A modest business proposition makes its mark

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.