Paper reels, printing presses...and iPads

During my Nieman year at Harvard, I carefully kept my eye on the newspaper crisis. In the United States, ever since the middle of the last decade, journalists have been fired; the number of pages in print media has drastically dropped, reporters’ salaries have shrunk, and advertising has considerably diminished. All this, I observed, was fundamentally due to competition from the Internet. The public informs itself for free instead of paying for newspapers and magazines.

I returned to Bolivia in mid-2008 with the idea that the future of journalism (the present?) was based on the Internet and that printed media were destined to be a rarity that only the rich could afford. And what did I do a short time after arriving home? I helped to start up a traditional newspaper. With reels of paper, a printing press and everything else print media implies and even with a name rooted in traditional print media: Página Siete (Page Seven).

I know that this assessment seems self-contradictory, but it is not entirely irrational. First of all, I have twenty years of experience in print media, so it feels normal to carry on this way. Second, access to the Internet is low in Latin America and particularly in Bolivia, which means that the newspaper crisis is less imminent. Third, newspapers in Bolivia have always operated in an environment of economic restrictions, compared to their North American counterparts, so they operate more efficiently. Fourth, I genuinely believed the La Paz market had space for another newspaper because of the relative lack of credibility of the leading newspaper here, La Razón. Fifth and most important, because I was sure that this newspaper had to follow a short- and mid-range plan through which we could gradually leave print behind and lead ourselves into the digital world.

At that time, my obsession was the same as throughout my career—how to better inform the public. This means pointing out the nuances in the news, digging deeper into the significance of events, offering independent opinions, and providing the context for news. In other words, I have always wanted to present the news in a deeply pluralistic and independent manner.

I believed that a newspaper of this type was necessary in Bolivia. A landlocked country of ten million inhabitants in the heart of South America, Bolivia is experiencing a period of deep transformation. President Evo Morales, who is in his sixth year of office, has taken a series of measures in favor of indigenous sectors—which make up more than half of the population. This policy made him popular with that majority, but his aggressive rhetoric against the opposition and the business community has aggravated political polarization. His domestic outlook reflects itself abroad: he has expelled the U.S. ambassador and maintains a strong political and economic alliance with Venezuelan President Hugo Chávez.

The new polarization in Bolivia called for objective, independent observation of events.

We have more than managed to accomplish our goals on the editorial side of Página Siete. We have built up a staff of 30 reporters that manage to get daily scoops, as well as participate in long-term investigative projects. Every week, we publish an in-depth interview with a significant public figure. Many of Bolivia’s most important intellectuals write for the paper—ranging from strong Evo supporters to opposition figures to indigenous activists and even a radical lesbian feminist. Our goal is to cultivate the expression of different voices and open dialogue in a polarized society, all the while emphasizing robust reporting and verification of facts.

Our objectives were clear, as was the socio-political stage on which we were choosing to launch our newspaper. But first we needed to secure a business model that would sustain us economically.

Raúl Garáfulic, the president of the company, and I have always been in agreement about the editorial goals of our new project, but we debated a lot about the crisis in the print media. We recognized that our Internet version would have to be vigorous and versatile. We understood that we would need to use the new technologies right from the start of our project. Around that time, in mid-2009, the sales of the iPad began to take off around the world and major newspapers began to look at this novelty as a lifeline.

With all this in mind, we did not know exactly how we would create a newspaper business which could both reflect the Bolivian reality and  be viable and self-sustainable. The more we talked about iPads and new technologies, the more we seemed to lose the way to finance our operations. It is well-known that with very few exceptions, most media are operating at a loss on the Internet. Not even the New York Times, with 150 million yearly hits, manages to make a profit on the web. How could a modest newspaper in South America’s poorest country do so?

Then it occurred to Garáfulic that rather than thinking about how to finance an iPad application for the newspaper, we might look into financing and distributing the iPads themselves. We entered into long negotiations with Apple for the rights to become an official distributor of the tablets. At the same time, we pitched the idea to local banks. It would actually be the banks that sold the 3-G iPads (the most expensive version, with a cost of around $800 in the U.S., but that had excellent connectivity in the main Bolivian cities). The iPad could be paid off over a three-year period, and interested buyers could obtain a consumer loan. Almost half a million people in the country receive their pay through direct deposit; all of them would become eligible clients. Another interesting fact is that in Bolivia there are almost 200,000 smartphone users, that is, a perfect niche market for our idea. The offer would be the following: the consumer, through the bank, would pay $140 down and then subscribe to the iPad version of the newspaper for $35 monthly. That is, the reader would be subscribing to our newspaper for three years and receive a free iPad. Or, another way of looking at it, the reader would be buying an iPad with three-years’ credit… and receive a free subscription to our newspaper. The new subscriber, on turning on the iPad, has our newspaper as a homepage.

This initiative is based on the following criteria: first, in Bolivia, access to credit is relatively difficult; thus, enabling the reader to buy the iPad on credit is an interesting offer; second, the middle and upper classes—and particularly the lower-middle class— are greatly interested in gaining access to new technologies. Parents see the computer and Internet as a way to better the quality of education for their children and help their future careers at universities or the work world. In particular, the iPad, with its abundance of neat applications, is a device longed for by millions of people in the world and obviously also in Bolivia.

The idea is economically viable. It has tremendous potential, will exponentially increase the number of our readers, and will help to establish a different business model in an industry that has not changed much since the 18th century. Página Siete hopes to sell, progressively, up to 10,000 iPads yearly. That is to say, we hope shortly to be the newspaper with the greatest circulation in the country. We calculate, if everything goes well, that within three years, two thirds of our readers will follow us on new technology and the rest on paper.

The distribution of iPads began slowly in January 2011. At that time, Página Siete was almost a year old and had already become the second most important newspaper in La Paz, in terms of sales as well as influence. The Sunday circulation was about 10,000 copies, about a third of that of the leading newspaper.

I am confident that this model of distribution will make Página Siete the most read newspaper in the country and the most financially solid. I also believe that this model is an idea that other newspapers—here and abroad—can use.

In the meantime, whether on paper or iPad, many of the goals we had set out when we inaugurated the newspaper have been adequately fulfilled. We have managed to keep our editorial pages open to diverse viewpoints. Our news section hosts scoops, as well as interesting features and investigative reporting. Several of our stories and investigations have had important repercussions. We discovered, for example, that a Peruvian female prisoner had been held 60 days chained to the bed in her cell as punishment in a La Paz jail. The publication of this story forced prison authorities to come up with new rules for prisoner treatment, and the officers and authorities  responsible were fired. The Defensoría del Pueblo—a state human rights advocacy agency—drew up a plan for the defense of human rights in the prisons. This is what newspapers are for!

lea este artículo en español en el puercoespín
 

Raúl Peñaranda is a journalist who was a 2008 Nieman Fellow at Harvard. Editor-in-chief of Página Siete in Bolivia, he has worked as a correspondent for AP and ANSA. He founded the Bolivian weeklies Nueva Economía and La Época, both of which are still in existence. He was managing editor of Última Hora and editorial page editor of La Razón.
 

Raúl Peñaranda es periodista. Trabajó como corresponsal de las agencias AP y ANSA. En su carrera ha fundado los semanarios bolivianos Nueva Economía y La Epoca, ambos actualmente en circulación. Fue Jefe de Redacción de Última Hora y Editor de Opinión de La Razón. Obtuvo la beca Nieman de periodismo en Harvard.

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