Jordan’s print newspapers are in a tough spot, with little hope for a turnaround for their classical business model.
Jordan’s print newspapers are in a tough spot, with little hope for a turnaround for their classical business model.
The
print newspaper industry in Jordan is under stress. Al Rai –Jordan’s largest
daily newspaper- and ADDustour – one of Jordan’s oldest newspapers- both
reported continued losses in 2014. Al Rai’s net loss widened by 153% in 2014,
and reached 2.63 million JDs, up from 1 million JDs in 2013. For its part,
ADDustour managed to reduce its loss in 2014 92% to stand at 322,000 JDs, down
from 3.8 million in 2013. Cumulative losses have shattered Shareholders’ equity
in Addustour which was a mere 49% of paid up capital by end of 2014. Addustour
newspaper is currently facing a severe cash flow problem.
The
two newspapers suffer from declining revenues and pressured margins. The
combined advertising revenues of the two newspapers steadily declined between
2010 and 2014. Total advertising revenues of the two newspapers reached 25.4
million JDs in 2010 and collapsed by 30% to 17.8 million JDs in 2013.
Circulation
revenues (from newspaper sales and subscriptions) are also in a steady decline.
Total circulation revenues of the two newspapers were 2.48 million JDs in 2013
compared to 3.65 million JDs in 2010. A drop of 32%. Al Rai reported further
drops in the first three quarters of 2014 while ADDustour detailed revenues for
2014 are not yet available.
The
cases of Al Rai and ADDustour are indicative of the massive challenges facing
traditional print media in Jordan at large. The drop in advertizing and
circulation revenues is most probably caused by a combination of slower
economic growth in the country as well as the increasing adoption of broadband
Internet and smart phones in the country. Jordan’s fixed and mobile Internet
account penetration (total subscriptions divided by total population) reached
25% in 2014. This suggests that some 40 to 50% of Jordanians are Internet
users. These increasingly rely on the Internet for their news consumption.
Online classified ads, social media and ecommerce also chip away at the utility
of print advertising.
The
two newspapers should devise clear strategies for a turnaround that sheds the
old business model. Both must have clear online and mobile strategies that
leverage their journalistic core to offer compelling online content on all
platforms away from their currently quite traditional web pages. Print editions
should be streamlined for maximum cost efficiency with an editorial focus on
analyzing the news rather than breaking them (generally readers now see
breaking news on TV or online not through print newspapers). Both would be best
advised to develop compelling HR policies and bonus structures that encourage
their journalists to exert all their efforts for the organization rather than
run their own privately owned online news sites on the side. And both should
realize, sooner rather than later, that print journalism will never return to
its past glory days. The focus is about managing the decline in print while
establishing a sustainable new business model online.
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