Chocolate and Gold Coins

Tuesday, October 11, 2005

Reputation and Indian Newspapers

Yesterday, I wrote about how businesses invest in their reputations and how it was especially important in fields where the product is difficult to immediately evaluate. Newspapers have a particular problem with credibility. If they post sensational stories, they may immediately gain readers, but in the long run their credibility will be destroyed when these sensational stories are attacked. Likewise, if they fail to write about serious stories that are genuinely newsworthy because of a conflict of interest, their credibility will decline.

The IIPM vs. bloggers conflict that has erupted in the Indian blogosphere has put the print media in a curious conflict of interest situation. They want to print newsworthy stories but it turns out that IIPM is one of Indian newspapers’ biggest advertisers. So far, the so-called MSM has ignored this story. It could be that no one has researched the story far enough to see the newsworthy aspects of the story. It could be that investigative reporters are digging around at inside story of the IIPM and will publish their stories in the coming weeks (and I really suspect that there is a big story here to be uncovered). However, it might be that each newspaper is reluctant to upset its biggest advertiser.

This raises an interesting economic question: how much does it cost a newspaper to lose its biggest advertiser? To answer this question, they should ask Mr. Chaudhuri, dean of IIPM, to place his head into a basin of water, (any bowl will do, even a toilet bowl), and then quickly remove it from the water. If the image of his face remains in the bowl of water, the newspaper will sorely miss this ad revenue. If the water quickly rushes in to fill the void, then one would assume that likewise many other advertisers would rush in to fill the void caused by the absence of IIPM’s advertising.

This is an important point: there really is no conflict of interest here. No newspaper needs IIPM’s advertising. In the long run, there is no better way to guarantee advertising revenue than to produce a consistently credible newspaper that covers all of the news. Any credible newspaper knows this and purposefully keeps the advertising portion of their newspaper physically separate from the reporters so that there is no interaction between them and so there is no potential for a conflict of interest. In the long run, reputation sells papers, and selling papers brings in advertisers. And the only time the reporters should consider their advertisers is when they read them and wonder: “Who are these people and why are they spending so much on advertising – what is the story here?”

The links above for IIPM are to a new IIPM wikipedia entry. Read Ravikiran’s post about how you can help build this important wiki cite.

(technorati tag)


  • Michael ,

    Its me the lurker again ;))

    Unfortunately , its only the IIPMs and Amitys of the world that gets the newspapers their ad money. IITs and IIMs never feel the need to advertise.

    However , as in this case , the real reason the MSM has not taken note as yet is that its a relatively minor matter , and blogging in India still remains a highly elitist concern and still unheard of for many.

    Its the idiocy of the IIPM handlers that amuses me. If not for their crazy handling of the issue , sending that idiotic threat to young Gaurav Sabnis , nobody would even know and we certainly would't be talking about it.After all , how many people visited Gaurav's (rather decent) blog before the IIPM thing happened ?

    It really is a case of idiots digging their own grave. But taking some good people down with them in the process unfortunately. I feel sorry that young Gaurav had to give up his job , but never mind - I understand the kid has a degree from one of the IIMs , so he will be okay.

    I also feel sorry for the young IIPM students , and understand their extreme reaction to the whole issue, even their obscene attacks on to the lady editor of the JAM magazine. They are just the typical insecure middle class kids who were not good enough to get into the decent institutes but still are desperate to make something of their lives and make their parents happy.

    After all , only 3000 out of 300,000 applicants get into the IITs and only 1500 out of 200,000 get into the IIMs. What do the rest of the lot do ?

    Well , they could start their own small businesses like many do in the US , but in middle class India societal pressures dictate that everybody just has to get an easy 9-to-5 job. The self-employed are frowned at. Thats probably one reason why manufacturing in India never took off the way it did in far-east Asia.

    PS : If Gaurav Sabnis is reading this , I just want him to know I totally admire him for standing upto his principles , but if I was his brother , I would tell him "Wake up kid - Are you nuts !! Giving up a job in IBM for some stupid blog thing !!!" *SLAP* *SLAP* *SLAP*

    Anyway , the kid should be fine with his IIM degree.

    By Anonymous Anonymous, at 4:17 PM  

  • I agree Michael. It's about time that the newspapers got involved with this.

    By Blogger R., at 9:51 PM  

  • General Comment
    I've heard it through the grapevine that this issue is about to break into the Indian MSM big time today. Both print and television are picking it up.

    By Blogger Michael Higgins, at 3:59 AM  

  • Yes Michael. Good to hear that the Indian MSM is finally getting into the act.


    By Blogger Iyer the Great, at 7:30 AM  

  • Hi,
    I read Gaurav's blog, and Rashhmi's and read a lot of the comments there. Totally turns one off, I would say.
    People rad Gaurav's blog, but for most of us, would we even have remembered that he had written something about IIPM, until this whole thing about sending legal notices came up. Grow up, IIPM . If you want to protest, do so in a a civil manner.

    By Anonymous Anonymous, at 9:30 AM  

  • Hi Raj
    You gave me a lot to read. I agree that the lack of supply of good B-schools probably leads to this sort of scam schools. But this is why I don't understand why they don't try to invest more in their reputations. Being the legitamate number 20 B-school in India could still command a lot of decent student applications.

    Hi Handa: thanks

    R: I read a small piece from HT (I think). It is on Desipundit. There was another article on the Pioneer that was taken down but survives in a cached version.

    Rahul: Better late than never.

    Sridevi: Indeed, IIPM just looks like clowns. What were they thinking?

    By Blogger Michael Higgins, at 2:38 PM  

  • Looks like IIPM states that its infrastructure is cutting edge. According to IIPM, students learn the very latest in management techniques using the very best in equipment and teaching.

    By Anonymous, at 12:29 PM  

  • By Blogger dewatampan, at 6:50 PM  

  • By Blogger Soni shirts, at 11:20 AM  

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