A modest business proposition makes its mark
Looking back over 20 years, we can take pride that The Jakarta Post has come a long way in establishing itself not only as the English-language daily of record in the country, but also earned a place among the major national newspapers.
Our readership profile today attests to these achievements. We are not a paper targeted for and read solely by the expatriate community, as Indonesians now make up the majority of our readership (a full 55 percent, according to our latest readership survey).
In short, we have managed to establish our credibility and gain the trust of a sizable number of people in this country, as well as those abroad who can access our website (www.thejakartapost.com).
As a business entity, The Jakarta Post's success has been decidedly modest. Twenty years in business is a long time, and most other companies in Indonesia would have expanded, diversified and become a conglomerate (and then probably gone bust, but that's another subject).
Today, PT Bina Media Tenggara, the publisher of The Jakarta Post, remains a modest-sized company, relying chiefly on its single product to generate most of its revenues. There are other products and services that the company or its subsidiary manage, such as the distribution of the International Herald Tribune and The Jakarta Post website, but the daily newspaper remains the flagship of the company.
Return-mind investors would probably have pulled out a long time ago to seek better business opportunities elsewhere, but it has not been the case with the backers of The Jakarta Post.
The newspaper was established in 1983 by a consortium of major publishing houses. Given their background in the publishing business, making money, while important, was never a defining motive.
The founders were PT Nawala Nusantara Bangsa (proprietor of Suara Karya daily newspaper), PT Gramedia (publisher of Kompas daily newspaper), PT Grafiti Pers (publisher of Tempo newsweekly) and PT Sinar Kasih (publisher of Sinar Harapan, now renamed Suara Pembaruan). Harmoko, who was chairman of the Indonesian Journalist Association (PWI) in 1983 and then become minister of information between 1983 and 1998), also had a minority equity.
In compliance with the press law, the founders also decided to give 20 percent of the equity to employees through their foundation, with 10 percent allotted in grants and the remainder paid out in dividends.
From the beginning, however, there was the realization that to be able to serve its readers on a sustainable basis, the company had to be profitable.
But we have also learned over the years that serving our readers well brings greater recognition and acceptance, with an attendant, positive effect on that important bottom line.
That the Post was a viable business proposition became apparent as early as 1986. Only three years into the business, the company turned a profit, although it only started paying dividends the following year. This is significant given that publishing is a tough world and most companies are not expected to turn a profit until their fifth year.
The Post's readership grew over the years, taking off in the 1990s and enjoying relative prosperity until the financial crisis struck the country, and the publishing industry, in mid-1997.
From average daily circulation of 8,557 paid copies in 1983, readership grew to 22,216 in 1990, reaching 47,504 in 1997. In fact, average daily circulation surpassed 50,000 during the middle of that year. Untoward circumstances have caused average daily circulation to dip since then, reaching a low of 38,844 in 2001 (see graphic).
Readership is not the only number that we look at. Also important, especially from the business point of view, are advertisements, ultimately the bread and butter in a newspaper's survival.
The ad numbers are significantly better than those for circulation, meaning that in the corporate world, The Jakarta Post has become recognized as an effective medium to communicate with the public.
Since we are not a publicly listed company, we are not in a position to disclose our figures, but suffice to say that advertising has long taken over from subscriptions as the newspaper's main source of revenue.
Advertising in 2001 accounted for nearly 63 percent of all revenues of PT Bina Media Tenggara. This is a fine ratio for a newspaper, as anything above 50 percent is considered healthy in the industry globally.
Rapid growth in circulation and advertisements from 1990 to 1997 was tied to the country's economic boom. Globalization was accelerating, with English the currency of communication in a shrinking world. The Jakarta Post became a must-read for more and more people in Indonesia, locals as well as expatriates.
Then came the financial crisis, which hit us just as hard as other publications in the newspaper industry. We quickly switched from the growth track of previous years to survival mode.
The Post embarked on various efficiency measures. While we did not downsize our company, we had to downsize our product, albeit temporarily, in 1998, when we temporarily returned to the eight- page edition of our early years in place of 16 pages.
Since 2001, The Jakarta Post has undertaken sweeping changes face a new, more democratic -- and therefore more competitive -- environment. While we believe that Indonesia will eventually return to the high economic growth of the 1990s, we also know that growth of our newspaper cannot be taken for granted.
Yes, the Post strives to be a public institution of trust. And, yes, we are also a company that endeavors to grow. We believe it is possible to achieve both goals without compromising our principles.
In weathering the difficulties of our early days and recent years (the two other English-language newspapers folded), as well as in savoring the good times, we have relied on the continued patronage of our loyal readers and advertisers. Today, we share this special milestone with all of you, and look forward to continued success in the future.