Robert Shaw is an Irish-American media development expert for the International Media Support, and an investigative journalist. He specialises in the safety of journalists and innovation. This post was originally published on his Medium account and an edited version is republished with permission. Read the full post here.
The global media industry needs a massive economic stimulus. From small digital savvy start-ups in tight-knit communities in South Africa and Pakistan to larger legacy media in urban centers in Colombia and Ukraine, the list is increasingly long. Still, there is a high chance that any stimulus will be ill-designed, counterproductive and hijacked by political interests.
"The risk of any stimulus offer is that those already-struggling media companies do not use this 'last chance saloon' call to substantially change their dying business models,” says CEO Styli Charalambous from South Africa’s Daily Maverick.
"Digital transformation and innovation have been sorely lacking in our industry and this could just be a case of kicking the can down the road. But in the context of so many less deserving outfits that have been bailed out, why not those that inform and provide a public service?"
As a qualified chartered accountant, now leading a pioneering media start-up, Charalambous is aware of the growing gap between traditional advertising and digital revenue and the constant need to make funds stay afloat. He is also aware that government funding of independent media is tricky, especially in a country like South Africa that has been traumatised by corruption in the last decade.
"A stimulus is needed here too," says Jakub Parusinski, head of marketing for the Ukrainian Hromadske TV, an internet television station founded in Kyiv in 2013. But he is quick to point out that its focus needs to be on organisation-led innovation rather than covering project budgets, where in two months they will be back to the same problem.
"What we have seen [in Ukraine] is this how covid-19 has stimulated innovation in the media," says Parusinski.
"A year ago, no major media outlets generated any reader revenue and now it’s pushing 50 per cent of the market."
In early 2020, Hromadske TV made massive internal organisational changes and rather than chasing stats for advertisers and public donors, it re-focused on deeper relations and engagement with audiences, carrying out root-and-branch change in their approach to marketing, analytics and user journeys.
The results have been quick. In April alone, a new "Friends of Hromadske" membership program brought a 45 per cent boost in supporters and - importantly - a 60 per cent increase in revenue.
For it to work, however, reader revenue needs to build on community interest in journalism, define clear targets and take a slow-burn phased approach.
"You start with this [collective community] and some simple benefits, like a newsletter, access or alerts, off the back of which further down the road you do ask for money," says Renée Kaplan, head of digital editorial development at the Financial Times.
"While the FT is a legacy media company that has been profitable to date, it has also been aggressively experiencing the dramatic drop in print advertising and circulation and having to compensate for it.
Staying afloat means thinking about diversified revenue streams from the get-go.Renée Kaplan, head of digital editorial development, Financial Times
"Given the digital transformations that media are experiencing in emerging markets, you need to go in with your eyes open about the reality of digital media economics and it’s quite simply that advertising is not a viable business model in a sustainable way," adds Kaplan, who has been the driving force in integrating data analytics and audience-first thinking into the FT’s digital storytelling.
"Staying afloat means thinking about diversified revenue streams from the get-go.
"Reader revenue is the big focus now and getting readers to support journalistic content,” she says. “In emerging markets, even though they’ve been used to paying for print products, it’s about finding ways to migrate that into a digital universe."
Still, a 'digital vaccine' will not be ready to go to market for another few years. Each media market will have to buy time to re-fill the gap left by advertising with a well-designed and diversified unique selling point. This needs to be done in tandem with innovative cost-benefit operational plans.
This is what Daily Maverick has been experimenting with in South Africa.
In one of Africa’s leading emerging markets, in 2018, Daily Maverick launched an original 'pay-what-you-want' model, where they set an ingenious but commercially risky goal to ask readers only for what they could afford so that their content remains free for everyone.
"The response was massive," says Francesca Beighton, general manager of membership, with the publication achieving 100 per cent newsroom growth and hitting the 10,000 mark in mid-March this year.
While the digital revenue numbers keep ticking upwards, the publication continues to push for new ways to build loyalty and income.
"When we created the membership model, we didn’t want it to become only about cash benefits, like become a member and get a free smoothie. The Uber deal was unique in that it helped us anchor our pricing but beyond that we didn’t want to make it just about deals and competing with other rewards programs.
"For us it’s about the cause and commitment to help our journalism. Through that we ended up with one member emailing a thousand others just to tell them about Maverick Insider."
Looking forward: distributed newsrooms
"Remote working, which was already on the rise before covid-19, will become more common," says Alan Soon, CEO of Splice Media, who sees the pressing need to create information and news faster and cheaper to deliver it into the hands of those who want or need it.
"As people emerge from months of working from home, there will be a continued acceptance of remote work as a way to add flexibility to the newsroom" he adds.
Plenty of startups start out distributed to avoid high rents and salaries. Many chose to stay that way.
"Media managers are starting to see the benefits of being able to hire and work with people from everywhere — you’ll be able to attract talent from other cities and towns, with people who are limited by physical disabilities," he says.
"Covid-19-related work-from-home is going to teach us that all of this is now possible; location and physical presence are now less of a factor."
A physical office means you can hire the best person you can afford in a 50-km radius, isolating media companies from much of the world’s talent, and increasing technological talent churn from quality editorial-driven media houses to social media platforms.
The combined effect of this mobility, as well as mass layoffs in countries like South Africa and Ukraine, has opened the door to a new gig economy.
According to International Media Support’s (IMS) resident advisor, Adnan Rehmat, the future belongs to the mobile freelancer.
"Our future needs to build itself around new generations and create a new market from a pool of 110 million young people," says Rehmat.
These freelancers are a growing force, working from home, managing their own YouTube channels with large followers and filing mobile stories for multiple traditional and digital media outlets.
"From the thousands who have been laid off in the past 24 months and pushed into the gig economy, we need to support them to help reshape a new digital media future," he concludes.
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