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Home»GSDRC Publications»Strengthening the Financial Independence of Independent Media Organisations

Strengthening the Financial Independence of Independent Media Organisations

Helpdesk Report
  • Zenobia Ismail
July 2018

Question

What approaches or interventions have been proposed or utilised to strengthen the financial independence or viability of independent media organisations, especially in developing countries?

Summary

This report is a review of the literature on interventions and business models which can help independent media organisations to become financially sustainable. The overall finding is that
independent media in developing countries are primarily reliant on grant funding. Some independent media organisations in Asia, Latin America and the Middle East are generating revenue from advertising, sponsorship or complementary activities such as consulting services, public relations and book sales. However, it is too early to determine if these revenue models are sustainable.

The literature on business models for media organisations is limited and Cook (2016) notes that it is a neglected area in academic scholarship on the media. The sparse grey literature and blogs on business models for independent media focus on developed countries, although some examples from low and middle-income countries are mentioned. The evidence is mainly based on case studies or qualitative research with independent media organisations. This literature review concentrates on interventions and business models which enhance the financial sustainability of independent media organisations in developing countries. However, some reference is made to funding trends in developed countries since media outlets across the world are affected by digitisation and social media.

The literature was obtained using keyword searches for independent media, media funding, media financing, media business models and media revenue models. Two peer reviewed articles
in academic journals, reports by media support organisations, policy reports and a few blog posts were used in this review. In addition, the literature recommended by independent experts was
incorporated.

A cross-cutting theme in the literature on business models for media in developed countries is that the traditional revenue model which was based on generating income from advertising is in
serious decline (Cook, 2016; Nelson & Susman-Pena, 2012). Several scholars and media analysts question the viability of the commercial media model and argue that the media is a public good which should be funded by the government, possibly through taxes levied on electronic devices or grants (Peters, 2010; Živković, 2016).

The narrow stream of research on financial models for independent media organisations in the developing world observes that it is more difficult for these organisations to survive using the
commercial model because of hostile economic and political conditions (Cook, 2016; Deane, 2016). The market for advertising is small, and businesses do not want to be associated with media which are critical of the government (IREX, 2018). However, there are a few case studies of independent media start-ups in India which are sustained by a combination of grant funding and advertising revenue as well as the use of native advertising and affiliate marketing (Sen & Nielsen, 2016). Likewise, some independent media outlets in Latin America are utilising new business models such as memberships or subscriptions (Breiner, 2014). However, commercial models can have perverse incentives when independent media collaborate with rather than critique the government (Cook, 2016; Deane, 2016).

The key findings of the literature review with regard to international donor assistance and private funding for independent media are as follows:

  • The United States and Germany are the largest contributors of international media assistance (Myers & Juma, 2018); China is emerging as a large donor for media and communications infrastructure projects although it is less interested in freedom of the media (Myers & Juma, 2018);
  • Most aid agencies are not willing to provide long term support which can incubate independent media until they become financially self-sufficient (World Association of Newspapers, 2011);
  • Donors acknowledge that in some regions the market does not provide adequate incentives for private media to become financially independent (Peters, 2010);
  • The majority of independent media start-ups in developing countries obtain most of their funding from grants from private foundations (Cook, 2016).
  • The Media Development Loan Fund (MDLF) is a revolving loan fund which provides low or no interest loans, leases or equity to independent media, especially in developing and former Soviet bloc countries (Weiss, 2010). B29, The Mail & Guardian and Malaysiakini.com are examples of sustainable independent media which were initially financed by MDLF (World Association of Newspapers, 2011);
  • There are models for using guarantees to support independent media such as USAID’s Development Credit Authority, but adaptation is necessary and the risks are not fully known (World Association of Newspapers, 2011), and
  • There are very few examples of accelerators. The Open Society Foundation sponsors the JamLab accelerator in South Africa (Tshabalala, 2018).

Sustainability is a serious threat to independent media in the developing world (Cook, 2016). Consumers of independent media in developing countries are generally reluctant to pay for access (Cook, 2016; Sen & Nielsen, 2016). The main findings with regard to business models for independent media models are:

  • The sales model of revenue generation is in peril across the world. There are a few examples of independent media outlets which generate revenue from memberships, subscriptions and sponsorships in Latin America and the Middle East (Breiner, 2014);
  • The advertising model is generally in decline and there is no consensus regarding the viability of this model for independent media in developing countries (Cook, 2016; Nelson & Susman-Pena, 2012; Sen & Nielsen, 2016);
  • The Quint and The Scroll are examples of successful independent media start-ups in India which earn revenue from advertising (Sen & Nielsen, 2016). In addition, there are a few examples of independent news websites in developing countries which earn revenue from native advertising, banner ads and affiliate marketing (Breiner, 2014);
  • Mixed revenue models or cross-subsidising of media businesses with complementary for-profit business activities is growing in developing countries (Breiner, 2014; Ladeas, 2015);
  • Crowdfunding has been used by a few media outlets in Europe and Latin America (Breiner, 2014; Živković, 2016);
  • Donations have a poor record for raising revenue in developing countries (Cook, 2016), and
  • Not for profit media are growing in developing countries, such as The Wire and Khabar Laharyia in India. However, limited case study evidence indicates that they have not yet found a sustainable business model (Sen & Nielsen, 2016). There is no reference to gender or disability in the literature on funding or business models for independent media.
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Enquirer:

  • DFID

Suggested citation

Ismail, Z. (2018). Strengthening the Financial Independence of Independent Media Organisations. K4D Helpdesk Report. Birmingham UK: University of Birmingham.

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