Will the coronavirus kill journalism too?
Covid-19 will have major effects on the media industry in Africa and the rest of the world. We share some strategies for financial survival
The traditional business model for news organisations which is based on subscriptions and advertising has been changing for some time. And the present Covid-19 crisis may be exacerbating a problem that has been unfolding all along. This can be seen in numerous newsrooms in Africa and the rest of the world.
In survey of the financial conditions at media companies around the world, conducted by Splice Media, it found that about 40% of news organisations will be cutting jobs in the next 6 to 12 months. Many news organisations relay heavily on advertising and sponsored content, which as been severely affected by the virus. The survey found that the loss of revenue affects the ability for news organisations to fulfil their main fixed monthly costs which includes full-time and part-time staff as well as rent for office space, and as a result will affect operational cashflow. The Media Development Investment Funds has been telling its clients to expect a minimum 30% reduction in revenue, while many other organisations are forecasting as high as 60–70%.
In South Africa, the Mail and Guardian, the first news media title to have an online presence in Africa, has been open and transparent to the public and its audience regarding how the covid-19 pandemic and the lockdown has affected its existence and revenue. The publications editor, Khadija Patel, says at the beginning of March revenue and cashflow looked positive, but things quickly changed, becoming the stuff of nightmares. By mid-March, the publication had a dramatic increase in the amount of cancellations from advertisers, it had to cancel events which they typically use as a platform for their advertises and increasing new business. All this makes up for approximately a 20% decrease to their total revenues, placing a risk on salaries for staff at the end of April 2020.
Having failed to stay abreast with innovation, the virus may have just fast-tracked the inevitable demise of the Mail and Guardian’s print publication.
“Much of the limitation on digital innovation within my tenure has been owed to derelict digital infrastructure which we have only been able to overhaul in the last three months,” says Patel.
The publication has since received a great response following its public appeal and was able to raise some funding, but it does not solve or answer the long term question of sustainability.
Co-founder of Splice Media, Alan Soon says 2020 is an opportunity for news media to try new things. “This is the year people will find things that work and that don’t work,” he says.
Adjusting the sails for revenues
So how can publications like the Mail and Guardian and news organisation’s in Africa survive the catastrophic loss of income? Mohamed Nanabhay, deputy chief executive at the Media Development Investment Fund, says his organisation created a list of recommendations for businesses in the media industry that could help them survive.
“No one can predict what will happen in a month or six months time, so its very much thinking about how do we survive this and how do we get into survival mode, rather than thinking about the ambitions we had a month or so ago” says Nanabhay.
Recommendations for news media organisations should be:
- Cut costs immediately and conserve cash
Nanabhay says the longer news organisations take to conserve cash, the quicker they will burn the cash. “You need the cash to see yourself through this crisis,” he says. News organisations should keep in mind that everyone is in survival mode. It is important to build and manage cash reserves. There needs to be rigorous cash flow management.
- Adjust content strategy
News organisations need to prioritise context over being first. They should prepare for a dramatically heavier online use by audiences. “People are consuming more news and more journalism. They want to know what’s going on in the world. It’s a time of growth for people,” says Nanabhay.
- Find allies
Consider tapping into your network of experts, consider partnerships and create alliances with other organisations to cover critical deficiencies in the system. “We need to be creative in how we produce our work and how we get out there,” Nanabhay says. “Often working with partners and having alliances helps us get through this.”
- Think about their staff
Newsrooms should help staff pace themselves and not work too much. Taking time off is important. “Your team is not immune. Publishers and newsrooms need to think about their staff and their wellbeing; thinking about how they’re running their shifts in order to make sure they continue producing journalism and serving their audiences,” Nanabhay. says.
Nanabhay added that news media should focus on ways of raising additional revenue through making use of government funds that are being deployed and other pools of money that are being made available. News organisations should attempt to raise revenue directly from subscribers and its members.
Ross Settles, an adjunct professor focused on digital media and entrepreneurship at the Journalism and Media Studies Centre of Hong Kong University, says news organisations with digital publications should work and prioritise converting audiences registered on their platforms to paying subscribers; news media should consider how they price their paywalls, which may mean more frequent and specific communications or content for audiences.
Another solution that Settles suggests news organisations should be looking at is for sales teams to get cash as quickly as possible, because three months from now, no one will know what their revenue will be like. He says sales teams should chase invoices, especially from people or organisations that currently owe you money, or at least settle on deals to bring the cash in.
Solutions for non-profit media
Bridget Gallagher, a development consultant specialising in non-profit news media, journalism, and tech for civic engagement echoes Soon’s sentiments on pockets of opportunity for news organisations. Editors should think about what their audience need and also what donors need. This will help news organisation find their strategy going forward.
News media that rely on donor funding should interrogate their mission, content and strategise how they can use some of the best content they have. “This means relying on ‘prepare, presentation, and persistence,” she says.
She further added that the fundamentals haven’t changed. Fundraisers should be rigorous in learning about their donors and how they [news organisations] present their work. “The best insights you will get during covid-19 will be in cultivating your relationship with donors,” she says.
With the number of covid-19 cases on the rise in Africa, the end to the lockdowns implemented in many countries may not change in the short term. It is projected that the impact of the pandemic will be felt for up to 18 months. Journalism will not die but the business of journalism will have to evolve radically. Soon says we should expect a greater diversity in journalism as more people continue to work from home. News organisations will need to find new ways to adapt to the new normal.
Want to stay up to date with the latest journalism and media innovation news from the African continent? Subscribe to our newsletter.
