It was a good run for the print media in the country. After about three decades, it is just about over.
Declining of newspaper circulation and closing shops is a global trend. The scenario is no different at home. Newspapers have been slowly dying and circulation is in a downward spiral.
According to a recent report from the Bhutan InfoComm and Media Authority (BICMA), confirms the trend with some newspapers showing a decrease of more than 50 percent in the number of print runs between 2013 and 2018.
From 12 print media houses in 2012, five have closed shop.
The report found that print numbers for private newspapers have stabilised at 1,200 copies per issue (weekly), with the only national language paper printing 600 copies every week.
Gyalchi Sarshog, a Dzongkha newspaper closed down its operations in May 2019.
Despite the downturn in its print and circulation, Kuensel remains the largest newspaper in the country printing 3,000 English and 600 Dzongkha copies daily.
How it began
In 1967 Kuensel began as a government bulletin. It was reformatted in 1986 and published weekly as the country’s only newspaper. Kuensel remained the only paper till 2006, when two private newspapers hit the news stand – Bhutan Times and Bhutan Observer.
In 2008 the first privately owned daily newspaper in English, Bhutan Today, was launched followed by Business Bhutan in late 2009.
Contrary to the global trend, the country continued to see an increase in the number of newspapers. By 2012, print media had mushroomed from four newspapers in 2008 to 12 newspapers.
However, according to the report, the development of the draft guidelines for government advertisement in 2012 and the decline in government spending on advertising, which amounted to a drop of 32 percent between 2012 and 2013, reversed the trend with the closure of some newspapers. By 2018, there were only seven licensed newspapers.
Reasons for the decline
In addition to the decrease in advertising revenue from the government, the increase in use of mobile technology, high mobile data penetration, freely accessible online contents and changing demography of consumers affected the sales of newspapers, according to the report.
With changing behaviour, consumers demanded for instant and free news. Most of the people relied on various social media platforms such as WeChat and Facebook for news consumption, the study found.
The pervasiveness of television and radio, which are still one of the most reliable sources of news and entertainment for the rural masses, also brought about new set of challenges for the print media.
Following the readers, most newspapers promoted sales through e- circulation. However, it backfired. It was found that the soft copies (PDF files) of the newspapers were freely shared on social media platforms, which further affected sales and circulation of newspapers.
Recognising the global trend of “the death of print media”, the government over the years have provided print subsidies to publishing houses including workshops and trainings to improve the quality of journalism and improve news value.
However, these initiatives were confronted with another challenge that is to have print coverage in all the 20 dzongkhags. According to the report, this requirement was put in place without taking into consideration the lack of readership in various places, which adversely affected newspapers’ sustainability.
Decline in circulation and printing of newspapers
As the largest newspaper in the country, Kuensel dominated both in terms of print volume and circulation, according to the report.
In 2018 Kuensel printed 1,132,916 copies and circulated the same. The six private papers printed about 60,000 copies and circulated between 49,002 to 57,000 copies. Approximately between 4,500-11,000 copies were not circulated annually by the private newspapers, the report stated.
However, the report also stated that despite the large number of circulation in place, not all papers had their presence in all the dzongkhags.
The Bhutanese was the only newspaper found to have coverage in all 20 dzongkhags in 2018 followed by Kuensel, which had presence in 18 dzongkhags with confirmed no print presence in Gasa and Zhemgang.
The other five papers, Bhutan Times, Bhutan Today, The Journalist, Business Bhutan and Gyalchi Sarshog had coverage in about six dzongkhags.
The report stated that while the results of the survey show that Kuensel does not have reach in Samtse and Dagana, it would be erroneous to make such claims as the distributors were not located or the newspaper outlet was found to be closed during the survey period.
“A physical copy of the paper (Kuensel) was found, for which it could not be verified if it was a direct subscription or purchased through a local agent.”
The same argument could be used for the rest of the papers despite the survey showing them not to have a reach, in contrast to the claim made by the publishers, stated the report.
Unreliable public transportation for delivery was found to be one of the reasons for the declining newspaper circulation across the country.
Most of the publishers claimed to have distribution to at least 15 dzongkhags. However, bus operators/owners said that they felt their responsibility was only to take it from Point A to Point B, and it did not extend to delivery of the consignment beyond the bus terminals.
The unclaimed consignments were either stocked at bus terminals or disposed off.
It was found that five newspapers did not reach most dzongkhags. The newspaper consignments meant for the eastern dzongkhags – Trashigang, Trashiyangtse, Samdrupjongkhar, Lhuntse, Pemagatshel, Mongar, Bumthang and Trongsa were found stockpiled at the bus terminals or lost, and not delivered to distributors.
Impact of low circulation
Although advertisement is the primary source of income for all newspapers, the report stated that circulation was an important factor affecting advertisements, as it ensured visibility and reach of the newspapers.
It was found that irrespective of the publisher, the sale of newspapers were generally found to be dismal, with the survey indicating zero to negligible sales for all non-urban distributors in the country.
Kuensel had the highest sales record among all the papers for the English edition in most of the dzongkhags.
Gyalchi Sarshog’s sales number was negligent in every dzongkhag. The publisher attributed the low sales to the lack of readers for dzongkha language paper. The lower sales rate for Kuensel’s dzongkha edition could also be based on the similar argument, the report stated.
Financial performance and sustainability
According to the report, Kuensel has the highest current ratio of 4.35 amongst its competitors. A current ratio of 4.35 indicated that Kuensel has 4.35 times more in current assets to cover its current liabilities.
The current ratio is a liquidity and efficiency ratio that measures a company’s ability to meet its short-term obligations (current liabilities) with current assets. It measures whether a company has enough resources to pay its obligations over the next 12 months.
The larger the ratio, the better it is financially.
Bhutan Today and Gyalchi Sarshog had current ratios below 1 (0.73 and 0.53, respectively).
Kuensel also had a healthy debt to equity ratio, which indicated that the paper is more reliant on equity financing than debt financing.
The debt to equity ratio is a solvency ratio used to measure the financial health of a company. It shows the proportion of debt and equity a company is using to finance its assets.
A high debt to equity ratio indicates that the company is using more debt, which can subject the company to more risk in the event of a decline in business since minimum payments will need to be made irrespective of whether or not the business has hit hard times.
The Bhutanese had a debt to equity ratio of 4.87, which indicated that the company has 4.87 times more liabilities than equity.