WHAT should be the cost of a newspaper? US$2? A penny? The same as a cup of coffee? Others believe different amounts for different people.
All answers are applicable today depending on the cost structure at play; at least in normal economies where it is still possible to predict what tomorrow holds.
Forces at play in Zimbabwe over the past five years have however been such that pricing models for newspapers have gone out of kilter with generally accepted international norms mainly premised on affordability.
There is a strong case for concluding that newspapers in Zimbabwe have become very expensive both in real terms and in hard currency terms.
Last week the cover price of the Zimbabwe Independent went up to $70 billion and the reaction from the readership was predictable. A regular reader confronted me with facts and figures on Saturday.
He said the Independent now cost R20 or US$2,50 at the parallel rate conversion! He pointed out that the Star in South Africa cost R4,50, the Mail & Guardian R16,50 and the Sunday Times R12,50. I can as well add that the Washington Post cost US50c and USAToday US75c.
The situation obtaining in the pricing of our newspapers resonates throughout the economy. There are fundamental problems in this economy which have worsened since the last election. Prices of goods and services have gone up; not just in sync with the Zimbabwe dollarâ€™s daily rollercoaster drop but in real terms.
The problems in the newspaper sector are dire and worsening by the day. Advertisers and readers have no doubt been concerned at the movements in the cover prices and advertising rates of our newspapers. The Zimbabwe Independent does not own a printing press where we can control the costs of production . All our printing is subcontracted to commercial printers who charge for this service.
It is the movement of printing charges which has been the major driver of the steep rise of the cover price. The printing charge as at the end of May was $454 billion to print one section (eight pages). At the end of the first week of July this charge had risen to $61,5 trillion, an increase of 13 426%.
The high printing costs are despite the fact that we supply the printer with consumables like plates and film which are all imported. Comparatively, in the same period the cover price went up from $800 000 to $70 billion. This has necessitated a weekly increase in cover prices and advertising rates in order to cover these escalations in printing costs.
Similarly most of our newsprint is imported and we pay huge amounts in customs duty that is calculated at the inter bank rate. In a period of just six weeks between May 27 and July 8 the inter bank rate moved by 3 128%. However, over the same period both the Old Mutual implied rate and the parallel rate in which goods and services are priced in the country have moved more than five times this rate. Huge increases in costs of printing plates, fuel and other consumables have further compounded the problem.
These movements in prices are having a devastating impact on the viability of our publications as the cost of producing a newspaper literally doubles each week. However, we are often unable to increase our cover prices and advertising rates immediately in response to this. In the case of magazines and supplements this is further worsened by the time lag between the sale of advertising space and actual production that at times runs into months. A case in point is the Quoted Companies Survey Magazine, where selling for adverts was completed in May for the launch in June, which has had to be postponed due to the election run-off. Meanwhile the cost of printing the magazine continues to escalate exponentially.
But there is no hiding the fact that the newspaper industry in Zimbabwe is at the mercy of exogenous factors which have raised the premium on information to become a luxury commodity. This is a worrying phenomenon in a world environment where newspapers are under pressure from free sheets and the internet. Publishers and editors today believe readers should not pay more for news. In fact others are throwing freebies at readers in the form of free sheet and online news.
Two years ago â€” Rupert Murdoch, who instigated the price battles of the 1990s by slashing The Times to 10p â€” introduced a new free newspaper thelondonpaper, while Associated Newspapers responded with its free version of the Evening Standard â€” London Lite. London commuters suddenly found themselves with two free papers thrust at them on their way home, all without putting their hand in their pocket.
This was the culmination of a media price war which Murdoch made and subsequently ended. The introduction of free sheets could be a brilliant marketing ploy in the cutthroat competition of the UK market but definitely a suicide note for the local industry where the price of inputs has conspired to make news expensive.