The international financial crisis that started more than a year ago didn’t bypass Armenia. During 2009, the economy of the RoA registered a 15% drop in GDP. Naturally, the crisis also impacted on Armenian news outlets, especially the print media. But not all papers suffered as a result. Some were even positively affected by the crisis.

Hakob Avetikyan – The paper has suffered in terms of content

The Chief Editor of “Azg” daily laments the fact that for the first time a 19 year-old tradition at “Azg” has been violated in 2009, i.e. salaries have been regularly paid to employees on the first and sixteenth of every month. Now, the paper has been late in paying wages.

“In addition, prior to the crisis, average employee wages were increased some 10-15% each year. There were no wage increases in 2009,” Editor Avetikyan states and points out, however, that wages haven’t been cut despite the paper’s tight finances, nor have any of the 36 employees been dismissed.

In any event, some of the reporters at the paper were forced to find a second job in 2009. “I had no moral right to prohibit them, and naturally, this affected the content of the paper,” says Avetikyan. He says that investigative reportage and analytical pieces have suffered as a result. The only exception, Avetikyan notes, would be the issue of Armenian-Turkish relations. The paper has continued to provide in-depth analysis on this important topic.

“Given that reporters are tackling more than one story at a time, their hectic schedule hasn’t allowed the paper to cover all the ‘news fit to print’. Our mission has suffered as a result. In general, though, we’ve been satisfied with presenting the opinions of our side,” states Avetikyan, and points to the reasons for the ‘serious situation’ in which the paper finds itself. “First, our shareholders weren’t in a position to make the necessary investments. Secondly, at the beginning of the year, several large advertisers pulled out of the paper due to the crisis.”

Editor Avetikyan stated that in the past, some 70% of the paper’s revenues were derived from advertising and that due to the crisis this number dropped by 10%; a substantial amount for “Azg”. In addition, Avetikyan says that the number of special inserts published in the 8 page paper have dropped by 30-40% as well. Prior to the crisis, the paper was running inserts, ranging from 4-24 pages, for a variety of local and international institutions and government agencies publicizing various programs and projects. “Azg” has received no such orders for the past several months.

Editor Avetikyan continues, “You won’t find many commercial advertisements in Armenian newspapers; 95% is mostly notices and various announcements. In our situation, an important portion of these are notices of various international organizations, advertising tender bids, job vacancies and educational programs. Their number has definitely dropped. Previously, we ran 3-6 such notices every month.”

In addition, Avetikyan says that the number of special inserts published in the 8 page paper have dropped by 30-40% as well. Prior to the crisis, the paper was running inserts, ranging from 4-24 pages, for a variety of local and international institutions and government agencies publicizing various programs and projects. “Azg” has received no such orders for the past several months.

A full page ad in “Azg” costs 150,000 AMD; or 150 AMD per centimetre. The editor admits that these rates aren’t cut in stone and that oftentimes rates have been lowered for certain advertisers. Such rate flexibility, though, hasn’t translated into concrete benefits. Revenues from the sale of the paper are so minimal that operating costs can’t be covered. “I’ve done the numbers. Without ad revenues, we would have to sell 8,500 papers every day to stay in the black,” says the chief editor.

The paper’s print-run has fluctuated from 2,500-3,000 during the past few years. This number has periodically risen by 1,000 due to domestic political developments, most notably parliamentary and presidential elections.

Financial pressures have not affected “Azg’s” journalistic independence or the sharp critiques that the paper is known for. The editor notes that sales of the print edition have suffered due to the on-line version of the paper, since news gets posted on-line before the print edition evens hits the newsstands.

Hovhannes Galatchyan: “We’ve remained just as free and independent as before”

The Chief Editor of the paper “Iravunk” published three times per week, and the weekly “Hetaknnutyun Iravunk”, says that the publications under his helm haven’t been affected by the financial crisis in terms of content, thematic variety and editorial process.

“What the crisis has done is to impact on advertising revenue and circulation, to a degree. The bulk of our revenues come from ads and newsstand sales,” says Editor Galatchyan. He explained that in the past few years the circulation of “Iravunk” has hovered around 7,000-8,000 and 10,000-12,000 for “Hetaknnutyun Iravunk”. If there are elections in a given year, he said that circulation for both jumps by 20-30% on average.

Advertisers however have sought to cut expenses. Mr. Galatchyan says that 1/3 of the papers total revenues are derived from advertising but that adverts have dropped by 20% after the crisis hit.

“We haven’t cut ad rates. If there is a need to advertise, people will do so regardless of the cost. Advertisers also don’t make demands of us. It’s out of the question,” he said.

Mr. Galatchyan said that the number of paid inserts for both publications has also dropped. They use to publish 7-8 inserts per year in the past, each 2-8 pages long. Today, due to the crisis, no inserts are being published.

“Naturally, we haven’t made any changes to the staff, which remains at twenty, not counting freelancers. Nor have we cut salaries, but I can’t promise that we won’t in the future, said the editor, adding that noting could be ruled out for the future.

Armineh Ohanyan: “We have overcome the worst part of the crisis”

Armineh Ohanyan, Chief Editor of “Hraparak”, a daily that was launched in 2008 before the presidential elections, recounts that the paper went through six months of rough seas during its short existence.

“Our financial backer was making some pretty tough demands, so I simply cut off all contact with him. There was even the danger that we’d stop publishing the paper until we found new financial backing. And we have found this backing,” says Ohanyan.

The paper faced this crisis before the global one hit Armenia. Editor Ohanyan says that the latter really hasn’t essentially affected the paper’s operations. “The paper gets financing from several different sources – sales, advertising and sponsors. If all three are stable, then the paper won’t suffer,” she says, adding that they launched the daily with 1,000 copies and now the print-run has increased to 3,000. “There’s a bit more interest in the paper now since it’s really only the print media that covers stories of social interest. Citizens just can’t get such information from T.V.”

On the other hand, she points out that if the financial crisis has impacted the living standard of people, this automatically damages the situation of the papers. “Let’s say that we had a circulation of 4,000-5,000 instead of 3,000. In that case we wouldn’t be so dependent on advertising or sponsors.”

“Hraparak”, however isn’t all that dependent on advertisers since, according to the editor, only a tiny portion of the paper’s revenue comes from adverts. “The ad market in Armenia is quite small and is tightly controlled. Thus, for example, oligarchs are called to the presidential palace and told what papers to place ads in and for how long. This goes a long way to explain why a paper with a circulation of 1,000 is chock full of ads while another paper, with a much greater circulation, goes without ads,” says Editor Ohanyan.

It is for this very reason that the editor says the paper’s ad rates haven’t been cut to cope with the crisis. “First, the rates weren’t that expensive to begin with, and second, if someone doesn’t want to advertise with you it really doesn’t matter how cheap your prices are,” Editor Ohanyan says.

“It’s not by chance that we have been looking for an ad agency for the past year. It’s tough selling ad space. Today, every organization that needs to advertise thinks twice about what paper to advertise in. They are constantly grappling with the possible repercussions from the authorities or the State Revenue Committee if they make the wrong choice. Thus, advertisers shy away from “controversial” papers or those with a liberal bent,” says the “Hraparak” editor.

When first launched, “Hraparak” practically carried no advertising at all. Later on, a few advertisers jumped on board. Today, despite the crisis, the paper pulls in about 1 million AMD in ad revenue per month and prints 3-4 one page color advertising inserts. Nevertheless, the paper still operates in the red, without any profit. The shortfall is made up by the paper’s sponsor.

“Naturally, I am looking for outside sponsorship with any strings attached, or the least possible. But it’s a tough search. People give money and they expect something back in return; editorial influence,” says the editor. “Let’s put it this way. Out of ten prospective sponsors, I’d pick the one with whom I have a natural affinity; where the sponsor’s demands impinge the least on my views and ideas. Nevertheless, one still feels a certain restriction.”

The crisis at the paper really came into focus in a practical sense in the summer of 2009 when a handful of reporters jumped ship to work at another paper for more money.

“It was during this time that the dollar exchange rate changed and the prices of various commodities went up. We were in no position to raise salaries. We were paying our people the same salaries as one and a half years ago. Had we been able to raise their salaries, many wouldn’t have left,” says the editor.

Editor Ohanyan states that the paper is operating on a skeleton staff of 15; 10 reporters and 5-6 freelancers. “Previously, we’d put out a 12 page paper on Saturdays. We had to stop because the printing bills were just too much. Then we set our sights on having reporters in all the major urban centers in the regions wherever possible. We had to scrap this plan due to the costs involved. If there were no financial crisis to deal with our revenues would grow much quicker and, naturally, we could get this project up and running,” she says, adding that the paper has more reporters in the regions than ever before.

Hayk Gevorgyan: “Our paper isn’t only self-sustaining but it turns a profit”

Director Hayk Gevorgyan, the person in charge at “Haykakan Zhamanak”, says that he has nothing to hide when it comes to the finances of the Armenian daily with the largest circulation. “We have no ‘black safe’. All our revenues and expenses will be published in March of 2010 for all to see,” said Director Gevorgyan when asked if the crisis had affected the paper’s finances and thus, its editorial independence.

“The paper registered 19 million AMD in profits last year. This, despite the fact that the paper periodically upgraded its technical facilities and that wages were at normal levels and paid on time,” according to Gevorgyan. He added that the only effect the financial crisis has had on the paper’s editorial process is that economic developments have been covered within the framework of the crisis itself.

In terms of advertising, the paper actually never derived much revenue from running ads and so the financial crisis had little effect in that sense.

“Sadly, the issue of ad placement in the paper has become something of a political matter. There are numerous examples I can cite when advertisers are pressured into pulling ads they’ve already paid for. Given such conditions I feel that it is pointless to speak about an advertising ‘market’ in Armenia,” says Gevorgyan.

In 2006, the paper was printing 7,000 copies daily. This rose to 8,000 last year and remains at that level today. In 2008, due to domestic political developments, the presidential elections in particular, the print run rose to 10,000.

The number of employees at the paper and average wages also increased slightly. “Thus, profit levels will be less this year than last,” explains Gevorgyan.

To be continued