Jordan’s Daily Print Newspapers Under Pressure

March 25, 2015

Jordan’s print newspapers are in a tough spot, with little hope for a turnaround for their classical business model.

By Jawad J. Abbassi

The print newspaper industry in Jordan is under stress. Al Rai, Jordan’s largest daily newspaper, and ADDustour, one of Jordan’s oldest newspapers, both reported continued losses in 2014. Al Rai’s net loss widened by 153% in 2014, and reached 2.63 million JDs, up from 1 million JDs in 2013. For its part, ADDustour managed to reduce its loss in 2014 92% to stand at 322,000 JDs, down from 3.8 million in 2013. Cumulative losses have shattered shareholders’ equity in Addustour, a mere 49% of paid up capital by end of 2014. Addustour newspaper is currently facing a severe cash flow problem.

graphs-01The two newspapers suffer from declining revenues and pressured margins. The combined advertising revenues of the two newspapers steadily declined between 2010 and 2014. Total advertising revenues of the two newspapers reached 25.4 million JDs in 2010 and collapsed by 30% to 17.8 million JDs in 2013. Circulation revenues (from newspaper sales and subscriptions) are also in a steady decline. Total circulation revenues of the two newspapers were 2.48 million JDs in 2013 compared to 3.65 million JDs in 2010 – a drop of 32%. Al Rai reported further drops in the first three quarters of 2014, while ADDustour’s detailed revenues for 2014 are not yet available.

The cases of Al Rai and ADDustour are indicative of the massive challenges facing traditional print media in Jordan at large. The drop in advertising and circulation revenues is most probably caused by a combination of slower economic growth in the country as well as the increasing adoption of broadband Internet and smart phones. Jordan’s fixed and mobile Internet account penetration (total subscriptions divided by total population) reached 25% in 2014. This suggests that some 40 to 50% of Jordanians are Internet users. These increasingly rely on the Internet for their news consumption. Online classified ads, social media and e-commerce also chip away at the utility of print advertising.

The two newspapers should devise clear strategies for a turnaround that sheds the old business model. Both must have clear online and mobile strategies that leverage their journalistic core to offer compelling online content on all platforms away from their web pages, which are currently very traditional. Print editions should be streamlined for maximum cost efficiency with an editorial focus on analyzing the news rather than breaking them (generally readers now see breaking news on TV or online not through print newspapers). Both would be best advised to develop compelling HR policies and bonus structures that encourage their journalists to exert all their efforts for the organization rather than run their own privately owned online news sites on the side. And both should realize, sooner rather than later, that print journalism will never return to its past days of glory. The focus should be on managing the decline in print while establishing a sustainable new business model online.

Jawad J. Abbassi is the founder and GM of Arab Advisors Group. He can be contacted via his email: [email protected]

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