Today on BusinessLoungeLK's journey to bring you the voices of Sri Lankan business professionals and their key insights into Sri Lanka's competitive business environment, we are honoured to have on Mr. M. Senthilnathan the COO (Chief Operating Officer) of Express Newspapers.
1.) Virakesari is a newspaper agency which has a rich history spanning all the way back to the 1930’s. How did Virakesari first start and how has it developed into the agency it is today?
In 1927 Mahatma Gandhi came to Sri Lanka for a visit and he had many meetings all over the country to promote independence. One of the traders who came from India called PPR. Subramaniam Chettiar (who had come to Sri Lanka in 1925) went to one of Mahatma Gandhi’s meetings which was held in Galle Face in 1927. Mahatma Gandhi himself was a writer and a journalist and he owned his own newspaper and magazine agencies in India where he promoted democracy. Mr. Subramaniam was inspired by the speech that Mahatma Gandhi gave in Galle Face and so he asked his friend who attended the meeting with him, “Why don’t we start our own newspaper agency in Sri Lanka promoting independence?”.
So, they decided to create their own newspaper agency inspired by Mahatma Gandhi’s speech. Since they were from India, they decided to focus the newspaper on the Indian community in Sri Lanka. That is how Virakesari first started, and so this agency can trace its roots back to Mahatma Gandhi himself.
The very first print was only eight pages long and it was first distributed upcountry as well as in Colombo. However, in 1956, after Sri Lanka got its independence in 1948, the government brought some new legislations into effect, and one of those legislations was that media companies could not be owned by non-Sri Lankan citizens in Sri Lanka. Since Mr. Subramaniam had an Indian passport, he had to choose whether he was going to convert it into a Sri Lankan citizenship or if he was going to leave the business and go back to India. Ultimately, he decided to go back to India to be with his family, so he transferred the business to a local businessman called Mr. R.A.Nadesan who was a printer himself.
In 1972, Mr. R.A.Nadesan decided that it was in the best interest of the company to have more leaders onboard to expand the business. So, he gathered a group of businessmen and created a company called Express Newspapers Ceylon Limited (which Virakesari was under) and he introduced a powerful board of directors who were prominent businessmen within the Indian community to advise and steer the company forward to grow sustainably.
Express Newspapers has been striving ever since then and this is how Virakesari developed into the agency it is today.
The Effects of the Pandemic on the Newspaper Industry
2.) How did the coronavirus take a toll on traditional newspaper agencies in Sri Lanka and how did you overcome the challenges it posed to the circulation of traditional newspapers?
After 2001, we started to make some drastic changes to the direction that the newspaper was taking. Virakesari had become the national newspaper of choice for the Tamil speaking community in Sri Lanka and for a long time we had been focused on maintaining that standard. However, after 1997 we branched out and started an English language newspaper and later a Sinhala language newspaper as well, and for our English newspaper we were even able to partner up with prominent foreign newspaper agencies like The New York Times. Additionally, we also focused on building different platforms which specifically targeted a wide number of demographics to further increase their engagement with our content. For example, we started a newspaper line which was geared more towards the younger generation by including content that they were more likely to engage with. So, we started 16 different publications to target different demographics, and these were some of the initiatives that we focused on.
However, in March when the pandemic hit Sri Lanka, it had a drastic impact on the whole industry. In the first week or so we had no idea what to expect as the pandemic slowly engulfed the nation, but it soon dawned on us that it wasn’t the writing or publishing aspect of the business which was going to be disturbed, it was the distribution part. Firstly, we found it difficult to transport the papers to the relevant distribution points, but what was even more severe was the fact that there were no one to buy the newspapers because of lockdowns.
So, we had to take some crucial decisions. What we understood was that the first question people will be asking is “what is happening?” as the pandemic rages on in the country, and thus we understood that people will still need a source of information to stay updated. So, we decided to push our newspapers online and let people read free of charge. This was an important decision because it helped us keep the business running even though it imposed a cost on us as it maintained our brand image as well.
Slowly as the peak of the pandemic started to reduce, we decided to restart printing and sell our newspapers once again, but even as we were passing the worst of the pandemic, we decided to still offer our newspaper for free for a little while longer. We decided to do this because we understood how drastically people and their income levels had been affected, and as we are a big corporation were able to incur some expenses on our end to keep our readers informed about the latest developments whilst also helping them maintain the habit of reading.
3.) As world prices kept increasing and logistics prices soared, how difficult was it to control the costs of publishing the newspaper whilst also balancing the consumers expectations when it comes to the retail price of the newspaper?
So, as I mentioned earlier, we distributed our newspapers free of charge to our customers when the pandemic first hit, and we continued to do that well up to June. However, as I mentioned earlier this came at a huge cost to us because we had to deal with the rise in the costs of production.
There were four areas in which the cost of production had increased drastically. The first area was in raw material costs. This is because we import the newsprint paper from countries such as Russia, South Korea, India and Norway (as Sri Lanka doesn’t manufacture newsprint in the large volume that is required), and the prices started to skyrocket as the global supply chain crumbled. There was also a short supply of the newsprint to begin with as well. Most of the European and American newspaper agencies started to go digital, and this shrunk the demand in the market for newsprint. The companies who once produced it also slowly shifted their main business to producing other materials like corrugated boards instead. So, these two factors drastically increased the price of newsprint.
The second factor we had to deal with was the environmental challenges we were facing as a result of the volume of paper we were utilising. To counteract this, we decided to start using recycled papers to produce newsprint. However, this process to reuse the used paper requires a lot of energy and that leads to increase in cost of producing newsprint.
Thirdly, we had to face issues with logistics as well. Previously, to ship a container from the UK to Sri Lanka costed only $1000, now, it is well over $10,000 because of all the port congestions caused by the pandemic. So, you can imagine the costs that have to be incurred when bringing down materials from Norway and China.
Finally, we also had to deal with the prevailing Forex issues in the country. It’s a very difficult process to get the containers with materials out of the ports with the dollar shortage in the country, and it has become an expensive endeavour as the value of the rupee keeps falling against the dollar.
These are the costs that have had an impact on the industry, yet it is a double-edged sword as we can’t just increase the prices exponentially to match the rise in expenses. Our costs might have gone up, but we can’t increase the cover price of the newspaper drastically because social media is providing free news and thus it is risky to increase the prices as our readers might be tempted to just stick to social media exclusively.
So, in order to soften any price hikes the customer may face, we decided to cut down some pages from the newspaper so we could offer it at a lower price point. We even had to shut down some of our other publications temporarily to reduce our expenses.
These are some of the strategies the industry had to implement to get through the pandemic whilst also balancing the customers' expectations as well.
4.) What sort of shift in consumer behaviour and consumer preferences have you seen as a result of the pandemic on the newspaper agency?
I would say that there was a forceful shift in consumer behaviour because of the nature of the pandemic, because when people don’t have a choice, they start looking for alternatives. Since printed newspapers became unavailable during the peak of the pandemic for most people, they started to look for digital platforms to get their news.
So, to cater to this shift we also started to allocate our resources to create more digital platforms for our customers to find information. So, in a sense it helped us adapt to the change in consumer behaviour as well because we used to be so dependent on news printing.
Going digital also helped us reach out to the Tamil community not just in Sri Lanka but globally as well. There are almost 60 million people residing in Tamil Nadu alone and millions of Tamils all around the world, so going digital for us really opened our horizons to an entirely new marketing opportunity.
The Future of Media
5.) How has the growth of online newspapers affected traditional newspaper agencies, and how are traditional news agencies evolving into the 21st century to stay competitive?
One of our major investments are in the purchasing of newspaper printing machines and related raw materials, and just one machine costs us around Rs. 400 million. So, a big problem which has arisen within the company is what to do with those machines as news moves more and more towards the digital sphere.
One option we have considered is to outsource these machines to the public who are interested in printing their own magazines/ newspapers. For now, we are only offering this service to other publications, but in the near future I think we will be able to offer this service to the general public as well.
We are also looking at strengthening our journalism, because in the end that is where the future of the industry lies. However, journalism has to adapt to the new technology which is emerging in our modern society, and that means shifting into different social media platforms and understanding how to adapt journalism into these new streams.
In today’s context, everybody is a journalist. Why? Because anyone can take out their mobile phones, take a picture/ video of something they saw and post it on social media, we call that citizen journalism. However, when we look at that post closely, we can see that there are a lot of finer details that are missing. For example, if someone is trying to inform people of an accident that occurred on the road, information about why there was an accident, where it occurred, who were involved in the accident etc., will be missing and only a journalist would know how to look for this finer details and subsequently provide a complete story regarding that particular incident. This is why we have to improve our quality of journalism and make sure that people get the full picture.
6.) How do newspaper agencies stay relevant in the eyes of younger generations and how are they attracting youth to read newspapers as opposed to just getting information out of their Instagram/ Twitter/ Facebook feeds?
So, what we have understood about the younger generation is that they love videos as opposed to reading. So, we decided to set up a studio to make engaging and useful video content to post on our social media accounts to keep our youth informed. Every day we publish around 10 to 15 videos surrounding a variety of different topics to make sure that they are well aware about what is happening around them.
However, what is unique about these videos is that they are not lengthy 20 / 30 minute videos, instead we keep the length of our videos to three minutes, and we try to pack key pieces of information within that timeframe for the youth to grasp quickly. Hardcore journalists find this method a little challenging as they are more used to typing pages and pages of information, and that is why, as I mentioned before, we need to strengthen our journalism and make it adaptable to modern day consumer behaviour.
We also have a newspaper which is tailor-made for the younger generation called Metro News. However, we need to be mindful about the different areas within Sri Lanka as well, because if we look at the demographic in Colombo, what we find is that it is extremely different from the rest of the country. What we found out was that the youth in Jaffna and upcountry still value reading and maintain the habit of reading the newspaper whilst that is not the case in Colombo. So we target the Metro Newspaper more towards the outskirts to keep their habit of reading alive.
7.) What does it mean to be a reader in the 21st century where there seems to be a limitless amount of fake information, how important is it moving forward (especially for the younger generation) to rely on professional journalism to clear the clutter and establish the facts?
As a newspaper company we are focused on providing the most accurate and trustworthy news possible. For example, when we consider the current Ukraine-Russia war, citizen journalism can sometimes be a problem because the videos and pictures that have been posted are unverified and thus can easily be false and intended to mislead people. So, news agencies have to come in and fact check these posts constantly to make sure what you are seeing is indeed the truth. So, one thing we always advice people to do is to refer to credible sources of information in order to not be misled and manipulated.
We always tell our journalists to find the correct source when presenting to our audience, so that people will know the truth.
Another thing that credible news agencies are careful with is not mixing opinion with facts when presenting the news. So, it is extremely important to be objective and present both sides of the story, and to not mislead people to believe in the side that you want them to.
8.) What is your advice for young journalists/ business professionals who are keen to enter the world of media, on how to best prepare for future developments in the industry?
People are always looking for information, and they are always searching for the truth, so there will be a thirst for news all the time regardless of the platform. We evolved from print into radio, television and now the web, and who knows what is next, but what will always stay the same is the need for journalism, because no matter how developed we become, no robot will be able to replace a good writer.
So, I advise the younger generation who are keen to get into the field to polish up their skills. There are three essential skills that I advise people to constantly improve on. The first skill is your writing skills, whether it is in English, Sinhala or Tamil, it is always good to polish your writing skills.
Second, you have to develop your presenting skills, because just like we did with our video segments on social media, you never know when you will need to present things to people. Learn to ask the right questions and improve your verbal communication skills.
Thirdly, make sure to study in depth about your subjects. For example, sometimes people attend press conferences, and they don’t ask any questions. This is because of two reasons:
The fear of public speaking
They don’t know the subject well enough
These two elements combined stop you from getting up and asking questions, because it instils an element of uncertainty and a lack of confidence.
There are multiple courses out there for you to learn and improve as well. So as a journalist it is important to study and continuously improve your abilities.
(Wish to have your company story featured on our blog ? Contact our Assistant Editor Rovindu Ambagolla at rovindu.tac@gmail.com)
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