slowing economy, job creation and stalled talks with North Korea.
But now it is about South Korea’s response to Covid-19. Coronavirus: South Korea holds elections in masks and clinics, BBC
The Medium The pandemic will definitely alter the way we vote. But it’s also changing the way politicians can get their message across. Democratic presidential nominee Joe Biden had to cancel in-person appearances and shift online. The US Opposition has to adhere to rules of social distancing and quarantines. But what do you do if you have a state-sanctioned, physical pulpit to address the nation everyday? You use it, of course, like Donald Trump did. During a lengthy, two-hour White House press briefing, Trump slid in a “crudely edited” video of US governors thanking him for federal support and blaming the media of downplaying the risks of Covid, something that ironically, the media was accusing Trump of. In that very press conference. If you think about it, these are perfect times for a re-election campaign. Your opposition is stuck at home. Their on-the-street campaigns decimated. You have complete control over an information channel that millions tune into because it’s their only way to know what the administration is doing to control the spread. When you wield that kind of power, you don’t really have to bother with facts. Or a sinking economy, a troubled health system, and social inequality. In a zero-sum game of attention, you’ve grabbed attention across all screens.
The Message Covid as a message is a trickier thing to unpack. Let’s take a look at, for instance, “PM CARES”—the composite Indian aid fund set up to battle Covid. It’s a one-size-fits-all relief fund with the Prime Minister himself as fundraiser-in-chief. Now, a national fundraising platform is a great medium. But if you look closely, PM CARES also underscored a deeper message: from now on, disaster relief is inextricably linked with one party and one leader.
|Source: PM Cares and PMNRF websites|
|There are numerous other questions about the transparency of the fund, why it may only have an “independent audit”, and what really was the need for such a fund, when similar (less opaque) funds already exist. All relevant questions. But if you’re getting lost in them, you’re missing the larger point.|
|“PM Cares being created now with the sole purpose of providing relief to those in need, it can be argued, shows urgency on the government’s part, shows the rich and powerful are doing their bit, shows that the state machinery is working together to help” A black hole called PM Cares fund, Newslaundry|
A death knell for funeral homes Savio
The coronavirus pandemic body count is growing. But this hasn’t translated into higher revenue for crematoriums and funeral homes.
Lockdowns and social distancing have forced people to change the way they mourn, with live-streamed funerals becoming common. But more crucially, an uncertain economic future means people are opting for no-frills services. This hits incomes at funeral homes, who also have the added cost of buying protective equipment for staff.
This means Service Corp. International (SCI), America’s largest funeral home proprietor, will not average the $10,000 it did last year on each of the 319,000 services it performed. A simple cremation with a plain-Jane urn and no reception costs around $3,000. But an elaborate funeral with a big crowd, a mahogany casket, lavish flowers and an ornate tombstone could run $20,000 or more. And the pandemic severely limits SCI’s ability to upsell the bereaved. How the Pandemic is Killing the Death Business, Forbes
|Already, the UK’s biggest funeral director has warned funeral homes could go bust without government support.|
|(The Co-op CEO Steve) Murrells said: “The lockdown requires a simpler funeral which, if the volumes continue in the way that they are, will bring a huge strain on the profitability of the market.” Funeral homes push for state help as lockdown leads to no-frills services, The Guardian|
|Funeral homes in India have a completely different problem. The death rate in the world’s second most populous country has fallen. Yes, fallen, at least in some parts, and it’s not because of fewer Covid-19 deaths.|
|But emergency room doctors, officials, and crematoriums noted that strict lockdowns had cut the number of road traffic accidents and deaths on India’s packed railways, and may also be deterring relatives from reporting a family death.|
“Road accident cases, and even patients with alcohol or drug abuse, stroke and heart attacks, have been coming in fewer numbers,” said Dr Himanta Biswa Sarma, health minister for the northeastern state of Assam. Mortality rates drop sharply in parts of India, bucking coronavirus trend, Reuters
|The report says that half a dozen funeral businesses and crematoriums reported a slump in their business, especially in April. One crematorium on the banks of the Ganges used to perform up to 30 cremations a day. It has held only 43 services since March 22.|
|What’s next for Indian cities?|
Sachi Nekkanti (reader contribution)
There is this concept called Resilience in cities. It is the ability of cities to absorb and recover from system-wide shocks like rainwater flooding in Mumbai or New York, security threats like 9/11, or more to the point, pandemics like covid-19.
According to the UN’s Organisation for Economic Co-operation and Development, cities build up resilience through four pillars—economy and innovation, good governance and leadership, a strong and inclusive society, and a balanced and sustainable living environment.
Covid-19 (and the lockdown) is a massive shock to the economic pillar of urban resilience, but the other three pillars are still standing strong. If anything, covid-19 would appear to make India’s governance structure more relevant, unified citizens for a common cause, and improved our environment (a happy side-effect of a mandatory lockdown).
There is a good chance that cities as urban systems will spring back into action and retain their urban character due to this resilience. For example, if WFH flexibility and social distancing do, in fact, lead to people migrating out of cities (a big IF), then the consequent fall in real estate prices would trigger a new influx into the city. Similarly, increased unemployment in cities due to widespread layoffs could lead to new startups formed by the now-unemployed, creating more downstream jobs and greater innovation in future business cycles. The city marches on.
However, surviving the present pandemic is just one part of the urban story. Covid-19 is not just a modern pandemic, it is the first modern pandemic. Globally, there is growing consensus that cities will need to adapt to survive, invest in strengthening public utilities like health and sanitation and increase public health spending to protect against future shocks.
|Bubble Vision Savio A lot of stock market analysts have begun dusting off the “Stages in a Bubble” chart. It was created by Canadian scholar Jean-Paul Rodrigue to show how bubbles tend to unfold in several stages. “Each mania is obviously different, but there are always similarities,” Rodrigue wrote.|
This is the chart:
|The stock market globally and in India has enjoyed a rally of sorts after the initial pandemic-induced shock. But a growing chorus of investors and analysts point out that this rally has taken markets to the “return to normal phase,” based on the Bubble chart above. |
If that’s true, what follows isn’t very pretty! Just take a look at what phase the S&P 500 and Sensex is now.
Here’s the US benchmark: the S&P 500
|Source: Google Finance|
|And here’s India’s benchmark: the Sensex|
|Source: Google Finance|
|Now we wait.|