Last month, the management of the Express Tribune, an English language newspaper in Pakistan, broke the news that every working journalist dreads. Without any prior notice, more than a dozen reporters and photographers were asked to resign with a cheque covering three months pay. Many opted out without a fight.
“At least we got some money and provident fund. Situation is really bad elsewhere. People haven’t been paid for months,” one of them told TRT World.
Owned by the Lakhanis, a business family that once sold cigarettes, Tribune is one of many news organisations where a financial crunch has resulted in job losses.
In some companies, employees have been forced to take pay cuts. News channels have discontinued primetime shows. At least one national channel has closed doors and Dawn, the most respected English-language daily, has cut down its daily expenses by reducing the number of pages.
While TRT World couldn’t find an exact figure of dismissals in Pakistani media, multiple sources say the number is in hundreds. Ahmed Malik, a Karachi-based senior journalist, says things are likely to get much worse: “From what we understand, this is just the start and more layoffs are expected in future.”
But what went wrong? From only one state-run channel two decades ago, the country’s media landscape has completely changed with more than 80 channels now offering 24/7 news and entertainment shows.
Besides established media houses such as Jang, which started from a newspaper business before diversifying into television journalism and becoming a broadcast behemoth, new entrants also jumped into the fast-growing media industry.
“People who were in the business of selling edible oil and running bakeries have opened up news channels. They didn’t think about their business model. They wanted media influence to safeguard other commercial interests,” says an executive of a news channel.
But as news and entertainment channels flourished, new jobs were created for journalists, actors, technicians, graphic designers and video editors.
That boom was one of the positive outcomes of the country’s growing economy, as big corporate houses and multinationals began to spend large sums on newspaper and television advertisements. Now the country is facing hard times.
“Corporate advertising spend has decreased by 25 per cent in the third quarter (July-September) this year. And there is no indication of its getting any better,” a top official of another news channel told TRT World.
Pakistan is negotiating a bailout with the International Monetary Fund to avert a balance of payments crisis. Its foreign currency reserves have plunged too. The rupee, its currency, has lost 36 per cent of its value against US dollar in the past 12 months.
Multinationals, which are biggest advertising spenders, earn in rupees and repatriate profits to their head offices in dollars. Because of the exchange rate disparity, they are curtailing the most dispensable expense – advertisements.
Industry sources say overall marketing budget, which includes newspapers, websites and the channels, stands at approximately $670 million.
Raza Rumi, a Pakistani journalist and policy analyst, says there has been a major shift of advertisements from news to entertainment shows.
“It has to do with how media engagement has come to work in Pakistan and that is in shape of talk shows. That affected professionalism and that’s something media houses have to introspect about,” he told TRT World.
With declining influence of newspapers, popular anchors have come to dominate the airwaves in Pakistan. The evening talk shows have become a key source of income for media companies. The primetime shows drive high viewer ratings, an essential indicator to determine the price tags for advertisements.
The race to get the best host has bloated salaries of anchors to as much as $37,000 a month. That’s manifold compared to $350 a month that many reporters and lensmen make.
Mian Amer Mahmood, CEO of Dunya news channel, concedes that intense competition between media groups has destabilised the market.
“All of us have tried to poach people from each other by outbidding the salaries. Now the question has become of viability and I think the industry going through a correction,” he notes.
His company’s employees have been made to take a pay cut of between 10 per cent and 35 per cent: “Everyone is suffering but at least we have made sure that anchors take the biggest hit.”
He says that, as part of the austerity measures, Dunya has also suspended two of its primetime shows.
Just days after Dunya employees were told that their pay cheques were being slashed, Mahmood ventured into the aviation business, buying a commercial airline licence which requires the acquirer to show paid-up capital of Rs 500 million (equivalent to $3.7 million).
Multiple private airlines have gone bankrupt in Pakistan owing to the poor economics, while owners of media groups have pointed fingers at the new government of Prime Minister Imran Khan for some of their troubles.
A big share of the advertisement revenue, by some estimates as much as half for a few channels, comes from the government and its departments. There has been a substantial decrease in that, the CEO of Karachi-based marketing agency told TRT World.
Another factor behind the current problems has to do with Medialogic, a Lahore-based company that gathers viewer data to compile media ratings.
Industry sources say that the company hasn’t compiled ratings for three months owing to a legal case, compounding the financial crunch.
Medialogic’s CEO, Salman Danish, didn’t respond to requests for comments. Some people say the government is using the advertisement blockade as a tool to silence critical voices in the news media.
Rumi, the policy analyst, says there have been at least four high-profile cases where journalists known for their anti-government stance have been fired: “On the other hand, the media owners may also be using this as an opportunity to rightsize their organisations.”
Officials say that past governments have propped up friendly media groups with heavy subsidies for favourable coverage – something that is no longer happening.
Pakistan’s Information minister, Fawad Chaudhry, says government advertisements make up 18 per cent of a channel’s revenue on average.
“But if a channel relies on government for 60 per cent of its funding then it’s not viable. We can’t use taxpayers’ money like that,” notes the minister.
With respect to the outstanding dues, he says half of the $9.6 million has been released to media houses. “And what you think owners of these channels did? They kept all of the money for themselves instead of paying their journalists.”