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Ruin of Newspapers - Politics or Economy?

Ruin of Newspapers - Politics or Economy?
06.05.2009

To the Day of the Soviet Press the American financier Warren Baffet considers that printing editions do not have future. He stated his opinion in the annual letter to shareholders of the company "Berkshire Heartaway". The message maintenance became known to the American newspaper "Wall Street Journal". Baffet asserts that there is a high probability that newspapers will incur infinite losses, - he said. As he said, newspapers always were of great importance in the American society and because of it attracted great number of advertisers.

 

However recently, Baffet noted, "there was a big recession in incomes of newspapers from advertising". Newspapers ceased to play former role as news became accessible from other sources including the Internet. The financier whose company has big share holding of the newspaper "Washington Post" recognizes that this part of his business "will experience difficulties".


From edition: One shouldn't be "oracle from Omaha" to pay attention to the decrease in circulations, influence and as a result incomes of newspapers and magazines. All international associations of publishers have been talking about it for several years. Against financial crisis their position becomes even worse, that is natural.

 

If to study the lay of things with printing mass-media in the Russian market being before catastrophe of 1991 the largest in the world ("the most reading country", etc.), it is possible to pay attention that decrease of circulations became catastrophic much earlier, than in the West. It was connected with the decrease in a standard of living and simultaneously with sharp growth of additional charges - subscription from convenient mean of reception of newspapers and magazines became luxury. Today it seems improbable that circulations of thick magazines were estimated in millions - "Novy Mir" had circulation in 2 millions! The newspaper "Pravda" which first flimsy became a starting point for Day of the Soviet Press had circulation in 12 millions, while two Soviet newspapers - "Trud" and "Arguments and Facts" with more than 30 millions were circulation champions!

Today it's simply impossible to imagine such circulations. Though that was no grants, newspapers and magazines were really profitable - financial reports of the Central Committee of the CPSU say that the party press was an essential element of replenishment of party fund. Means from newspapers went on construction of printing houses and many-storey bulks of editorial offices, hundreds and even thousand people worked in the staff.

Position of even leaders of the Russian market looks simply poor on such a background.

By the way, falling of that market in the USSR was not predicted - on the contrary, new publishing-typographical complexes in the province which then were balancing many years on the verge of bankruptcy were constructed under sharp growth of circulations of the reorganization period, now their business is based not on printing of newspapers and magazines but on other printing products up to the wrapping.

At that this catastrophe on the journalese market happened long before Internet introduction in mass using. Probably, Baffet is rights only by halves - he correctly predicts decrease in the market of printing mass-media (it has been already taking place) but he incorrectly connects it exclusively with replacement of printing product by more technological transmission facilities. The process is more difficult and delicate.

If we scrutinize example of the USSR and Russia, we will see that decrease of demand for printing mass-media was preceded by sharp growth of demand which was defined first of all by political reasons - perestroika, publicity, possibility to learn that seemed to be "taboo" and even to get illusion of personal participation in political process. Not casually the biggest growth in world history of press was shown by "Arguments and Facts" grown from approximately one million copies of bulletin of the society "Znanie" up to more than 30 millions of the largest newspaper of a planet. Let's note that at that time only two professional journalists worked in the staff - the edition "grew" exclusively at the expense of publication of earlier "forbidden" political materials.

It is natural that when exclusive position of "AiF" disappeared, the demand fell - approximately up the same level as the bulletin of society "Znanie" had. Other mass-media got approximately the same proportion - but for, say, such newspapers as "Pravda" - here exclusive position of the main newspaper of the country disappeared as well as the party which had that newspaper as one of the elements. It would be strange if the party died while its element continued to be claimed by 12-million circulation. Present position of "Pravda" rather precisely reflects true role of the Communist Party of the Russian Federation in the market in public consciousness.

In due time there was an opinion that crisis and disintegration of the USSR delayed system crisis of world capitalist system for a while. They talked about it and forgot, though there's quite big share of truth in it. Looking upon some processes in the late USSR is possible to find analogies with what's happening today in the leading world markets. In the time of the USSR they were talking about disproportions which were the result of planned economy - today we observe even bigger disproportions which appeared against global domination and global regulation. Economists of perestroika time gave hell to notorious "press" which let out ostensibly not provided roubles - today each schoolboy knows that FRS lets out not provided dollars in much bigger scales.

The market of printing mass-media is only a special case in the global markets. Internet has nothing to do with it - it's not network mass-media which superseded printing ones, it is the consumer was compelled to replace lacking information with more adequate means. Decrease of circulations led to leaving of a part of readers to Network, not vise versa - who would pay for the newspaper through the nose, if it's possible to get information more fully and much faster?

I will remind that newspapers in the USSR cost 2,3, 4 copecks. It seemed then that prices for mass-media in the USSR were meaningly underestimated to strengthen propaganda effect at the expense of availability. Whether it turned out to be vise versa - the price for the newspaper in some roubles (or from 0,25 to 1,5 dollars) is exclusively overvalued (not edition is monopolist, of course, but distribution network, producer of paper, etc.) and eventually the markets do not maintain such clip joint and turned off? As there is an adequate replacement?

All the more so nobody for some reason speak about destruction of the market of printing mass-media due to subsidized free newspapers directly from the budget being issued in huge circulations as it is in Moscow? The fact that they have not been superseded simple newspapers which are being sold for money is connected only with their monstrous professional level.

While society did not become less reading and less ideology-driven. It only learnt to count copecks - crisis, there's nothing to be done...

Аnatoly Baranov, editor-in-chief of FORUM.msk

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