National Press Institute (Moscow) with
The Center for War, Peace and the News Media
November 1998

 A comprehensive sectoral program to assist the Russian press in surviving the current financial crisis and achieving long-term sustainability in support of democracy, economic transition, and international stability.  

Introduction  

The economic crisis that has gripped Russia since August 17, 1998, has struck independent regional newspapers with particular vengeance. These papers, a critical force for economic, social and political development, are now fighting for survival. Should appreciable numbers of independent newspapers lose this struggle, state-dominated media will once again prevail, thereby striking a powerful blow against the establishment of democratic politics, free markets, and a vibrant civil society. Such a development would further impede Russia's transformation into a stable, market-oriented, democratic society able to assume a full partnership role in the international community of nations.

On the eve of the crisis last summer, a number of Russia's 10,800 regional and local newspapers had made respectable progress toward achieving financial independence and professional competence, although enormous work remained to be done to guarantee the independent flow of reliable information and responsible opinion in a democratic Russia.   At the same time, the Russian government; through subsidies to state mouthpieces, through a tax system that stymied small business and local advertising, and through continued control of printing and distribution monopolies had demonstrated less than an unequivocal commitment to the idea of a free, independent press.

For their part, most Western donors, while acknowledging the importance of independent media in Russia's political and economic development, had devoted scant resources to media assistance. As a result of these factors, locally owned non-state newspapers were extraordinarily vulnerable when the present crisis struck.*  

This crisis now threatens to deprive most Russian citizens of access to independent print media for political, economic, and social information. The crisis has caused a collapse in the papers' advertising revenue from both national and local businesses and has also deeply cut into revenues from both subscription and newstand sales.

What is more, the dramatic declines in legitimate commercial revenues are leading to renewed reliance on state subsidies, company "sponsorship," and zakazukha (paid advertising represented as news). As a result, thousands of papers have been forced to dismiss or furlough staff, cut back on publication size and frequency, sharply curtail their news coverage, or cease publication altogether. Government publications, papers funded by extremist political parties, and other organs of official opinion or radical conviction are all too available to fill this void. The implications for the country and the international system are ominous, indeed.  

The Critical Importance of the Print Media  

Television is undoubtedly an important medium in Russia, but an assistance strategy that does not devote significant attention and resources to the print media is likely to fail to achieve its primary objectives. There are a number of reasons why the print media require particular attention during the present crisis period:

• Recent surveys have shown that most Russians get their local news primarily from newspapers. As the economic and political decentralization of Russia continues, local newspapers have become the locus of exchange of key economic, social, political, and other information necessary for the regional development on which Russia's future depends (inasmuch as 94 percent of the Russian population lives outside of Moscow). Although the circulation of Russia's central newspapers had declined prior to the crisis, circulation figures for local papers had in many cases begun to rise.
• Studies have repeatedly shown that Russians trust their local newspapers more than any other source of information, a finding with important implications for the process of developing genuinely democratic politics in the country.
• While Russians watch television to get the headlines or for breaking news, print media remain the only significant source of in-depth news and analysis for Russia's political, business, and intellectual elites. As noted by then Assistant Secretary of State for Democracy, Human Rights, and Labor John Shattuck: "[W]hile the print media lack the intimacy of television, they can stimulate debate because print is a medium especially well suited to convey context and meaning and to explore ranges of options. In the post-Cold War era it has been largely print articles that have set the agenda for serious policy discussion and fundamental changes in public thinking."
• Given the increasing control of Russian television by a handful of elites, only newspapers support the pluralism of views and diverse viewpoints that are essential for an informed and open policy process. Newspapers at both the national and local level present a far wider spectrum of views than does television and are essential to the development of a strong civil society.
• In Russia, as elsewhere, television media take their cue from print coverage. It is the print media that set the news agenda. In fact, local news broadcasting very often consists of an announcer reading selections from the local press.
• The quantity and quality of television news and public affairs programming will continue to decline as television is integrated into the market (as has been the case in every major democratic market economy). Already, according to Radio Free Europe/Radio Liberty, "most private television networks and radio stations focus on entertainment programming, not news."
• Print media are the foundation for the Internet. As new media technologies begin to make a major contribution to the information flow in Russia in the next century, it is precisely print-based media skills that will be required to develop "content" meaningful to the transition to a market-based democratic society.
• Finally, an authoritative American study has demonstrated that local newspapers are the essential medium for informing voters in local and regional elections and for analyzing the local angle of national politics. Because the upcoming elections in 2000 will shape Russia's future in a profound way, the burden on Russia's local newspapers is immense.

The Crisis as an Opportunity  

The characteristics enumerated above point to the fact that the print media have a unique role to play in the process of Russia's political and economic transformation. Yet it is important to recognize that Russia's pre-crisis media system was far from being adequate to the demands of democratic politics or a market-based economy and that any newspaper assistance strategy that is merely designed to return Russian media to the pre-crisis status quo ante would be misdirected and ultimately ineffectual. A number of industry characteristics account for the economic weakness and the professional inadequacy of pre-crisis regional newspapers:

• Regional newspapers had an abnormally small share of both national and local retail advertising markets.
• Regional newspapers continued to be printed on outmoded, state-owned printing presses and distributed by monopoly (often state-controlled) distribution companies.
• There were far too many regional newspapers in extremely restricted markets, making it impossible for many of them to gain financial independence. Of the approximately 10,800 titles registered in Russia's 89 regions, only half had circulations over 10,000.
• Media markets (in terms of reader trust and advertiser confidence) were grossly distorted by the presence of state-subsidized mouthpieces posing as local newspapers.
• Regional newspapers were managed by former journalists with an extremely limited understanding of the business side of publishing, especially the importance of aggressive marketing and outreach to both readers and advertisers.
• Governments continued to exert control over the media, largely through economic levers, especially at the regional level; currently approximately 85% of Russian newspapers receive some form of subsidy;
• Investment and capital resources were scarce, except for politically-motivated investments;
• The unstable and underdeveloped legal environment surrounding the media inhibited innovation, risk-taking, and sustainability;
• Information access remained restricted, despite freedom of information laws;
• Nonstate newspaper publishers rarely communicated with one another, and were unwilling to share information or work together to promote their common interests and improve the legal and regulatory environment in which they operated.
• Public confidence in the media was abysmally low because of poor journalistic professionalism and the widespread (and often correct) impression that journalists served political and financial interests rather than their readers.

  In light of such problems, the National Press Institute believes that the present crisis can provide a stimulus to building a regional media system that is more professional and independent than it has been in the recent past, if funding resources equal to the scale and importance of the media challenge should finally become available. For their part, Russian publishers and editors are now acutely aware of the need to rebuild their businesses by increasing revenue, cutting costs, and providing a better product, and are more eager than ever before to do what is necessary to finally establish their newspapers on the basis of sound business practices, aggressive marketing, and quality journalism that truly responds to the public interest.  

Statement of Principles for Media Assistance  

The present crisis in Russia, the National Press Institute believes, makes it necessary to reaffirm the essential principles regarding the nature and role of a free, responsible, and financially viable press in the development of the Russian economy and society. With this in mind, the National Press Institute will be promoting the following underlying media values and principles through all of its activities in response to the crisis:

• Empowerment: The National Press Institute recognizes that Russian journalists have a long and unfortunate history of dependence on outside forces for information, financing, support, and legitimation. Because of this history, NPI seeks to create and implement only programs that truly empower journalists and media managers, and that build their confidence that they can and must help themselves and one another.
• Independence: State subsidies, state ownership, and state interference with the press on the local or national level stymie the development of independent non-state newspapers. The prevalence of government newspapers undermines the public's confidence in the press as a whole, saps journalistic talent, and dilutes the newspaper industry's already weak advertising base. The only role for government in media is the creation of conditions that encourage true financial and political independence of the media.
• Financial Viability: In order to be editorially independent and responsible to their readers, newspapers must be financially viable. Efforts to assist the media should not include mechanical subsidies that merely shift dependence from one source to another and that undermine the progress made to date in improving journalistic ethics and responsibility. Media assistance efforts should continue to develop the market- and reader-oriented management skills necessary for the media's long-term survival.
• Responsibility: The National Press Institute believes that journalists must be both free and responsible. NPI seeks to raise ethical standards among journalists and strengthen mechanisms for self-regulation within the industry at the same time that it seeks to eliminate formal and informal government control mechanisms. NPI believes that journalists have a responsibility to cover ethnic, minority, social, political, and economic issues with sensitivity and sophistication.
• Professionalism: In order to play the key role that the media must in a democracy, the Russian media not only must become independent and financially viable, but must also raise their level of professionalism. NPI is committed to promoting, directly and indirectly, the highest levels of professionalism among the media with which it works. Professionalism entails the understanding of the media's role in society, high ethical standards, and mastery of the journalism skills and practices necessary to inform and involve Russian citizens on the full range of issues that now lie before them.

What Is the National Press Institute?  

These principles have guided NPI's work in Russia since it was established (as the Russian-American Press and Information Center) in 1992. The Recovery Program described in this document is the result of NPI's nationwide work since then to promote the professional practices and the economic and legal conditions necessary to support a dynamic media sector serving the needs of an informed citizenry and a vital public policy process. NPI is now a permanent, not-for-profit Russian NGO which promotes civil society and government accountability in Russia.

To these ends, NPI maintains a network of seven regional media assistance centers in Moscow, St. Petersburg, Nizhny Novgorod, Novosibirsk, Yekaterinburg, and, in the future, Samara and Vladivostok, and regional affiliates. NPI applies a unique sectoral strategy based on a comprehensive approach to the economic, political, professional, educational, and legal problems facing the media. Its effort to address these interrelated issues simultaneously and in concert entails a comprehensive set of programmatic activities, and it also ensures that NPI has the flexibility to respond to new developments throughout the media sector as they occur.

Drawing on funding from an array of private and public sources, NPI has created and implemented a network of media assistance programs which have made it, in the words of the Glasnost Defense Foundation's Oleg Panfilov, "the center of the free exchange of opinion in Russia."

In its first six and a half years, NPI organized over 2800 programs, consultancies, and events in 40 cities across Russia, with an aggregate attendance of over 130,000 journalists, media managers, and communications professionals. It has provided management training and consulting to thousands of newspapers throughout the country, leading directly in some cases to full financial independence from the local authorities.

Through training and provision of information it has helped thousands of journalists to improve their reporting on key issues. It has promoted inclusive and broad-based journalism that both promotes a diversity of viewpoints and encourages civil society. It has championed the cause of freedom of information in Russia. It has arranged lasting partnerships between Russian and American newspapers. In these and a host of other ways too numerous to summarize here, NPI has employed its sectoral strategy to promote the development of a stronger, more democratic, and sustainable independent media sector.

NPI has elaborated this Russian Newspaper Crisis Recovery Program based in large part on its six years of experience working directly with Russia's regional newspapers. During this period, among its other achievements, NPI:

• installed the only modern newspaper-controlled printing press in Russia;
• provided financial and development assistance to create Russia's most respected and reliable system of gathering corporate and shareholder information;
• created partnerships between local American and Russian newspapers that have exposed dozens of Russian newspaper managers to new realms of possibilities in their developing industry;
• directly helped hundreds of newspapers raise advertising revenue and improve management through on-site consulting at Russian newspapers, seminars and training programs, and the translation and distribution of Western manuals and textbooks;
• helped shape the legislative environment in which the Russian media work by initiating the creation of the Moscow Media Law and Policy Center, a major research and educational resource in the field of Russian media law;
• created dozens of programs related to Internet publishing and online journalism which have dramatically increased the availability of information to and from the far-flung regions of Russia;
• improved Russian media coverage of nuclear security issues by targeted outreach and consultation, by monthly bulletins, and regular briefings and conferences on nuclear issues;
• helped develop the power of the media to contribute to the prevention of conflict and the reduction of ethnonational tensions through a variety of reporting projects, publications, and training programs;
• helped to improve coverage of election campaigns through regional workshops, monitoring projects, and campaign coverage bulletins;
• created Russia's only organization dedicated to promoting access to government information and to educating journalists on exercising their legal rights to it; and
• hosted thousands of briefings and press conferences that have exposed journalists across Russia to a wealth of independent, non-state sources of information and publicized hundreds of citizens' initiatives and non-governmental organizations throughout the country.

 NPI's Newspaper Crisis Recovery Program

The National Press Institute believes that it is possible to resuscitate the non-state regional newspaper industry in the wake of the present crisis and lay the foundations for a stable, viable newspaper industry in Russia. In order to do so, it is necessary for non-state newspapers, with the guidance and assistance of Western media professionals, to work together in a concerted fashion to (1) increase revenues by increasing advertising market share and circulation, (2) decrease costs through more efficient management, (3) improve the legal and regulatory environment through lobbying and legal and tax reform, and (4) improve journalistic practices and standards and heighten their sense of public responsibility to the public.

With these goals in mind, the National Press Institute has developed its Newspaper Crisis Recovery Program, a comprehensive set of initiatives to revive and further develop the independent press. Each of the priority initiatives described below is being proposed as an addition to NPI's ongoing programs described above, many of which already address some of the management, revenue, and journalistic issues that are highlighted below. But the crisis has made it imperative to establish a new level of commitment to resolving such issues.

What is more, each of the 29 is designed to address the longer-term structural problems of the independent regional press, problems (as noted above) that were evident well before the crisis and that have been exacerbated since. Each of these initiatives also conforms to the principles (outlined above) that underlie all of NPI's work and which it believes should guide all future media assistance.

Moreover, it is important to note that these initiatives vary greatly in their complexity and cost and have been designed to be implemented with resources of varying magnitude. In fact, any one of them could be implemented successfully by itself. However, inasmuch as newspapers are facing a fundamentally sectoral crisis, it is NPI's belief that a comprehensive response on a sectoral scale will be required to successfully respond. The 29 initiatives are briefly described below.

It should be noted that given the dynamic nature of the crisis and NPI's continuing work to identify points of leverage in responding to it, this list is merely suggestive. The Newspaper Crisis Recovery Plan will evolve as the economic, journalistic, and political conditions in the country continue to unfold. It should also be noted that, as it has in the past, NPI is committed to drawing upon a broad array of expertise from a variety of media organizations in the United States, Europe, and elsewhere. Over the last years, the National Press Institute has cooperated with hundreds of media organizations, newspapers, NGO's, and governmental and multilateral institutions, and this Newspaper Crisis Recovery Program is predicated on mobilizing similar resources in the future.

A small sample of the organizations that NPI has worked with includes: the American Press Institute, the Newspaper Association of America, the National Newspaper Association, the Flint Journal, the San Jose Mercury News, Sister Cities International, the International Center for Journalists, Citizens' Democracy Corps, the World Association of Newspapers, the International Federation of Journalists, Internews, the European Institute for the Media, the Baltic Media Center, the European Journalism Center, the Union of Journalists of Russia, the All-Russian Union of Editors and Publishers, the All-Russian Union of Small and Medium-Size Businesses, Moscow State University, the Media Development Loan Fund, and the Glasnost Defense Foundation.

I. Revenue-Enhancement Projects

Although Russia's advertising market has collapsed since August, it must be helped to recover over the next few years. Otherwise, the survival of the independent press will simply not be possible. As advertising recovers, non-state newspapers must be in a position to gain a much larger share of national advertising than they had before the crisis and they must be ready to pursue local retail advertising far more aggressively than they ever have before. NPI offers the following projects to increase newspaper revenue:

A. National Advertising Representation

In Russia, up to 80 percent of all advertising budgets are spent in Moscow. This high degree of concentration makes it essential that local newspapers be actively and aggressively represented in Moscow and that they take every possible measure to make it easy and attractive for Moscow-based advertisers and agencies to place advertisements in regional papers. To date, this simply has not happened and, as a result, national advertising in regional newspapers has been minimal.

For the last several months, the National Press Institute has studied how the Newspaper Association of America works to increase national advertising in local newspapers in the United States. NPI believes that equivalent programs can be productively developed in response to Russian conditions. Because of the extremely high degree of centralization of the advertising market in Russia, in fact, such programs can be far more important in Russia than they are in Western countries. Accordingly, the National Press Institute will create a national advertising representation to work aggressively to increase the advertising market share of regional newspapers. Specifically, it will:

1 Train regional newspaper advertising staffs on working with national-level advertisers. This will involve creating an effective alliance between regional newspapers and the staff of the national representation. One of the major factors suppressing advertising revenue in the regions is that regional newspapers have never been effectively trained to market themselves to national advertisers and meet the advertisers' specific needs. While national advertising representations have been tried halfheartedly in the past, this key ingredient of training has been missing. NPI will make training the advertising departments of regional newspapers a major focus of the national advertising representation. Part of the training process will be the collection and dissemination of information on national advertisers' needs and strategies.

2 Establish standard advertising formats and cost-per-thousand ad rates to facilitate the purchase of bulk and national advertising in regional papers throughout the country. Measures taken to create standard formatting will go a long way to encourage a larger share of national advertising in regional newspapers.

3 Assist and train member newspapers in planning, promoting, and producing supplements and special editions with the goal of increasing national advertising. Special supplements, currently underutilized in Russia, can be a primary source of very targeted advertising revenue, especially if coordinated on a national level. A team of special advertising consultants will be sent to all members of the national representation to ensure that marketing documents as well as actual supplements and editions are produced. The advertising representation will also coordinate the work of member newspapers producing supplements on similar themes to enable them to share editorial materials and reduce costs.

4 Conduct research and produce materials that will demonstrate to advertisers the effectiveness of newspaper advertising compared to advertising in other media. The NPI advertising representation would act as the newspaper industry's advocate in the advertising and marketing communities and would work with local newspapers to address the concerns of advertisers and marketers (on issues such as the accurate reporting of circulations, for example). It would serve as a conduit of information exchange between regional newspapers and Moscow-based marketers.

5 Develop the concept of cooperative advertising in Russia. Cooperative advertising is a mechanism by which national advertisers share advertising costs with local retailers and distributors. The advent of cooperative advertising markedly increased the newspaper share of national advertising revenue in the West and can work as well in Russia if a national newspaper representation is created to coordinate and encourage the practice. The creation of a national advertising representation for regional newspapers is a considerable undertaking. Major program costs will include personnel in Moscow and the regions, equipment, travel, telecommunications, and production costs of marketing materials. Should this project be implemented, it has the potential to reform the industry and enable it to emerge from the present crisis stronger and more viable than before. The project is designed to open up a major new revenue stream for the industry, and, as the Russian advertising market recovers from the crisis, the NPI national advertising representation should become increasingly self-sustaining.

B. Public Service Announcement Placement

NPI has developed a project that will help newspapers during the current crisis period, while at the same time promoting values, behaviors, and information that is important to the economic and political transformation in the country, as well as for the immediate well-being of the Russian people.

6 NPI, in conjunction with sponsoring organizations, will buy regional newspaper advertising space and then use the space for public service announcements. As a result, newspapers will receive a small but steady flow of advertising revenue, while at the same time the Russian public will be presented with critical information on a range of issues, health, environment, education, nutrition, conflict resolution, political participation, tolerance, etc., that will either assist the public directly or promote the values of an open society. Such public service announcements can also help to promote, directly and indirectly, the work of Russia's struggling NGOs. Such announcements will also encourage the standardization of advertising formats (see No. 2 above) and will establish the concept of public service announcements in Russia for the future.

C. Local Advertising Sales

Despite the potential importance of national advertising as a revenue source for regional newspapers in Russia, it is certain that local retail and classified advertising will remain the most significant source of income, as it is for newspapers in other large countries. With local advertising, newspapers have considerable competitive advantages over other media in terms of cost, immediacy, and effectiveness. Historically, however, Russian newspapers have failed to acquire the local market share that they should have. As a result, in many cities local television stations have even captured a significant share of the classified advertising market, running text-only announcements across the bottom of the screen during entertainment programming. The present crisis has served in many cases as a wake-up call to regional newspaper publishers. The time is ripe for a concentrated effort to improve the sales and service capabilities of local newspaper advertising sales agents, and also to improve the efficiency of newspaper advertising departments.

With the goal of improving local advertising markets, NPI is undertaking or plans shortly to undertake, with appropriate funding, the following programs:

7 NPI will organize direct, in-depth training in local advertising sales. NPI will establish a considerable training program on the ground, bringing Western sales techniques and attitudes directly into newspaper advertising departments around Russia. Sales agents must be trained in the use of worksheets, in time management, in making sales calls, in advertising design, and in all other related skills.

8 NPI will publish manuals to give concrete guidance to newspapers in developing local advertising. As an immediate reaction to the present crisis, NPI has already undertaken the translation of The Great Ad Venture: How to Succeed in Newspaper Advertising Sales, a practical handbook for newspaper advertising sales agents published by the Newspaper Association of America and used widely in the West. This manual emphasizes the importance of understanding the client's needs, of selling solutions to the client's marketing problems, and of countering objections that inexperienced advertisers may have to the concept of newspaper advertising. It includes worksheets to enable advertising sales agents to assist clients in developing an annual advertising plan to match their budgets and projected sales. NPI is seeking to translate and publish a number of practical manuals on newspaper marketing, circulation control, and classified advertising from Western sources.

9 NPI will promote the development and distribution of specialized computer software. Advertising managers must be given the tools to effectively manage their agents. In 1997, the National Press Institute provided consulting to the independent newspaper Zvezda in Perm to create elementary computer software for managing advertising accounts. This software has been successfully used since then to keep track of payments for advertising, to track the work of sales agents and to effectively plan sales calls. Such software is used every day in every Western newspaper, but is rarely encountered in Russia. NPI is seeking to refine this software and provide it to as many independent newspapers as possible, together with the training necessary to use it effectively. Not only will this software greatly improve the efficiency of individual advertising departments, it will also enable media assistance organizations to more easily track developments and patterns in local retail advertising markets, to analyze developments throughout the industry, and to respond accordingly.

D. Printing Presses

The National Press Institute has argued for many years that the poor quality of newspaper printing in Russia (about 80 percent of all newspaper printing in Russia is still done with letterpress technology) is a major obstacle to attracting advertisers. What is more, the continuing state monopoly of newspaper printing is a powerful lever to apply economic and political pressure on independent newspapers. Among assistance providers working in Russia, the National Press Institute (with funding from USAID) has taken the lead in addressing this problem.

In 1997, NPI installed a modern newspaper printing press in Volgograd for a group of independent local newspapers. Since that time, this press has become a major revenue source for these newspapers and provides the only full-color newspaper printing in southern Russia. As a result of this project, the first of its kind in Russia, the National Press Institute has the capacity to manage such projects, handling the logistics on the ground, assessing the needs of the Russian partner and the suitability of the site.

In Volgograd, the National Press Institute and its partner, the American newspaper consulting firm Boles, Morgan and Canino, created a complete program of technical and management training that enabled the Russian partner to quickly and effectively take over management of this printing business. Improving the quality of newspaper printing in Russia is an expensive and complex proposition. However, the newspaper industry will never be able to achieve its revenue potential from either advertising or circulation, to control costs, or to ensure its independence without a major investment in printing technology.

10 In the current crisis, the direct purchase of printing presses is simply not a realistic option. However, NPI continues to promote other ways of getting printing presses into the hands of regional newspapers, specifically loans for the leasing or leasing-to-own of printing presses. For example, NPI is encouraging infrastructure-development funds such as that associated with the Sakhalin-2 oil field project to include independent newspaper printing as a crucial element of infrastructure that is being established under the project. NPI has also begun working with Rybinsk Poligrafmash, Russia's only domestic manufacturer of newspaper printing presses, to improve their products and make them more affordable for Russian newspapers. A printing press is not just a machine; it is a business in itself. NPI, therefore, in conjunction with its American and Volgograd partners, would like to create a domestic training facility to provide a full range of technical training on printing and pre-press production and, equally important, to train press managers in effective marketing and financial control of a small printing business.

II. Cost-Containment Projects

In addition to efforts to increase their revenue, regional newspapers must undertake organized measures to reduce and control costs across the board. In doing so, they can benefit enormously from Western management practices and from increased cooperation among themselves.

A. Information Exchange and Best Practices

Russian regional newspapers operate without full information about market conditions and opportunities, and they remain isolated from other newspapers facing identical circumstances. As a result, they do not optimize their choices, and they often improvise stopgap measures to address problems that others have already creatively solved.

11 NPI will organize the systematic collection and publication of best management practices among Russian regional newspapers so that editors and publishers can learn from each other's innovations. In the wake of the August crisis, independent newspaper managers undertook many anti-crisis measures, some effective and others not. NPI immediately began exchanging anecdotal information on management practices through its research into the crisis, through a crisis-related listserv that was created in October, and through its annual Newspaper Management Conference (held in Moscow, November 11-14, 1998). This work needs to be systematized and continued in a regular, organized fashion in order to have maximum impact. Therefore, NPI seeks to create a monthly newspaper management newsletter to serve as a vehicle for newspapers to share innovative solutions to management problems, as well for NPI to disseminate cost-containment procedures that it will develop on its own in cooperation with international media organizations. Such a publication should evolve into a practical, regular professional publication for newspaper managers. The present crisis is the perfect time to cultivate in Russian managers the habit of learning from one another and to promote greater professionalism among managers throughout the industry.

12 Isolated regional newspapers are often not aware of current market conditions and opportunities. NPI will continue to publicize important economic information to enable regional newspapers to take advantage of the best prevailing opportunities. For example, after the crisis NPI began to collect and publicize information on newsprint prices, a simple undertaking which is helping newspapers identify the cheapest sources of newsprint in a wildly erratic market. NPI believes that such price monitoring, by increasing the transparency of markets for the goods and services that newspapers consume in quantity, can promote market stability and, thereby, help reduce costs and facilitate planning and budgeting on the part of newspaper managers.

B. Crisis-Management Consulting

Russian regional newspaper managers can learn much from the experience of newspaper professionals in other countries that have experienced similar economic collapses. Such experience can transfer valuable practical lessons that Western or Russian managers would not be able to provide.

13 Together with the World Association of Newspapers, NPI seeks to considerably expand its use of consultants with experience working in similar economic conditions. Newspaper managers from Indonesia, the Philippines, Latin America, and other parts of the world have a wealth of directly and immediately relevant experience that can help Russian publishers emerge from the present crisis stronger and more confident than before. In addition to learning to cope with the present crisis, Russian managers can be exposed to management techniques from around the world that can serve them far into the future. After coordinating this "emergency first aid" in the form of on-site consultations for select newspapers and national and local workshops, NPI will disseminate broadly the most useful suggestions through its publications, consultancies, training programs, and Internet Media Service.

C. Improved Financial Management

Haphazard financial management has crippled the development of the commercial press in Russia for many years. In some respects, newspapers have suffered from the present crisis more than they might have because poor financial information hampered decision-making. Improving Russian newspaper management has been and continues to be a key priority, a fact that the crisis should not obscure. NPI's past work in this area has focused primarily on a combination of direct on-site consulting, publications, and training workshops throughout the country. It now plans to augment these activities with the following:

14 In order to help overcome the lack of financial management experience, NPI will develop and widely apply a CD-ROM-based newspaper management simulation. The simulation will make it possible for newspaper managers to undergo a five-year cycle of business decisions in a few days of intensive training. The American Press Institute has used such a management simulation very effectively for a number of years. The simulation would enable NPI to educate thousands of managers over a relatively short period of time at a low per-participant cost.

15 NPI's study of regional newspapers indicates that very few publishers receive even monthly cash-flow reports and startlingly few make effective use of available computers for financial management. For this reason, NPI will facilitate the development of financial-management software capable of generating quick and accurate cost and revenue reports for newspaper managers. This software, together with a package of training materials and a training program, could markedly improve managers' ability to evaluate and improve company performance.

16 At the same time, the widespread use of such a financial-management package, which could help to gather financial information in a standardized format, would enable NPI to monitor and report on industry averages for key costs such as newsprint, office supplies, labor, printing, etc. Such reports would themselves become another financial-management tool for Russian publishers, allowing them to compare their company performance with national standards.

D. Legal Consulting and Assistance

Russian newspaper managers are caught in an extremely perilous legal environment, partially regulated by business law and partially regulated by media law. Moreover, because of the isolation of regional newspapers from one another, there has been no accumulation of experience in legal affairs and no study of available precedents. This, of course, places commercial newspapers in very vulnerable circumstances as local authorities use the tax inspectorate or other agencies to apply pressure to keep them in line. Complex laws governing newspaper "founders," ownership, and control present major obstacles to newspapers wishing to assert or establish their independence. The lack of legal expertise also hampers newspapers in contractual negotiations and other settings.

17 Regional newspapers could clearly benefit enormously from a centralized, practically oriented commercial law service dedicated to assisting newspapers in availing themselves of the tax exemptions to which they are already entitled and, in general, in entering into commercial arrangements on the most advantageous terms.

18 State-founded newspapers that seek to become independent by breaking away from the state agencies that are associated with them present a unique legal category in Russia and absolutely nothing to date has been done to assist them. In many cases, the most responsible and progressive journalists in a given city have been denied the Western assistance that they need and deserve on the grounds that a state agency is listed among the founders of the publications for which they work and cannot be removed. NPI believes that competent legal assistance and pressure from commercial newspaper publishers across the country could help state-founded newspapers become legally independent and develop into mature community voices. Specifically, NPI could arrange subsidized or low-cost consulting with leading legal experts, including members of Russia's official Arbitration Chamber for Information Disputes who have worked with NPI in the past to preserve particular independent newspapers.

19 NPI will also arrange legal assistance for newspapers seeking to wholly or partially merge operations, which would benefit the industry as a whole. NPI can also assist groups of newspapers to create management and ownership structures for jointly owned printing and production equipment. NPI would base such agreements on the Joint Operating Agreements which have been undertaken among U.S. newspapers, although of course Russian legal, financial, and other conditions would clearly necessitate adaptations to the Russian environment.

E. Purchasing Cooperative On their own, scattered around the largest country on Earth and with relatively small purchasing power, Russian regional newspapers are often at the mercy of suppliers of newsprint and other goods and services. NPI will pursue two related ideas:

20 For several years, the National Press Institute has been studying the feasibility of creating a purchasing cooperative among independent regional newspapers. Such cooperatives have been very successful in helping non-chain newspapers in the United States bargain with newsprint and other vendors on the same terms as large newspaper groups. By pooling demand and making it possible for newspapers to bargain together, such cooperatives can secure significant reductions in the cost of newsprint, computer equipment, subscriptions to news services and the like. A purchasing cooperative could also bargain with Western manufacturers of popular computer software for a group license for all members at a significantly lowered cost (the National Press Institute has already approached the manufacturer of QuarkExpress, a leading newspaper-design software package, with such a request). The creation of a purchasing cooperative would be a landmark in the process of encouraging nonstate publishers to work together. This cooperative could also be used to provide direct assistance through subsidizing the purchase of necessary equipment and materials, if that were deemed necessary. Because participation in the cooperative would constitute a form of self-empowerment among publishers, this kind of assistance would be more productive than the direct grants that have sometimes been provided in the past.

21 Such a purchasing cooperative could also serve as an ideal vehicle for distributing loans for the purchase of newsprint. By taking advantage of bulk purchasing, borrowers could be certain that they were getting the best possible price and lenders could be assured that the loans were actually used for the purchase of newsprint.

III. Projects to Strengthen Democratic Politics, Civil Society, and an Open Policy Process

At this moment of economic, political, and, indeed, psychological crisis for Russia, it is even more critical than ever that the media be able to fulfill their function as the preeminent source of business and economic information for democratic politics, as the facilitator of an open policy process, as a reliable source of business information, as a watchdog against official corruption and mismanagement, as a promoter of civil society, and as a responsible force for tolerance. The crisis has clearly impaired the media's ability to fulfill these roles. For that reason, a crisis program must address these key journalistic and professional issues if it is going to address the country's most pressing economic and political challenges, as it must.

It must be stipulated that the weakness of Russian newspapers stems in part from the fact that readers, as a rule, have a low regard for their journalistic standards and integrity. Although falling circulations over the last ten years can be mostly attributed to Russia's economic troubles, newspapers have done surprisingly little to make themselves essential to their readers. As a result, they have been unable to attract sufficient advertising to secure financial viability. The National Press Institute believes that improving journalism standards and techniques is not only a matter of social responsibility but also one of financial survival.

The National Press Institute advocates the creation of practical journalism programs that are designed to strengthen Russian democracy while also serving to cement the bond between readers and their local newspapers. Such programs, in fact, have a been a staple of NPI's sectoral approach to media assistance since it was established early in this decade. However, NPI believes that Russia's underdeveloped civil society and the general passivity of the average Russian citizen continue to present a major obstacle to newspaper development (as well, of course, as to Russian democracy itself). Disengaged and unempowered citizens have no need for newspapers. For that reason, NPI has encouraged newspapers to cover and work with local citizens groups and NGOs and has served as a platform for well over 1,000 NGO press conferences and briefings.

In the context of the present crisis, it is absolutely critical that the journalistic capacity of the news media to play a constructive role in the political, economic, and social life of the country be restored and, indeed, dramatically enhanced. As elections approach, as nuclear and foreign policy challenges become more acute, and as the public threatens to lose patience with market economics and democratic politics, the challenges of informing the public and helping to shape the policy process have never been more formidable or significant. Initiatives to ensure and enhance coverage of specific issues will include the following:

22 Non-state local newspapers are the only serious defense against the rampant government and business corruption that is crippling Russia's social and economic transformation. Moreover, newspapers that have been most active in exposing local corruption in recent years have naturally faced the greatest political and economic hostility from local administrations. Unfortunately, however, much coverage of local corruption has been irresponsible and inflammatory. It has contributed to the undermining of public confidence in Russia's transition. NPI will develop, at its School of Media Management and Journalism, a major investigative journalism program, with a special focus on the complex reportorial, legal, ethical, and safety issues involved in reporting corruption.

23 Inaccurate, partisan, opaque election coverage threatens the integrity of the democratic system itself. Only thorough, accurate, balanced, and transparent coverage of election campaigns can ensure a result which reflects the interests of Russia's citizens. The scheduled 1999 parliamentary and 2000 presidential elections will be absolutely critical in determining Russia's future for years and even decades to come. Many media are already looking to these elections as a sure source of windfall income in return for favorable coverage, as has proved to be the case in previous elections. Such behavior by the media threatens to undermine these critical elections and to leave the media weak and compromised in the post-election environment. In order to promote professional and transparent campaign coverage, NPI will organize a targeted series of activities to provide training, support, and a number of incentives and disincentives. Specifically, it will organize regional training workshops, on the model of those NPI workshops that proved successful on a small scale in 1993, 1995, and 1996. It would establish prizes for accurate, informative, and balanced coverage. It would also publicize cases of paid political advertising under the guise of impartial journalism, in order to help establish a professional ethos militating against such behavior.

24 The lack of sustained and constructive public policy discussions about Russia's economic situation in the period before August of this year is in part a result of the media's inconsistent coverage of business and economic issues. Too often, speculation substitutes for fact and political intrigue substitutes for business reporting. Reporting on such issues is not just a way of informing the public, but it is, more important, itself a key element of a functioning economic system. Without a media sector capable of facilitating the free flow of information and a culture of transparency, it is impossible to develop a healthy economic system. For that reason, NPI will enhance its programs to train reporters covering business and economic development, at both the national and regional levels.

25 Public apathy and an alarming disconnect with the political system that purports to represent citizens' interests contribute both to the growth of corruption and also to the increasing willingness to tolerate authoritarian rule in Russia. The media are the one institution best placed to facilitate the re-involvement of Russian citizens in public and political life, which is a key element in the establishment of democratic processes. As in the U.S., where the Civic Journalism movement has created healthy controversy within the journalism profession, NPI would promote open debate among Russia's leading media figures on the role of the media in promoting citizen involvement. NPI would work with targeted newspapers to provide models of coverage that promote involvement and activism rather than apathy and frustration.

26 In order to help promote a legal environment conducive to media independence, NPI established the Freedom of Information Commission in 1995 as Russia's first project to promote free access to government-held information. Russia's tradition of official secrecy and government control of the media has inhibited the development of a freedom of information movement, but independent media will never be able to enforce government accountability and adequately inform Russia's population without freedom of information laws, mechanisms, institutions, and routines. NPI, separately and in conjunction with the now-independent FOI Commission, will organize a range of programs, from lobbying and monitoring projects to educational programs and publications, to promote the development and effective implementation of FOI norms. In conjunction with the other projects outlined here, such FOI work will strengthen the independence of Russia's media and enhance their ability to promote government accountability.

27 The media in Russia play a major role in shaping relations among Russia's diverse ethnic, religious, and national groups. Perhaps more than any other single institution, the media have the ability to help avoid the increased tensions that seem likely to accompany increasing economic hardship. NPI, which has been working with the media for several years on the problems of reporting enthnonational conflict, will continue to work in several key areas, particularly in the volatile Northern Caucasus and in Moscow among the mainstream media, where altered media behavior can have an impact. Specific projects will include joint reporting projects, editorials and programming, training workshops, and research and monitoring designed to focus journalists' attention on the importance of balanced and responsible coverage.

28 Helping the media survive the current crisis also means helping the media report in depth on the key causes and effects of the crisis. The financial crisis and political struggles have overshadowed the steepest peacetime decline in life expectancy in modern history. A crumbling healthcare system and lingering environmental problems and dangers are in large measure to blame. While Russia does not have the resources to address all of the issues which confront it, aggressive and thorough reporting of these problems can help focus scarce resources on the most threatening of them, such as the tuberculosis outbreak in Russia's penal system. NPI, through its School and its Center for Cyberjournalism, will offer a range of training opportunities and informational resources to help journalists tackle these complex and sensitive issues in an aggressive and responsible way.

29 As the crisis deepens, worldwide concern over the fate of Russia's nuclear arsenal and research facilities grows. Aggressive, accurate, and sophisticated Russian reporting on nuclear issues is critical both to an informed policy debate and to international understanding of prevailing conditions. NPI will continue its long-standing program of working with Russia's leading nuclear and security reporters to help them improve their coverage through a combination of informational assistance, individual consulting, and institutional support.

*****

The projects briefly outlined here constitute an attempt to sketch out a comprehensive sector-wide approach to helping newspapers work through the present crisis, work together to address the structural problems that crippled them even before the crisis, wean themselves from debilitating state subsidies, establish their independence, and at the same time ensure that the journalistic product is sufficiently informative, balanced, and sophisticated to meet the urgent needs of the struggling Russian democracy.

The initiatives previewed in this Newspaper Crisis Recovery Plan entail markedly different levels of financial and institutional commitment, and will produce markedly different results if they are implemented singly, or in concert, as part of a sectoral rescue package. They are presented here, however, in the interest of suggesting both how vast the undertaking must be if it is to have an impact, and also how even single, modest, targeted initiatives can achieve measurable and important results. This NPI plan will continue to evolve in response to economic and political conditions and the expressed desires of Russia's newspaper publishers and journalists. As it does so, the National Press Institute welcomes comments and suggestions from all those interested in the fate of the press in a democratic Russia.

© National Press Institute, 1998

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For more information:

in Russia:
Vladim Svetozarov
Director, National Press Institute
119870 Moscow
Zubovsky Bulvar, 22/39
RUSSIA
Phone: 7-095-245-3008
Fax: 7 (095) 246-7502
e-mail: npi@npi.ru

in the U.S.:
Conrad Hohenlohe
Associate Director for Eurasian Programs
Center for War, Peace, and the News Media
tel: 301-320-9039
fax: 301-320-9038
e-mail: hohenlohe@worldnet.att.net

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