James Breiner: Entrepreneurial Journalism

200 digital native media on three continents provide models for sustainability

Why write about “reasons for optimism” when so much is going wrong in our politics, economy, and environment? Optimism gives us confidence that we can make things better. As I like to say, it’s another day of opportunity.

SembraMedia gives us another reason to be optimistic. It has emerged as a global leader in building the future of journalism from the ground up. Its directory of more than 1,000 digital native media in Spanish forms the basis of a network of collaboration.

Its mission is to help independent digital media in Latin America develop sustainable business models. It provides them with business and technical training, market intelligence, networking opportunities, consulting, and financial support.

Sembra’s Inflection Point International study of 201 digital native media in Africa, Southeast Asia, and Latin America expanded our understanding of how to build sustainable media in different cultural and political settings (the study is also available in Spanish and Portuguese).

And while there is no single formula for achieving sustainability, there are some tactics and strategies that can be applied in almost any context. Those are the findings I would like to republish here. (Disclosure: I am treasurer of SembraMedia and participated in the editing of the study. The graphics and text are republished under Creative Commons 4.0 ShareAlike international license.)

The methodology: A team of 23 local researchers, led by regional managers, conducted interviews in the local languages in each country. The interviews lasted two to three hours and included 500 questions that covered journalistic content and impact, media freedom and journalist safety, revenue sources and expenses, team structure and experience, social media use, and technology and innovation.

As the researchers analyzed the media organizations in each tier separately, they found common challenges and opportunities. Although there is no single recipe for success, they did find trends across all 12 countries that provide insights into the most promising sources of revenue at each of these stages of growth. 

For example, regional and national media with relatively large audiences reported higher levels of advertising support. Smaller, local, and niche media earn larger portions of their revenue from sources that leverage the experience of their founders, such as consulting and training programs.

Most of the media in this study were started with less than $15,000 in initial investment, and their limited resources make building a sustainable business model challenging.

Teams with diverse skills earn more revenue

A common problem among the media studied is that their founders had little or no business experience. In all three regions, more than 75% of the media leaders had backgrounds in journalism. Of those, 43% were the only ones responsible for fundraising and business development.

Yet building a team with diverse experience and skills beyond journalism dramatically increased revenue. Most notably, digital native media organizations that have a paid sales or business development person on staff reported six times the revenue of those without a dedicated sales or business development person. 

• The median revenue of a venture with at least one paid staff member devoted to business development or sales was $132,455
• The median revenue of a venture without at least one paid staff member devoted to business development or sales was $21,000

Across the three regions, salaries for sales and business development positions ranged from $200 to $2,000 a month, with a global median of $733. This expense accounted for just over 16% of a newsroom’s paid sales and/or business development expenses, on average. 

Based on those data, hiring a full-time salesperson looks like a no-brainer, given the relatively low cost of labor in these markets and the outsized impact of a sales person on the revenue.

SembaMedia’s study also found that news organizations that paid someone to lead tech innovation reported three times more revenue than those that didn’t—even when there were no paid sales or business development staff on the team.

The study also found that 32% of all the founders of the 201 companies were women, although the numbers varied by region and were significantly lower in Africa. 

Impacts on society

The majority of the digital news organizations interviewed in Southeast Asia, Africa, and Latin America said their reporting had contributed to significant political and societal changes—including increased civic engagement, criminal investigations, and resignations of government officials.

Although most operate with relatively small budgets and small teams–the median number of full-time equivalents across all three regions was 14–they have an impact that punches above their weight. Many specialize in investigative and data journalism, and more than 50% have won national or international awards for their work.

More than 20% of media leaders in Latin America and Africa reported that their journalism had contributed to a government official resigning or being fired, but this figure was just 9% for organizations in Southeast Asia. 

More than 80% of the media leaders interviewed said their original reporting had been picked up or republished by national and international media. More than 25% said their journalism had earned them international awards, including the prestigious Gabo Award in Latin America, the Ortega y Gasset Prize in Spain, and the Pulitzer Prize in the US.

The top five coverage areas cited across all three regions were:

• Human rights
• Politics
• Gender/women’s issues
• Health
• Environment 

Some examples of impact

Ghana Business News said its work contributed to new legislation on e-waste and improvements to a school food project. 

In Nigeria, the International Centre for Investigative Reporting highlighted the way its reporting on withheld pension payments for retirees contributed to a partial resumption of these payments.  

HumAngle in Nigeria trained women displaced by Boko Haram in Borno on citizen journalism and provided them with smartphones to document practices in Internally Displaced Persons (IDPs) camps. Subsequently, they have been able to report on food diversions and food-for-sex scandals. HumAngle pays these citizen journalists stipends and publishes the stories in their names. Some of these citizen journalists have gone on to become accomplished reporters who now work for other media organizations.

New Naratif, a regional outlet with an office in Malaysia, said its work helped to bring in donations for students, after this story about the widening education gap facing young refugees and asylum seekers in the country.

In the Philippines, The POST said its reporting on students who sell explicit images of themselves online led government institutions to order an investigation on the matter, including the Office of the President and the Department of Justice.

Marco Zero Conteúdo in Brazil said its reporting had contributed to the release of a man who was unjustly imprisoned after being accused of drug trafficking. Their investigation found that his personal documents had been stolen from him and used by another man who escaped jail while being held on drug trafficking offences. 

Some harsh realities

The SembraMedia report also recognizes that most of these media startups are vulnerable to financial disruptions. Many of them are passion projects, as shown by their revenues: more than 60% in this study reported less than $50,000 in revenue in 2019, and 8% reported no revenue at all. Adding to the vulnerability is that they are overly dependent on grants, whose duration is unpredictable.

Across all three regions, half of the media organizations in this study said they were victims of digital attacks, and 40% said they had been threatened for their work. Many of the organizations said they were subjected to near-constant trolling and other types of online abuse and harassment—primarily via social media.

SembraMedia’s study concludes that these media organizations need many types of training beyond journalism and digital communication, and universities could help provide it. The study recommends expanding journalism curricula to include business, management, and tech skills for journalism entrepreneurs.

A grass-roots movement

Despite all the challenges, these startups make up part of a global grass-roots movement. This movement often escapes notice because it operates mainly at the local level and is widely dispersed around the world. Big institutions and big media don’t pay attention, often to their own detriment, since these small organizations are innovating in content, distribution, and format.

I have been writing about this grass-roots movement to transform journalism for the past decade and have been inspired by the founders and directors of these organizations. Their courage and their creativity give me confidence that they will fill the gaps in coverage left behind by legacy media, with their obsolete monopoly business models.

All these digital media entrepreneurs are a reason for optimism. They get into action every day, as though every day is another day of opportunity.

Related:

Reasons for optimism #1: Andrew Yang

Reasons for optimism #2: Edwy Plenel of Mediapart

Reasons for optimism #3: Journalists collaborating around the world

Reasons for optimism #4: José Luis Orihuela’s ‘Digital Cultures’

Coming soon:

Reasons for optimism #6: Jared Diamond, Jay Rosen, Larry Fink