New Vision cover price up to sh1,500 effective July 1
Tuesday June 28, 2011
New Vision Newspaper will raise its cover price by a modest sh300, from the current sh1,200 to sh1,500 starting this Friday, July 1. The price adjustment is to allow the company fit in the current economic realities, especially the rising internal and external costs that have pushed the cost of newspaper production upwards.
“We have been forced into a situation where we need to increase the price of our papers, particularly, the English daily and Bukedde, the daily Luganda paper. This is because we are finding ourselves in an untenable situation where costs are increasing on a regular basis. We have been trying to absorb these costs as much as we can,” said Tony Glencross, the Vision Group chief commercial officer yesterday.
Glencross said besides the local price changes caused mainly by the declining value of the shilling (and inflation), international suppliers were also increasing their prices alongside escalating global commodity prices.
Buyers on the street will now pay sh1,500 for New Vision and sh1,000 for Bukedde, up from sh800.
Bukedde is also changing its look and will strengthen its content effective July 1. The cover price of Saturday Vision and Sunday Vision remains at sh1,500.
“But even at sh1,500, New Vision has a massive amount of value worth the cover price. We want to thank our readers for supporting this Ugandan company and we want to invite them to come along with us,” said Glencross.
Glencross explained that the price increase, the first since August 2008, means the paper can offset some of its costs and still continue to have top quality employees and products thus maintaining market leadership.
He said shareholders can still continue to expect value because of the diversity of the revenue sources.
“Ten years ago, we were totally dependent on New Vision for income, now we are sharing this load,” said Glencross.
Advertisers’ rates are increased every year and they were notified over three months ago.
“This (cover price change) should not affect advertisers,” said Glencross.
“Newspapers are about people, we need to retain the best people and journalists to do the best job.” A listed company on the Uganda Securities Exchange, Glencross said for shareholders to continue registering a return on their investments, costs and revenue streams are managed very prudently.
“There is still value for shareholders,” he said.
The rising costs, Glencross explained, have caused a little bit of strain on the costs and the margin over the last three years, which New Vision has been absorbing.
Glencross said models, like in Europe where newspapers are given free or at a hugely subsidised price and then they leverage on advertising, are not applicable here because the advertising revenue is still small and the costs have to be shared between the advertiser and the reader.
But with the country’s growing middle-class, Glencross says this is bound to improve.
“We have a strong and emerging middle class, as they become more sophisticated and selective, advertisers then start to target these people and this creates competition, it is a multiplier effect and we need to be stimulating the economy as much as possible,” said Glencross.
Much of newsprint is purchased from Asia and Europe and shipped through Somalia coastlines which are getting riskier because of deadly sea pirates.
Also reports indicate that freight costs have increased as shippers’ factor in piracy risk and port delay surcharges.
The production of newspapers also requires many other imported inputs, such as printing inks and pre-press consumables alongside the labour, energy and distribution costs, all of which have been rising.
By David Mugabe: The New Vision Newspaper