- A welcome step that provides some relief
Prime Minister Imran Khan has announced new rules for releasing payment for government advertisements, which would entail 85 percent payment to be made directly to media outlets while the remaining 15 percent commission that goes to the agencies would be handled by the government as well. This thankfully eliminates the middleman (agencies) who not only delay payments but are also prone to defaulting on them. A further relief has been provided to newspapers who would get 100 percent payment for classified ads. This is a welcome step as it partially addresses some of the key issues that the media industry has been facing for the past few years. However, this new payment policy will not be successful if it is misused to dictate the editorial policy of dissenting media outlets. Apart from a significant reduction in the government’s advertisement budgets, close to Rs 6 billion in dues still remain unpaid.
The Coronavirus pandemic has amplified the crisis-stricken media industry’s financial woes; falling revenues and circulation numbers. Commercial advertisements have dried up significantly as economic activity in the country has come to a standstill. With government departments shut down during the lockdown, the volume of that portion of advertisement has also been reduced significantly. Circulation numbers have also nosedived due to a massive cancellation of subscriptions of newspapers over fears that they could be contaminated with COVID-19.
All these issues have presented themselves simultaneously with much intensity, while cost of doing business has not reduced in the slightest. For those media houses who make it their topmost priority to pay their salaries, it will become difficult to fulfil their obligation to employees, leading to cuts, as has been done the world over. While fuel costs may have reduced, the rupee depreciation has offset that benefit as well resulting in more or less the same fixed and variable costs. PM Khan has announced stimulus packages for the export and construction industry. Given his love hate relationship with the media means it is understandable that he cannot possibly replicate the same for them, but resuming advertisements of those newspapers and TV channels who have been placed on some sort of ‘probation’ and clearing outstanding dues, is not asking for much in these unprecedented times. Short of this, many prominent media outlets will have to resort to massive layoffs and closures. This eventuality should be avoided at all costs with the government’s much-needed help.