Strengthening the Financial Independence of Independent Media Organisations

"There is consensus in the literature that sustainability is a serious challenge for independent media..."

According to Freedom House, press freedom across the world declined to its lowest level in the last 12 years in 2015, and only 13% of the world population enjoys a free press. In the developing world, independent media organisations are generally dependent on grant income from donor organisations, which poses a risk for their sustainability. This K4D report reviews the literature on interventions and business models that can strengthen the financial independence or viability of independent media organisations, especially in developing countries.

Myers and Juma (2018) cite the following negative developments in arguing that it is imperative for donors to support independent media:

• Rising authoritarianism and a culture of animosity towards journalists;
• Capture of the media by wealthy individuals linked to political parties or politicians;
• Disinformation campaigns that use digital media; and
• The decline in trust in the media and democratic institutions.

To some extent, the gap in news (as newspapers disappear rapidly) is being filled by bloggers and citizen journalists, but they lack the resources needed for investigative journalism, which provides adequate scrutiny of those in power (Peters, 2010).

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

• Donors acknowledge that in some regions, the market does not provide adequate incentives for private media to become financially independent (Peters, 2010).
• Although a large percentage of funding is not specified, available data suggest that donors are supporting the full range of media support activities (e.g., training, organisational development, policies, and institutions) in a relatively balanced way. Financial support for newsroom production is the largest area of funding, while very little is spent on research and mixed approaches (Myers & Juma, 2018).
• While the United States (US) and Germany are the largest contributors of international media assistance, China is emerging as a large donor for media and communications infrastructure projects, although China is less interested in freedom of the media (Myers & Juma, 2018).
• Most aid agencies are not willing to provide long-term support that can incubate independent media until they become financially self-sufficient (World Association of Newspapers, 2011).
• 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 that provides low- or no-interest loans, leases, or equity to independent media, especially in developing and former Soviet bloc countries (Weiss, 2010). Examples of sustainable independent media that were initially financed by MDLF include: B29 (a student underground radio station in Belgrade that grew into an international media enterprise with radio and TV stations and a publishing house), The Mail & Guardian (an independent newspaper in South Africa), and Malaysiakini.com (a news website in Malaysia) (World Association of Newspapers, 2011).
• There are models for using guarantees to support independent media, such as the US Agency for International Development (USAID)'s Development Credit Authority, but adaptation is necessary, and the risks are not fully known (World Association of Newspapers, 2011).
• The JamLab accelerator in South Africa (Tshabalala, 2018), supported by the Open Society Foundation, is one of the few examples of accelerators (programmes supporting innovation in media).

The following challenges and limitations for donor support were mentioned in the literature:

• There are no coordination mechanisms at the country level that are capable of providing strategic or coherent support for independent media (Deane, 2016). Consequently, there may be duplication in some places (Kaplan, 2012).
• There is a shift towards country ownership, which gives governments more scope to determine their development priorities; these seldom include an independent media (Deane, 2016).
• Governments argue that dissent in the media is counter-productive, making it politically sensitive to support independent media in weak regimes and fragile states (Myers & Juma, 2018).
• Donors are not investing enough in the national and regional coalitions needed to sustain bottom-up, long-term strategies for ensuring vibrant and independent media (Deane, 2016).

A cross-cutting theme in the literature is that the traditional revenue model, which was based on generating income from advertising, is in serious decline in developing countries (Cook, 2016; Nelson & Susman-Pena, 2012). (The decline of the commercial media model predates the rise of the internet, since it began in the 1980s.) One reason is that businesses do not want to be associated with media that are critical of the government (IREX, 2018). Donations also have a poor record for raising revenue in developing countries (Cook, 2016).

There are, however, some positive findings with regard to business models for independent media models:

• Some independent media outlets in Latin America are utilising new business models such as memberships or subscriptions (Breiner, 2014).
• Websites The Quint and The Scroll are examples of successful independent media start-ups in India that earn revenue from advertising (Sen & Nielsen, 2016).
• There are a few examples of independent news websites in developing countries that 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 are growing in developing countries (Breiner, 2014; Ladeas, 2015).
• Crowdfunding has been used by a few media outlets in Europe and Latin America (Breiner, 2014; Živkovic, 2016).
• Not-for-profit media, such as The Wire and Khabar Laharyia in India, are growing in developing countries. However, limited case study evidence indicates that they have not yet found a sustainable business model (Sen & Nielsen, 2016).
• Several scholars and media analysts argue that the media is a public good that should be funded by the government, possibly through taxes levied on electronic devices or grants (Peters, 2010; Živkovic, 2016).

There is no reference to gender or disability in the literature on funding or business models for independent media.