Gray days for RI's colorful print media

Berni K. Moestafa, The Jakarta Post, Jakarta

Strolling past one of the many sidewalk newsstands Jl. Sudirman, one's eyes will inevitably glance at the headlines of the many newspapers, magazines and tabloids on display.

"The government guarantees fuel prices won't rise again," says the country's largest daily, Kompas. "Maudy Koesnaedi is ready for another sacrifice," reads Citra, a celebrity tabloid, and "Watch out, Salim is back," screams the weekly magazine Forum.

Alluring as they may be, the colorful choices of today's print media do not reflect a booming business.

Readers and journalists relish the country's new press freedom, but not so those involved in the business end of the print media.

Publications must cope with higher costs, a stagnant market and a surge in new competitors.

"Natural selection in this industry is brutal," the chairman of the Indonesian Press Council, Atmakusumah Astraatmadja, said on Friday.

Especially for newcomers. New publications hit the market when Soeharto fell, but many did not last.

According to Atmakusumah, the number of publications across the country grew about fivefold after Soeharto's fall from around 200 previously.

"Since 1998 we has some 1,300 different publications, but by mid-2002 that had dropped to about 700," he said.

The end of Soeharto's reign, he said, ignited a euphoria among wanna-be publishers, who unfortunately had neither the experience nor the skill to do it.

He recalled one newspaper that managed to print just one edition and was shut down after its publisher was arrested for libel.

However, many dubious tabloids and newspapers still adorn the newsstands today.

While praising their effort to endure, Atmakusumah bemoaned the quality of some of the articles, which he called "a complete mess in terms of language, structure and content".

Analysts acknowledge the new freedoms, but few take into account the impact of the economic crisis.

"The new opportunities like no restriction on the number of pages, are what has helped so many publications survive (the crisis)," Kompas chief editor Suryopratomo said of the changes brought about by the political reforms in 1998.

"Economic conditions, however, remain tough," he added.

Blame it on the 1997 economic crisis, which drove up the cost of imported paper and ink while at the same time sapping advertisement and sales revenue.

Publishers had to offset the soaring costs by raising prices and advertising rates. It was a difficult move amid the slump in purchasing power.

Over the past two years, the economy has been sputtering along at about 3 percent growth from over 6 percent previously, but some are still spending.

This helps explain why Indonesia recorded Asia's highest growth in advertisement spending last year.

Ad spending reached US$531 million in the first quarter of 2002, or a 39 percent increase from the same period a year earlier, according to research by PT AC Nielsen Indonesia.

Growth in ad spending exceeded that of China, which ranked second, and in terms of money spent trailed only Singapore and Malaysia.

This would have been good news for the print media had it not been for AC Nielsen attributing the growth to five new television stations entering the market. Companies spent 32 percent more in ad spending for the country's 11 television stations, according to the research firm.

While television stations ate into the print media's ad revenue, the print media actually grew more dependent on this source of revenue, said Kompas' Suryopratomo.

He said a healthy publication could earn an equal amount of revenue from advertising and subscriptions, and normally the split was 60 percent from ads and 40 percent from subscriptions.

But ad revenue now accounts for 70 percent or even 80 percent of some publications' total revenue, he said.

The chief editor of leading weekly magazine Tempo and Tempo daily, Bambang Harymurti, has a different view.

Advertising is supposed to drive revenue, according to him.

Pointing to the U.S. print media, he said newspapers there were sold at a lower price than here but readers still got more in terms of both quality and quantity. "And consider that Americans earn more than we do," he remarked.

He said the profit margin for a single copy might be slim, but this was more than compensated for by higher ad revenue as circulation increased.

For example, the daily circulation of the Los Angeles Times reaches 1.5 million copies, while the daily circulation for Kompas is up to 500,000, according to Atmakusumah.

"Many newspapers haven't managed to reach an economy of scale," Bambang said, referring to boosting volume to the level where the production cost per unit is at its lowest.

"There has to be consolidation in order to boost circulation," he said.

Television stations, meanwhile, pose a different threat to the print media.

Along with other forms of media like the radio and Internet, television stations are forcing the print media to change, or face losing readers.