Dear colleagues,

I am writing to draw your attention to a report prepared by the National Press Institute (NPI) on the effect of Russia's financial crisis on Russia's regional independent newspapers. The English-language report is available at http://www.nyu.edu/globalbeat/pubs/npi091698.html.

The survey, as we expected, demonstrated that the independent media sector was highly vulnerable to the financial shocks that have affected the entire Russian economy. Newspapers have been hit in a number of ways:

• Production costs, from newsprint to printing costs, have risen, in some regions dramatically;

• Russia's system of pre-paid 6-month subscriptions means that newspapers must pay these higher costs out of pre-devaluation revenues; in addition, 1999 subscription drives are already underway, with newspapers locked into now meaningless subscription prices;

• The lack of a functional banking system has further complicated payments for advertising;

• Most troubling, the advertising market has entered a steep decline - from 30 to 50 percent over the past few weeks - with many newspapers reporting that contracts signed for September and October have been cancelled.

As the enclosed report details, newspapers have responded in various ways, from laying off staff to cutting back the number of issues to canceling subscriptions to national news services. Newspapers have been desperately spending their cash on newsprint, which has therefore become even more expensive. Plans for capital improvements have been postponed or cancelled.

In short, Russia's independent newspapers - those still in operation - are in full crisis mode. At the moment, it is hard to predict with any degree of certainty how the crisis will play itself out in the newspaper industry, but clearly its long-term future is being decided now.

Sincerely,

Robert Manoff
Director
Center for War, Peace, and the News Media
New York University

Last updated: September 16, 1998

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