I am continually amazed by my friends who give me this answer, especially when they sell legal services, clothes, flowers, university courses and everything else under the sun. To live, you have to sell something. It’s a fact of life.
News stories are what we “sell” at the Kyiv Post. Although journalists don’t like to think of it in those terms, that’s the way it works. Don’t get me wrong. We never engage in “jeansa,” the corrupt practice in much of Ukrainian journalism of writing stories in exchange for money.
Ours is a simple and traditional newspaper business model that separates news from advertising: The Kyiv Post sells advertisements that are placed on the same pages as news stories. Companies and people buy the space because we distribute to readers they want to reach or, in some cases, because they simply want to support the newspaper.
For the better part of my career, this model worked beautifully. It’s now dying, however.
Until 2006, the money simply poured in – keeping newsrooms full of enterprising journalists who had the time to cover events, meet people, study documents, travel to the story and investigate wrongdoing.
According to the Newspaper Association of America, American newspapers got a record $49 billion in advertising revenue in 2005 and came close again in 2006. By 2011, the number tumbled to $23 billion – less than half of the peak — and it continues to slide.
Most of that revenue came from print advertisements, with online revenue still only providing a tiny sliver of the amount.
In Ukraine, the advertising climate is even bleaker. The rough figure from the All-Ukrainian Advertising Coalition is $1 billion spent annually on all forms of media advertisement – print, TV, billboards, radio, etc.
But it all worked well enough for the Kyiv Post to remain profitable from 1995-2008 – so profitable even that the newspaper spawned other businesses, such as our Russian-language former sister publication, Korrespondent magazine, more than a decade ago. All the while, the Kyiv Post’s print and online editions (until March 1) remained free to readers.
There are only two business models in Ukrainian media, and neither of them is healthy.
There is the oligarch model and the market model.
The oligarch one dominates Ukraine. Five wealthy and highly political Ukrainian men own most news outlets in the nation. Independent journalism and profits are not their priorities. They run their media outlets as levers of influence and control, insurance policies for when the going gets rough, as it often does in Ukraine’s brutal economic, legal and political world.
As for the market model, the bleak revenue figures show the challenges facing newspapers in Ukraine and the world. Increasingly, this challenge is being answered by “pay walls” – charging newspaper readers to read the stories on their websites.
I wish newspapers would have started charging from the start of the Internet age. It’s a self-defeating business model to give away for free online what costs money in the printed form. But, until recently, newspaper publishers thought they could sell enough online advertising to replace the loss in print revenue. Then they woke up to the reality that this will never happen – the prices for online advertising are simply too low.
If newspapers had charged readers at the dawn of the Internet in the 1990s, then they may have been able to preserve their franchises and not lose so much in employment and other classified advertising revenue that simply disappeared. The money went to Google and other online advertising geniuses, none of whom report the news that is vital to democratic societies.
I have never liked to get too close to the advertising side of the business because I’m too old school – keeping news separate from advertising is simply a matter of maintaining readers’ trust and the newspaper’s credibility. We’re not in the pockets of any advertisers or any politicians.
The Kyiv Post’s owner and publisher, United Kingdom citizen Mohammad Zahoor, has kept this policy of editorial independence alive. It dates back to the Kyiv Post’s founding in 1995 by American Jed Sunden. But Zahoor’s willingness to invest in and subsidize the newspaper’s financial losses, as he has since taking ownership from Sunden in 2009, is coming to an end.
The situation is not dire yet, but could be soon. Newspaper print revenue still covers most of the expenses, which are not large in the sense that nobody here is getting rich. “Getting by” would be a better description for how most of us live.
However, online subscriptions and other non-traditional forms of revenue – conferences, editing services, special supplements and anything else we can think of doing ethically – will be needed to fill the gap.
Unlike selling advertising, which is properly a forbidden conflict of interest for a journalist, I have no problem hawking subscriptions to a newspaper that I love and believe in.
I also look upon paid subscribers to the newspaper differently – they are the public for whom we work and they demand quality, independent journalism. Most of our advertisers are also in this category.
I think that the printed newspaper still has a future, especially in Ukraine, where readers flock to kiosks to get their daily news fix from newspapers and magazines.
I am also heartened to see that people smarter than I am, including “the Oracle of Omaha,” billionaire Warren Buffett, agree. He’s been on a spending spree, buying up newspapers in smaller U.S. cities where he sees strong relationships between the newspaper and its advertisers and readers.
Ours is also a community newspaper. But our community is global.
While more than 95 percent of our print readers live in Kyiv, most of our online readers – the ones the Kyiv Post is counting on to buy online subscriptions – live abroad, mainly in the United States, United Kingdom and Canada.
I hope the Kyiv Post is one of those strong community newspapers with a bright future, the kind that Buffett has been buying up in the United States. Our readers will answer that question.
A Kyiv Post online subscription is, after all, cheaper than roses and, I would argue, a better deal. At least it lasts longer.
Kyiv Post chief editor Brian Bonner can be reached at [email protected].
