By Chief K.Masimba Biriwasha
Improving the business management skills of media operators and developing proven revenue models that work in disparate environments need to take on greater urgency in emerging and developing markets, according to a new report titled, “Matching the Market and the Model: The Business of Independent News Media”. The report says that such skills are more critical particularly as the introduction and proliferation of digital, mobile, and social media reconfigure legacy business models and permanently alter the playing field.
“The exuberance, intellectual passion, and experimentation that are fueling enormous changes on the news side of media organizations need to be replicated on the business side,” reads the report.
The report adds that news media outlets in emerging and developing markets need to come up with new business models to cope with the changes in the media landscape. The report further states that in much of the world, independent media organizations are currently more constrained by economic factors than censorship.
Due to poor business acumen by media managers, news media are forced to turn to externals funders in the name of human rights and press freedom, which only serves to curtail their independence as well as foster accusations of serving foreign interests by governments.
“Poor management also furthers donor dependency, which has a direct negative impact on media sustainability. Few funders are interested, long-term, in supplying the operating budgets for media companies. Yet when media managers lack the business acumen to read their environment and develop effective strategies; when they fail to understand the dynamics of how audiences consume news and businesses invest in advertising; and when they lack the ability to innovate, seeking outside funding must seem easier than building a business,” states the report.
Many media owners have little knowledge of the field of marketing communications, or the businesses that use it, and thus their ability to understand and respond to their advertising customers’ needs is impaired.
According to the report, the only “right” business model is one that works within local market conditions, and any media development programme that seeks to provide meaningful support must be tailored to that reality. The report states that there is a need to identify new and hybrid methods of funding news media.
“No model is automatically better or worse than any other,” said Eric Newton, senior adviser to the president at the John S. and James L. Knight Foundation. “You need to match the model to the place … The only real mistake these days is not to try something new.”
According to a survey conducted by the World Association of Newspapers and News Publishers (WAN- IFRA) in conjunction with the Swedish International Development Cooperation Agency (Sida) in 2011, the economic climate and market conditions to be the major challenges to editorial independence and the business advancement of their media outlets.
Lack of basic skills in business management continues to pose major challenges to the viability of news media. According to the report, independent media in developing and emerging countries lack an understanding of the revenue side of news media businesses.
“In terms of revenue, media owners often don’t know how to find it, bill it, make it, keep it, or replace it. This is because many media owners have little knowledge of the field of marketing communications, or the businesses that use it, and thus their ability to understand and respond to their advertising customers’ needs is impaired,” stated the report.
One of the key problems is that founders of news media tend to be more focused on the journalistic mission as opposed to establishing financially sound businesses.
“When media operations lack adequate business skills or a sustainable path to long-term funding, their journalistic missions are undermined. Reporters aren’t compensated fairly, making them vulnerable to bribes and payment for stories. This can also results in inflexible models and out-of-date practices for creating, distributing, and monetizing journalism,” states the report.
Media management and online media consultant Ross Settles, quoted in the report, states that media managers in emerging markets love the content but lack rigor around audience development and aligning audiences and revenue sources.
The report proposes that to remain relevant, independent media need to become much closer partners with them during this period of transformational change.