http://www.internews.org/pubs/pdfs/CIMA_sustainability%20report%20(09-28-07).pdf
Toward Economic Sustainability
of the Media in Developing
Countries
Center for International Media AssistanceThe Center for International Media Assistance (CIMA), a project of the
National Endowment for Democracy, aims to strengthen the support, raise
the visibility, and improve the effectiveness of media assistance programs
by providing information, building networks, conducting research, and
highlighting the indispensable role independent media play in the creation
and development of sustainable democracies around the world.
An important aspect of CIMA’s work is to research ways to attract additional U.S.
private sector interest in and support for international media development.
CIMA convenes working groups, discussions, and panels on a variety of
topics in the field of media development and assistance. The center also
issues reports and recommendations based on working group discussions
and other investigations. These reports aim to provide policymakers, as
well as donors and practitioners, with ideas for bolstering the effectiveness
of media assistance.
Marguerite Sullivan
Director
Center for International Media Assistance
National Endowment for Democracy
1025 F Street, N.W., 8th Floor
Washington, D.C. 20004
Phone: (202) 378-9700
Fax: (202) 378-9407
Email: CIMA@ned.org
URL: http://www.ned.org/about/cima.htmlTable of Contents
Preface 3
Executive Summary 4
Background 6
The Challenges of Economic Sustainability 7
Strategies for Sustainability 10
Private Support for Media Development 19
Recommendations 24
Appendix: Working Group Participants 26 Center for International Media Assistance 3
CIMA Working Group Report: Economic Sustainability of the Media
On June 22, 2007, the Center for International Media Assistance (CIMA) at the
National Endowment for Democracy organized a working group to discuss key issues
related to the economic sustainability of media in developing countries, as well as
relevant strategies for donors and implementers. Perspectives for greater private
sector involvement in media development were also discussed.
CIMA is grateful for the valuable contributions of the working group participants.
We extend our particular thanks to Patrick Butler, Vice President of The Washington
Post Company, Craig LaMay, Assistant Professor at Northwestern University’s Medill
School of Journalism, and Gerald Hyman, Senior Adviser and President of Hills
Program on Governance at the Center for Strategic and International Studies, for their
skillful moderation of this important discussion. Thanks also go to veteran journalist
Ann McFeatters for helping to organize the discussion into a comprehensive report.
We would also like to acknowledge William Dunkerley, Elizabeth Fox, Peter Graves,
Elena Popovic, Bill Siemering, and Mark Whitehouse for insightful presentations that
framed the group’s discussion and fostered much debate.
We hope that this report will become an important reference for international media
assistance efforts.
Marguerite Sullivan
Director
Center for International Media Assistance
Preface4 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
The Center for International Media Assistance (CIMA) at the National Endowment
for Democracy aims to strengthen the
support, raise the visibility, and improve
the effectiveness of media assistance
programs by providing information, building
networks, conducting research, and highlighting the indispensable role independent
media play in the creation and development of sustainable democracies around the
world. An important aspect of CIMA’s work
is to research ways to create an environment
that will allow independent and free media
to be sustainable and to attract additional
U.S. private sector interest in international
media development.
On June 22, 2007, CIMA convened a
working group of experts on economic
sustainability of the media in developing
and less-developed countries. The oneday meeting brought together twenty-five
donors, implementers, academics, and other
media experts to explore common challenges and exchange lessons learned. Journalist
Ann McFeatters served as the rapporteur for
the meeting.
CIMA created the working group to
stimulate a candid dialogue about issues of
economic sustainability in media assistance
and the potential for wider private-sector
involvement in media development. The
working group’s ultimate goal was to form
recommendations for policymakers on how
to improve U.S. foreign assistance with
respect to economic sustainability of free
and independent media. Among the group’s
major findings were:
• Public Service and Consumer-centric
Media: Simple economic sustainability
does not automatically guarantee good
journalism. The media have a public
service mission: producing high-quality,
consumer-centric journalism.
• Situation-specific Programs: Media
sustainability is not always attainable,
but should be a major element of media
assistance. In some places, laws or the
marketplace may render sustainability impossible for independent media,
but even in those cases donors should
include capacity-building programs.
There is no one-size-fits-all solution for
sustainability—donors must tailor their
programs to adjust to specific economic
conditions.
• Business Skills: Donors and implementers should support training in
business skills. When equipped with
management and financial skills, media
owners can develop creative solutions
for making their outlets more sustainable
even in the least developed economies.
While business knowledge and skills
are essential to the sustainability of any
media enterprise, they are often overlooked in the promotion of independent
media. The business aspects of media
development should not be ignored.
• Media Beyond Democratization:
Many in the private sector view media
development as a politically sensitive
issue, because it has often been part of
democracy and governance programs.
Executive Summary Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
Media development practitioners should
broaden their appeal to donors and raise
awareness of how free and independent
media contribute to social and economic
development. Certain niches of media,
such as local or health news, hold promise
for future development in many countries.
The benefits of media development are
abundant and wide-ranging, and donors
should be more aware of the sector’s
potential to address their areas of interest.
• Increased Awareness: The growth in
private sector philanthropy over the past
ten years is expected to continue in the
future and represents the best opportunity
for media development organizations to
expand their resource base. Education
and advocacy will be required to inform
Americans of the powerful and positive
impact that independent media can have
in developing countries. Donors should
also understand that media development is a long-term project that requires
sustained support; donors should not
expect a program to become completely
sustainable in an unreasonable period of
time.6 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
Background
Free and independent media are necessary
for the effective functioning of democratic
societies. Democratic governance depends
on the ability of citizens to make informed
decisions, which requires the dissemination
of accurate information through free
and independent
media. Media
not only facilitate
communication, but
also expose corruption
and hold public
officials accountable.
Media are crucial
for economic
growth, because
they are responsible
for providing information, aiding
communication, and promoting transparency.
Media cannot perform these functions,
however, when journalists are unable to
exercise their rights or the regulatory
environment in which they operate
discourages independence and plurality.
Media development assistance comes in
many forms, including training for reporters, editors, and publishers; grants and loans
to media outlets; support for journalism
networks and associations; conferences,
workshops, and exchange programs; and
collaboration with centers for
education and practical training
of journalists. The most popular media assistance activity
among U.S. donors and implementers is journalism training.
Many in the field, however,
argue that while fostering good
journalistic practices is important, more consideration should
be given to the state of the media sector itself. When media enterprises are
self-sustaining—financially liberated from
corruptive practices, government influence,
or dependence on foreign nongovernmental
organizations (NGOs)—they are more likely
to assert and maintain editorial freedom and
independence.
Many in the field, however,
argue that while fostering
good journalistic practices
is important, more
consideration should be
given to the state of the
media sector itself. Center for International Media Assistance 7
CIMA Working Group Report: Economic Sustainability of the Media
Presenter: William Dunkerley,
William Dunkerley Publishing Consultants
In the first presentation, William Dunkerley,
a veteran publisher and editor, argued that
sustainability in and of itself should not
be the singular goal of media assistance.
Instead, he maintained, creating consumercentric news offerings is paramount
in serving democratic objectives. In a
consumer-driven business model, advertising becomes a key part
of the media. As media
outlets build up their
consumer base, they
bolster their effectiveness
as advertising vehicles.
That, in turn, yields
increased advertising
revenues with which to
support consumer-centric
news. In this model, media
audiences and advertisers
alike benefit when media companies operate
with credibility and integrity. This model
cannot, however, be applied everywhere,
Dunkerley cautioned. In some places, the
economy may be so weak that the local businesses have no incentive to advertise. In
other circumstances, both media and tax
laws of a country present obstacles to sustainable media. In such situations, media
assistance must take on forms other than
direct support of media outlets—the media
environment itself must be encouraged to
change. In countries that do not have a
functional economy, not even an emerging
one, Dunkerley suggested that assistance
efforts focus on supporting objectivity and
pluralism in journalism.
Following his presentation, participants
discussed the meaning of economic sustainability. Northwestern University journalism professor Craig LaMay’s definition of
sustainability as “financial sustainability
with a public-service editorial mission”
was
included in papers distributed to participants
before the meeting. LaMay described news
media as having qualities of both a “mission
good” and a “revenue good.”
2
Media
managers are faced with two, sometimes
competing, objectives: providing information as a public service
and operating a sustainable business. LaMay
wrote that for a number
of reasons, “quality news
is less attractive to large
audiences, is much more
costly to produce than
sex, scandal, and trivia,
and brings lower returns.
If your first duty is to
shareholders, editorial
quality is going to suffer.” LaMay also
pointed out that media sustainability is not a
struggle limited to less-developed countries
or emerging democracies: “Quality public
affairs media everywhere find it difficult to
support themselves financially, and there
is no easy way around these economic
problems.”
Craig LaMay, Exporting Press Freedom: Economic and Editorial Dilemmas in International Media Assistance (Transaction
Publishers: New Brunswick, NJ, 2007), p. 27.
Craig LaMay, “The Dismal Economics of News and Public
Affairs” (background paper, Working Group Meeting on the
Economic Sustainability of the Media, Center for International
Media Assistance, National Endowment for Democracy, June 22,
2007).
See note 2 above
Media managers are
faced with two, sometimes
competing, objectives:
providing information
as a public service and
operating a sustainable
business.
The Challenges of Economic Sustainability Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
Although the working group members
agreed that sustainability meant more than
financial viability, they found it difficult
to pinpoint what it requires beyond profitability. The group was asked to consider
the following questions: When we set an
objective of sustainability, are we assuming
media with news content? What degree of
editorial independence do we expect? If a
media outlet is not profitable, but is part of a
conglomeration that is, do we still consider
it sustainable? One implementer posed a hypothetical case: “Supposing I am an operator
in an independent market, and I want to
start a radio station, the largest amount of
my programming will be devoted to sports,
music, and things of interest to my listeners.
That creates the foundation of market independence. But then we get to the question of
social mission. Where does that fit in?”
“We’re talking about sustainable journalism,
not sustainable media,” observed one participant. It is not enough
to build independent,
self-sustaining media;
most involved in media
development have in
mind serious, objective
journalism, the participant said.
Referencing Dunkerley’s overview of the
traditional business model for media, a participant cautioned that, in theory, a “good
product leads to audience, which leads to
new products. But this cycle does not work
very well in every market.” That circle of
revenue can easily fail, especially in developing economies where companies have
limited advertising budgets. For example,
if a newspaper’s readership is too small,
companies may seek to use other media
venues, such as billboards, which are seen
by many people, thereby reducing the
revenue received by the newspaper and,
perhaps, causing the paper’s collapse.
Is Sustainability Always Possible?
One participant cautioned against creating
unrealistic expectations for local radio
stations in less-developed countries. “We
do expect people in the developing world
to do things we can’t do ourselves. In this
country, public broadcasting couldn’t do
it without federal money. We should appreciate how inventive local stations are in
raising money.”
Participants gave a number of examples of
situations in which sustainability was not a
reasonable goal. Dunkerley described a visit
to a town in the Ural Mountains about seven
years ago. It was a place where, he noted,
the creation of economically sustainable
media was not possible. A major local industrial business supported the community’s
only newspaper in return
for favorable coverage,
he said. Advertising
from a multiplicity of
companies could have
given the paper a chance
at greater independence. A weak local
economy, however, coupled with national
tax and advertising regulations that discouraged advertising, made profitability and
independence quite elusive. It was not until
mid-2002 that those regulations were finally
repealed, he added.
In such situations, Dunkerley said, donors
should watch for opportunities for creating
sustainable media. As an economy grows
and business competition mounts, advertising becomes more important and media have
better odds for becoming self-supporting.
Participants noted that teaching media to
Teaching media to find a
strategy for sustainability is
tricky but rarely impossible. Center for International Media Assistance 9
CIMA Working Group Report: Economic Sustainability of the Media
find a strategy for sustainability is tricky but
rarely impossible. One implementer joked,
“It’s not so much teaching a pig to fly as
teaching the pig to run faster.”
Balancing Revenue and Mission
The participants agreed that the unfortunate
truth about the media business is that newsgathering costs more
than most consumers
are willing to pay—or
perhaps even more than
most are capable of
paying. One veteran of
the news industry told
the group that the cost
of producing news was
about ten times what
the consumer paid.
Only with advertising
revenue, accompanied
by paid subscriptions
or wide circulation, does news become affordable to the masses. A former journalist
observed that “the only guarantee of a free
press is profitability.”
In some countries, however, the tradition
of editorial independence—the separation
between the advertising department and the
newsroom—is weak, even when the press
is profitable. Independence can be difficult
to assert, particularly in places where media
struggle to shake the influence of bribery and
corruption. Journalists are often not insulated
from advertisers’ interests.
“Your owner is important,”
said one entrepreneur, who
also noted that without
careful restraint, the same
reliable revenue that
makes media editoriallyfree may morph into a
hunger to drive up profits
by replacing serious news
with pop music, celebrity
gossip, or soap operas.
One funder described a
recent meeting with a beneficiary in Bangladesh, who complained that:
“We in Bangladesh have advertisers who start
dictating our editorial policy. I’d like to be
able to say ‘no’ to advertising.”
The cost of producing
news was about ten times
what the consumer paid.
Only with advertising
revenue, accompanied
by paid subscriptions or
wide circulation, does news
become affordable to the
masses. 10 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
Strategies for Sustainability
Media Assistance for Less-Developed
Countries
Presenters: Bill Siemering,
Developing Radio Partners
Elizabeth Fox,
USAID
Mark Whitehouse,
IREX
Moderator: Patrick Butler,
The Washington Post Company
Media Assistance for Developing
Countries
Presenter: Elena Popovic,
Media Development Loan Fund
Moderator: Craig LaMay,
Northwestern University
To help focus the discussion, participants
were asked to consider the economic sustainability of media in two different environments: less-developed countries and developing countries. The distinction was made on
the premise that in less-developed countries,
where the economic and financial institutions
necessary for the media’s sustainability are
weak or lacking, media development practitioners may need to use different strategies
from those used in developing countries,
where markets are more sophisticated and
more conducive to sustainability. Media
development focuses on building the skills
of journalists and supporting media outlets
themselves, rather than merely supporting particular programming or coverage of
certain issues.
During the course of the discussion, however,
nearly all of the participants questioned
whether making a distinction between lessdeveloped and developing economies was
a useful media development strategy. One
participant who had worked in East Asia said
the most salient difference that she observed
in media assistance was not between lessdeveloped and developing economies, but
between emerging democracies and closed
regimes. Each political system has its own
particular attitude toward the media. “One
of the difficult things is that if you’re dealing
with a country that has gone through some
sort of democratization, the role of news is
viewed in a certain way. But in China and
Vietnam, news content is subject to controls.
The closer you get to the government, the
tighter the controls. The way you [media assistance implementers] operate in them is
different” than in emerging democracies.
Sustainable Media in Unstable
Markets
After regional experts described media development in less-developed areas of Latin
America, sub-Saharan Africa, and the
Middle East, participants posed the following
questions to the working group: What can
we reasonably expect to do under the conditions we have described here? Can media
companies achieve profitability and do that
through legitimate media activities?
In some countries, economic, political, or
legal conditions render full sustainability an
unrealistic goal, some participants argued.
When creating advertising markets and
self-sustaining media proves prohibitively
difficult, assistance implementers might Center for International Media Assistance 11
CIMA Working Group Report: Economic Sustainability of the Media
need to organize other types of projects. “I
think there is a hierarchy that needs to be
considered,” observed one participant. “In
terms of talking about an independent and
consumer-centric media, is the government
going to permit it? If the government is not
going to permit free media, you’re left with
some variant of the Radio Marti approach
[of U.S. government-funded broadcasts into
Cuba]. Second, is there a set of laws that
will enable it: media law, tax law, advertising law? Is there a legal structure that will
support it? That’s more important than
training and other forms of assistance. If you
don’t address them, you’ll be stumbling over
the other forms of assistance.”
At the same time, identifying the mission in a
given region is essential
for donor countries,
insisted one participant.
Donors should “question
whether there’s good
reason to teach them how
to become self-sustainable.” In some cases,
sustainability might
not be the paramount concern. “If you are
going into a country with a health-education
message or a political message, you are
better off not trying to pretend you are going
in to provide media sustainability,” she
observed.
Participants agreed that regardless of
economic conditions and whether sustainability was a realistic short-term goal,
imparting fundamental skills for better
journalism and economic sustainability was
important. “I haven’t seen a market where it
won’t work. Very smart design can do both
communications for development and media
development,” said one participant.
Distortion of the Media Market
Participants said that well-meaning assistance efforts often had the unintended effect
of distorting the media market, ultimately
harming prospects for media sustainability.
NGO-run radio, full of programming paid
by charity groups, can be an effective way to
deliver messages about health or education,
but it can also create dependency on NGOs
for funding, instead of encouraging station
owners to identify locally-based sources of
revenue.
Using Latin America as an example, one
expert of that region warned against distorting fragile developing markets. Communication-for-development programs have created
vibrant media outlets
throughout that region, she
said, but a large influx of
donor money to fund information campaigns could
potentially overwhelm the
advertising market.
To be safe, one participant advised: “Stay out of
those areas where there
already exists commercial media. Go into
areas where there isn’t commercial media,
and where there’s higher risk. Anticipate
what the market will do.” Others echoed that
sentiment, encouraging donors to be risk
takers: “Keep in mind that you can teach a
lot of the elements of economic sustainability. . . . It’s important for any media outlet
anywhere—taking a risk. The risk that has
to be taken first is the donor’s. . . The donor
takes the first step.”
Donor money can also help media assert
independence, especially where competition
in the advertising market is lopsided. By
providing media with funding alternatives,
When creating advertising
markets and selfsustaining media proves
prohibitively difficult,
assistance implementers
might need to organize
other types of projects. 12 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
one participant said, donors “can empower
them to . . . change the advertising market,
to say: ‘We’re not going to take Coca-Cola,
because it distorts our market.’”
Emphasize Capacity Building and
Business Skills
Participants stressed that the best training
teaches local journalists how to cover
critical local issues, rather than handing
them content to distribute. “It used to be
that radio was often regarded as a place to
run [public service
announcements].
That undervalues
the media,” one participant said. Another
added that funding
social messaging via
existing, non-independent media is “in effect
subsidizing a state
monopoly system.”
Donors’ subsidization of media systems of less-developed
regions through paid programming, a
common practice in the Middle East and
North Africa, does not create self-sustainable media outlets, several participants
argued. This type of subsidization creates
only dependent outlets answering the needs
of donors, not consumers.
While participants concurred that support
must be given to training programs over
social messaging, several participants questioned whether too many resources were
devoted to training reporters and too little
to training other media staff, from editors to
the marketing staff. One government official
cautioned: “You do training of journalists,
but you are creating fairly narrow training
models for journalists—basic interviewing
or writing skills, or how to verify data or
find sources. But is the model going to be
something that builds up sustainable and independent media?”
“Maybe we should have the business side of
management as an integral part of training,”
suggested a longtime media manager
involved in training. “Train them on the
skills level and the legal level and at the
business management level at the same time.
Teach them creative ways to get revenue.
Perhaps we should think of this as absolutely
an integral part of new
programs.”
While the world is full
of journalists passionate
about their craft, in many
places business management skills are lacking. “If
we don’t have the ability to
manage these operations,
sustainability is a moot
point,” one participant
said. Another participant with decades of experience in the newspaper business emphasized that journalists should learn business
skills, ranging from critical thinking to
financial analysis. “If you don’t sell, you
don’t eat. That’s the key message we have to
get across.”
How Donors Can Help
Many donors, both private and public, are
not making the long-term commitments
required for building sustainable media.
“We have seen really good, important media
companies die when donors leave,” one
participant stated. While donors are happy
to assist in the short term, they have a “consultant mentality” and do “not necessarily
care about what stays behind on the ground.”
Well-meaning assistance
efforts often had the
unintended effect of
distorting the media
market, ultimately harming
prospects for media
sustainability. Center for International Media Assistance 13
CIMA Working Group Report: Economic Sustainability of the Media
Conferences, workshops, and brief exchanges
may be easier to implement than long-term
programs, such as setting up journalism
schools or embedding experienced trainers
into newsrooms, but the impact of short-term
projects may not be sustainable or longlasting. The most effective media assistance
emphasizes sustainability, whether economic
sustainability of media
outlets or the durability of new skills learned.
“Piecemeal training is not
productive,” one media development expert said.
Even if a particular donor
can only guarantee a
short-term commitment,
better coordination and
collaboration would allow multiple donors to
provide consistent, sustained assistance. One
participant stressed that he “would like to see
consistency in policy, more pressure on governments” to encourage free media. Within
the U.S. government, views on media development policies differ among the embassies,
the State Department, and other funding
agencies, he said.
Many participants urged more cooperation
and less redundancy. One former journalist
now in public service said: “After Afghanistan and the invasion of Iraq, the Department of Defense spent millions of dollars
to reinvent the wheel. Every time there is a
failed state, every time a country emerges
into democracy or slides backward” the media
must be rebuilt. “The problem with foreign
assistance is stove-piping, where teams don’t
talk to each other. They do at the country
level but don’t do it well here in Washington.”
Despite the successes of community radio,
the U.S. government tends not to support
small-scale projects, participants said. One
participant familiar with U.S. Agency for International Development (USAID) programs
said he had advocated working with private
media on a local level, rather than on a
national level. In his experience, when the
U.S. government puts money into a program,
it expects big results. He lamented that the
agency had not done
enough to support smaller
radio stations in Zambia.
“Congress is going to say,
oh, gosh, what did you do
in Zambia? If you have
to report to Congress, a
big station with national
impact is sexier and seen
as providing more bang
for the buck than connecting small stations, which share stories and,
occasionally, advertisers. Face it, an ambassador doesn’t want to go out and cut a ribbon in
some twit village.”
Additional Sources of Revenue
Many of the examples offered by the participants to illustrate innovative methods
for building sustainability involved local,
rather than national, media. News-gathering
operations that cannot rely on sufficient advertising or paid circulation sometimes find
additional revenue streams. Several participants stressed that one key to sustainability
is training journalists to do their jobs so well
that they become excited about staying in
the profession and invested in the survival of
their stations. Their own ingenuity is what
is needed for innovative solutions to ensure
sustainability. Participants suggested many
models for additional sources of revenue,
although they did not discuss the impact of
these models on the quality of journalism.
While donors are happy
to assist in the short term,
they have a “consultant
mentality” and do “not
necessarily care about what
stays behind on the ground.” 14 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
“Can you find sustainable micro-outlets that
can find a niche where there is no business
to speak of?” The answer seemed to be
“yes.” Some members
encouraged the working
group to have faith
in the ability of local
media to find solutions
for sustainability once
they were equipped
with business skills and
training. “We need to
understand that people
in local markets are
creative enough to foster channels and find
those markets…Media can be sustainable if
we help them.”
Participants suggested a wide variety of
ways media could make money outside of
conventional advertising. “Think of the
business community as not only ad revenue,
but also a source of information and programming,” suggested one participant. A
radio expert said, “I’m trying to convince
public radio colleagues to develop sisterstation relationships. The
return on investment
is big.” Another added:
“Health journalism sells!
Look how many supplements newspapers have.
In many places, it might
work to have supplements.” One implementer suggested that in
diasporas in developed countries, “people
might be willing to pay for access to local
community media, perhaps through digital
means.”
Several participants said some of the
smallest media outlets had been particularly creative in seeking financial support.
At one radio station in Nepal, listeners
bring in fistfuls of rice, which the station
aggregates and sells. A popular source of
income for community
radio stations in Africa
is airing listeners’ announcements of births,
funerals, and festivals.
In Mongolia, “I’m sorry”
announcements read on
the airwaves are in high
demand. In Vietnam,
one restaurant’s profits
keep a news agency
afloat. These cases demonstrate that media
managers may need entrepreneurial savvy as
much as education in journalism to succeed
in terms of economic sustainability. “Help
news people become good businesspeople,”
one participant suggested. “In reality, it may
not work to generate all revenue from news.
So how can we assist media in such societies
to become better business owners?”
The irony is that media entrepreneurs often
struggle to secure assistance for enterprises
outside journalism. One
funder described her
dilemma: “Somebody
comes to us and says he
wants a loan for a café.
We say, ‘We’re not in
the cafe business,’ but it
might be the only way
to support certain types
of media, for example
a news agency. They have to be the ones to
understand their market and see what additional revenue streams they can bring in.”
Sustainability Beyond Finance
Sustainability should be considered as a
multi-faceted quality, participants said.
The irony is that media
entrepreneurs often
struggle to secure assistance
for enterprises outside
journalism.
Media managers may need
entrepreneurial savvy
as much as education in
journalism to succeed
in terms of economic
sustainability. Center for International Media Assistance 1
CIMA Working Group Report: Economic Sustainability of the Media
Media must attain social sustainability, which requires engagement with the
community, as well as institutional and
financial sustainability, which allows them
to attract resources and
manage those resources
transparently.
Breeze FM in Chipata,
Zambia, was cited by one
participant in the working
group as a good example
of sustainability, with its
reliable revenue and deep
roots in the community.
While about half the station’s income comes
from government grants and NGOs, the rest
is generated from community announcements and advertising. All staff members
are involved in marketing, and they can supplement their salaries through commissions
on advertising they sell. Breeze FM interacts
with its audience by holding open houses at
the station, reading letters from listeners,
and airing phone-in programs.
One participant offered USAID’s work in
Haiti as an example of a project that not only
emphasized economic sustainability, but
also endured amid political turmoil. When
the project began, 60 to 70 percent of the
country had no radio at all, and it seemed
impossible for media to make money. Rather
than involving individual stations that were
already viable, USAID’s media assistance
program worked to develop a network
of forty stations that cut news-gathering
costs and increased the revenue flow to all
stations. People in Haiti came to embrace the
media to the point that when the government
of Jean-Bertrand Aristide fell, supporters
of the radio network prevented the armed
forces from damaging the stations.
Attaining comprehensive sustainability is
possible only when donors are aware of
the strengths and weaknesses of the media
sector as a whole, participants said. The
best marketing skills, for
example, will not lead to
sustainability where media
lack a legal enabling environment, one participant
warned. “At the microeconomic level, in terms of
sustainability, I don’t see
how it could be achieved.
It will be a fish out of
water; we must create
the water. Sustainability is closely tied to
creating a functioning media center.”
Identifying Niches
Participants agreed that media sustainability
is a priority in all countries, regardless of the
level of development. One participant called
it a “misperception” that less-developed
economies do not have pockets of sustainable media.
During his presentation, Mark Whitehouse,
director of media development for International Research & Exchanges Board (IREX),
cited the potential for developing local news
offerings in North Africa. Anyone there
who can afford a satellite dish, he said, has
an “amazing choice on the surface” of panArab television, such as Al Jazeera and Al
Arabiya. National news is dominated by
state-subsidized broadcasters, while the
regional market is dominated by the slick
programming and sophisticated market
research of the pan-Arab satellite channels.
There is not much space for smaller stations
to move into the larger markets, but there is
a void in local news coverage. Whitehouse
said Al Jazeera only reported on local issues,
Attaining comprehensive
sustainability is possible
only when donors are
aware of the strengths and
weaknesses of the media
sector as a whole.16 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
when they had wider, regional significance.
As long as media are not crushed by media
law, the dearth of high-quality, local news
on the airwaves could mean potential for
media development in that market. But in
order to find and capture such niches, Whitehouse said, media must have the resources
to conduct audience and market research.
Currently, “donors aren’t willing to put up
money for that. Donors have to consider the
concept of research as an integral part of
sustainability—not just one-off studies but
throughout the life of a project.”
New media is another relatively undeveloped space where media assistance can
have a great impact. Less-developed and
developing countries have eagerly embraced
Web-based information, IP telephony, and
text messaging by cell
phone, giving them the
potential to leapfrog
Western nations in
terms of marrying
journalism with technology. Some participants suggested that in
addition to working
with traditional media,
media development
practitioners should
also consider encouraging alternate delivery
methods, perhaps by fueling the spread of
free and independent new media, which
can be less vulnerable to censorship and
official pressure. While some Americans
may consider the American media system
worthy of emulation, participants cautioned
that the American industry was not always a
useful model for other countries. Compared
with its foreign counterparts, “the newspaper
business in the United States is awful at innovation, because we have the belief that
whenever we try something new, it has to
be perfect and it takes a lot of money before
we do it,” one participant said. “While we
are all tempted to replicate our own system,
we need to recognize that the markets are
changing much faster than we want to
admit,” another working group member said.
An Alternative Model: The Case of
the Media Development Loan Fund
Participants considered funding mechanisms
other than grants, which could help media
become sustainable. One less traditional
mechanism for media support has been the
Media Development Loan Fund (MDLF),
a not-for-profit organization that provides
affordable capital to media companies.
Elena Popovic, MDLF’s general counsel,
described the fund to
the group and explained
that MDLF was started
by two journalists who
were “constantly critical
of the grants-oriented
approach” of media assistance and wanted to find
a more sustainable way of
assisting media.
While the working
group agreed that the
loan model has been
successful, Popovic pointed out that the
idea of providing loans to nascent media in
emerging markets had initially been met with
great skepticism. The skeptics were proved
wrong: in eleven years of work, the failure
rate for loan repayment has been less than
percent. In addition to careful selection
of clients, a key factor in the fund’s success
has been innovation. For some countries
where media loans are too risky, the fund has
branched out, offering guaranties, finance
Less-developed and
developing countries have
eagerly embraced Web-based
information, IP telephony,
and text messaging by cell
phone, giving them the
potential to leapfrog Western
nations in terms of marrying
journalism with technology. Center for International Media Assistance 17
CIMA Working Group Report: Economic Sustainability of the Media
leasing, and equity. MDLF also puts media
assistance within the reach of the general
public though its Free Press Investment
Notes.
MDLF has, however, found success to
be a double-edged sword. While MDLF
was successful in
raising funds for its
loan pool, the fund
found it increasingly difficult to
fundraise for its
administrative costs.
“The model is not
being rewarded, but
punished because
of how it works,”
Popovic told the
group. When MDLF appeals to potential
donors, it hears: “You are a business
model. You make money. Why should we
open our checkbook?” They do not understand that while MDLF is essentially a
bank for media development. Its dedication to affordable financing and business
training makes its operational costs much
higher than those of grant-making media
assistance institutions.
Although MDLF has
found other partners
for financial support,
George Soros’ Open
Society Institute is
one of few donors
who “understands
that in order to offer
subsidized funding to independent media,
the fund itself needs to be subsidized,”
Popovic said.
The working group was asked to consider
whether the loan model and other strategies successful in emerging democracies could be applied to less-developed
countries. Participants agreed that
media throughout developing and lessdeveloped economies have few financing
options besides grants and advertising.
Unlike many businesses, “media don’t
usually have a tangible asset for collateral,” Popovic said.
While microfinance
has been successful in
some of the most basic
economies, small loans
of $ 00 or $500 might
not be not enough to
purchase a printing
press or upgrade a
recording studio.
Some participants asked
if the MDLF model could be widely replicated with the same result beyond Central
and Eastern Europe, where a large part of
MDLF’s clients are based. One example
outside that region is the Botswana-based
Southern Africa Media Development
Fund. Known as Samdef, the for-profit
fund, worth $7 million, is the development
arm of the Media Institute of Southern
Africa. Samdef chief
executive officer Kate
Senye told the group
that her fund has “lots
of success stories,”
and said the loan
model must be regionally adapted. “Samdef
is the MDLF model
replicated in Southern African region, in a
different way,” she said. “When you come
to different environments, the models have
to change.”
Since its founding in 998, Samdef has
“created different models of investing in
While some Americans may
consider the American media
system worthy of emulation,
participants cautioned that
the American industry was
not always a useful model for
other countries.
Media throughout
developing and lessdeveloped economies have
few financing options besides
grants and advertising. 1 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
publishing houses, radio stations, televisions
stations,” Senye said, adding that commercial banks turn to Samdef when they want to
invest in media. Coordination has also been
crucial to Samdef’s success. “If donors want
to really make an impact in media development, in all these regions,” they must “force
coordination among these organizations.” Center for International Media Assistance 19
CIMA Working Group Report: Economic Sustainability of the Media
Private Support for Media Development
Presenter: Peter Graves,
Center for International Media Assistance
Moderator: Patrick Butler,
The Washington Post Company
One of CIMA’s objectives is to explore how
to increase the private sector’s involvement in media development. While the U.S.
government is the world’s largest donor for
media assistance, private
donors, such as the
Knight Foundation and
OSI, have greatly shaped
the field.
CIMA consultant Peter
Graves said estimates
compiled by CIMA
indicate that public and
private donors spend at least $ 20 million
each year supporting independent media
development, including journalism training
and education, media business development,
media law advocacy and institutional development, and programs using communications for other development purposes, such
as health education. This figure does not
include public diplomacy or Department of
Defense expenditures, which would raise the
amount significantly, Graves said.
Graves told the group that private non-profit
revenues grew by 57 percent from 994 to
2004, faster than U.S. gross domestic product
growth over that period. American private
assistance totals $95.2 billion, the bulk of
which consists of remittances sent by individuals to their home countries. He noted,
however, that “private sector giving goes
mostly to humanitarian relief and responding
to crises. Absent from the private sector is
any real ‘democracy development’ strategy,
as this has mostly been promoted by the
government.” He suggested that education,
advocacy, networking, and research were
needed to encourage more private giving for
media development.
After Graves’s presentation participants
discussed how to engage further the private
sector in media assistance.
Participants were asked
to consider: What are the
barriers to greater private
sector engagement? What
can private donors accomplish that public donors
cannot? Where are there
opportunities for greater
private sector involvement?
Obstacles to Private Sector
Support
Participants observed that while prominent
donors, such as the Bill and Melinda Gates
Foundation, have invested heavily in health,
poverty reduction, and education, they have
been more timid about delving into media
assistance. One expert said that when approached about making contributions, private
foundations worried that media assistance
might jeopardize international rapport. “The
first question they ask is if this will get them
crosswise with the government.”
The perceived political sensitivity of media
development projects inhibits more widespread private sector support, several participants said. The case for media development
The perceived political
sensitivity of media
development projects
inhibits more widespread
private sector support.20 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
has often been made as part of broader strategies for democratization, anti-corruption,
and good governance and accountability.
Media assistance may also provoke concern
and resistance from
foreign governments.
One implementer
described Morocco
as a country where
media development has
become more difficult
for Americans, especially since September
, 200 : “A lot of the work is viewed as part
of U.S. foreign policy, and tied to a negative
part of U.S. policy. . . . That limits us. Twoand-a-half years ago, I could meet with the
head of the journalists’ syndicate and talk
about joint projects. Now he’s the leading
voice arguing against U.S. assistance.”
On the domestic front, one obstacle is that
corporations contemplating involvement
in media development may worry about
making themselves vulnerable to accusations
of selfishly developing potential overseas
markets and not performing acts of social
responsibility. Additionally, as one implementer
pointed out, among
journalists and some
private sector experts,
“many—and rightly
so—can’t accept any
consulting money from
the U.S. government.” Technical assistance
might need to be strictly on a volunteer basis
if provided in cooperation with governmentfunded initiatives or coordinated by the
private sector and with private dollars.
Participants discussed whether the perception of media and press freedom as development work’s “third rail” could be countered
by downplaying the relationship between
press freedom and democratization. Strong media
are also important for
economic growth and the
delivery of information
on health and education.
For example, one participant mentioned Nobel
laureate and economist
Amartya Sen’s observation that famine has
never occurred in a democracy with a free
press; intimations of mass starvation are
impossible to hide where journalists freely
give voice to public criticism and warn of
impending crises.
Many participants spoke about how
problems of media development and media
freedom had been “pigeonholed” as an issue
of governance. One implementer argued
for “bringing media
development out of the
‘democracy ghetto.’”
As she explained,
“Media development has
been pigeonholed into
democracy assistance,
which makes it handsoff.” Another participant
agreed: “We need more
good ambassadors and
journalists who understand how important
outside the democracy
ghetto this is. If you just talk about freedom
of expression, [it sells] much better.”
Media development practitioners must
convince people outside the journalism and
democracy promotion fields that they also
Media development
practitioners must convince
people outside the
journalism and democracy
promotion fields that they
also have a responsibility
to promote free and
independent media.
Strong media are also
important for economic
growth and the delivery of
information on health and
education. Center for International Media Assistance 21
CIMA Working Group Report: Economic Sustainability of the Media
have a responsibility to promote free and independent media. “Media assistance should
be embedded more broadly. Media lacks
a distinctive identity among the assistance
community,” observed an expert on democratization. One participant who has worked
with USAID noted: “Media has an information aspect and an
economic growth aspect.
Media that has advertising brings together
buyers and sellers. That
promotes growth. In
the early 990s, we
were trying to convince
USAID that there was
a sector-level problem with Russian media.
USAID said, ‘We don’t do that, it’s media.’
Others said, ‘That’s sector development.’”
“Maybe calling this ‘independent media development’ is the wrong thing to do,” a journalist said. “There may be a reason why they
don’t line item ‘media development.’ [Where
I work], that’s the last thing that we’d say.”
How to Approach the Private
Sector
Many participants were optimistic that
skittish media companies’ fears could be
assuaged if the media development sector
could make a good case for itself. One
participant suggested demonstrating to
private foundations that media development
“is about humanitarian response. Talking
to them from that perspective—socially
powerful, entrepreneurial—it resonates
more.” “When corporations hear wellformed cases about what is needed and why,
they buy into the idea,” said a news industry
veteran. Another agreed that advocacy to
the private sector was important, but argued
against downplaying the power of the media:
“We have to make the big case, rather than
narrow down and diminish the importance
by speaking their language.”
One participant said the media development community should figure out how to
provide donors with “instant gratification.”
In philanthropy, many
charities can say, “With
this dollar, you will
save one child.” Media
development needs “a
yardstick that is understandable to package
our cause. For example,
we could say, ‘With this
dollar, you can bring information on HIV/
AIDS to ten more people.’”
Another approach would be to broaden
potential donors’ awareness of how media
is integral to their own philanthropic
causes. Many programs already include a
media component, utilizing newspapers,
soap operas, or radio programs, to deliver
messages and change behavior in areas
such as safe sex, schooling, and sanitation.
Information campaigns could be even more
effective when media are credible and have
a wide audience. “When you go to funders,
make them understand that without proper
media outlets, you can’t get your messages
across.” But many participants said that the
media development community must first
gather good research for its case. “All these
foundations are kind of linked to each other,
so if we disappoint one, the rest might not be
interested,” said one participant.
Awareness of Volunteer
Opportunities
Opportunities for American businesses
to contribute to media assistance are not
The media development
community should figure out
how to provide donors with
“instant gratification.” 22 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
limited to financial giving. Many participants enthusiastically backed the idea of
promoting exchanges for journalists and
sending trainers overseas. While media in
the United States, struggling through their
own period of downsizing and upheaval,
may find it difficult to justify writing a big
check for media development abroad, they
may be more receptive to sending experts to
help, several participants said.
Although a number of groups, including
media development implementers IREX,
Internews, and the International Center
for Journalists, already facilitate some
exchanges, many participants supported
sending more “swat
teams” abroad. These
teams, drawn from
newspapers, broadcast
networks, magazines,
and retired journalists, would advise pro
bono on management,
editing, and advertising. “I think lots of
people in our business
would be very interested in this sort of team
approach,” one prominent journalist said.
“Once we have an idea that’s well formed, I
think this is a relatively simple matter to get
lots of media companies involved like this.”
There was widespread agreement among
the participants that while piecemeal,
“parachute” training is less effective than
long-term sustained training, serious volunteerism “must stay on the agenda.” Whether
sabbaticals for media titans or exchanges
among newsroom staff, there is enormous
potential for American journalists to share
their skills and talents with their counterparts in China, Cambodia, Vietnam, and
other countries where journalism is struggling. Journalism executives, past and
present, said: “It would be a great benefit
in lots of big media companies” and “you
would find people clamoring to get on these
teams.”
Some participants said more widespread
engagement in media assistance was not due
to the private sector’s lack of interest but
because of the limited information on how to
help. “We need to know where to go, where
there is fertile ground,” urged one longtime
journalist. “If you asked me right now where
to go, I wouldn’t have a clue.”
While there was broad
agreement on the need
for greater coordination,
finding an institution to
tackle the task of orchestrating cooperation is a
major challenge. Several
suggested that CIMA
might be suited to take
on that role. “CIMA can
make a great contribution in terms of coordination for institutions
working on different aspects of media assistance,” one participant said. “CIMA can play
the role of reaching out,” another suggested,
adding that one radio station owner he
talked to “didn’t have enough well-trained
people for the business side. The role we can
play … is to connect those two dots.”
Boosting Business Journalism
Participants suggested that private donors
had more windows of opportunity available
than public donors. In China, the argument
that active media spur economic growth
could lead to a major breakthrough in media
More widespread
engagement in media
assistance was not due to
the private sector’s lack of
interest but because of the
limited information on how
to help. Center for International Media Assistance 23
CIMA Working Group Report: Economic Sustainability of the Media
development. The Communist government
already gives business periodicals more
leeway than other media because of their
limited circulation. The information in them
seldom makes the leap to radio and TV.
Officials know that China cannot compete
in “global markets without real-time information. Business reporting becomes a
Trojan horse for greater transparency,” said
one participant with extensive experience in
East Asia. Another agreed, adding: “China
has already recognized media as an underperforming sector of the economy. If you’re
talking to China, you can talk to them on
that basis, that if you got to the same level of
performance as in the U.S., it would contribute to the GDP. They get that argument.”24 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
Moderator: Jerry Hyman, Center for
International and Strategic Studies
Participants agreed the media development community needed to address two
main questions. First, how we can better
promote media development and thinking
about media as a sector? Second, how do we
engage other foundations and international
organizations in media assistance?
On the first issue, media assistance donors
and practitioners must advocate independent
media as an end as well as a means. They
must also emphasize that freedom of speech
and freedom of information are important
basic rights. Those in the media development sector must also find better ways of
articulating that free and independent media
are critical for health and social development, as well as for economic growth, and
not just for democracy.
One participant pointed out that the group’s
general prescription for better economic
sustainability of the media—better coordination, wider education and advocacy, more
evaluation, and increased networking—
could apply to many areas within media assistance, including media law or professional
journalism training.
The group specifically advised:
n Encourage media to be consumercentric. Implementers should teach
media owners how to lure new advertisers and donors should build market
research and audience surveys into
media assistance. Media will not be able
to attract advertising revenue unless the
news content is relevant to the audience.
n Be reasonable about the degree to
which sustainability can be achieved.
Donors should be aware that programs
geared only toward full sustainability are
a vain exercise in countries with inhospitable legal and economic environments
for media. Donors should encourage
media to become profitable, while remembering that good journalism has a
public service function.
n Teach media owners business skills.
While implementers should continue
training journalists in reporting, they
should also teach media owners management and financial skills.
n Tailor media development to local
needs. Donors and implementers should
base their assistance on current, local
needs. There is no effective one-sizefits-all model for media development.
To thrive, a media operation must grow
local roots and be operated by indigenous journalists.
n Include capacity building in all
programs. Implementers should teach
journalists how to identify and cover
important issues, rather than telling them
what to report. Social messaging, paid
programming, and message advocacy do
not help media companies become selfsustaining.
n Give media sustained, long-term
support. Donors should try to provide
longer-term support and coordinate
efforts with each other to sustain
projects. The U.S. government and other
donors are sometimes too focused on
producing big and immediate results,
Recommendations Center for International Media Assistance 2
CIMA Working Group Report: Economic Sustainability of the Media
while neglecting strategies for sustaining
them. Even the best media organizations
can be killed if funding is cut off too
abruptly for them to adapt.
n Search for niches ripe for sustainability. Even in the harshest economic
conditions, donors should assess local
conditions to help local media find
niches with high potential for sustainable
media. At the same time, donors should
avoid distorting nascent media markets
and crowding out existing private, independent media.
n Explore new approaches for assistance. Donors should consider new
media and alternative delivery methods.
This strategy would be particularly
useful in regions where the media are
dominated by the state or struggle under
an oppressive legal environment.
n Create mechanisms for coordination. Donors, implementers, and others
concerned about media development
should support the creation of a network
to help private sector donors share
reports, information, and strategies.
n Make the case for media beyond democratization. Implementers should
appeal to potential donors by explaining
the importance of the media in terms of
social and economic development. Free
and independent media are unquestionably crucial for the proper functioning of
democratic institutions, but the argument
that media development and healthy
media are crucial for solving humanitarian problems might be more compelling
to donors, especially those in the private
sector.
n Increase the private sector’s
awareness of media assistance and
how to help. Donors, implementers,
and others in media development should
take their case to the private sector.
American media companies might be
willing to contribute, whether financially
or through exchanges and technical assistance, but they will remain unaware of
how they can help unless implementers
and others on the ground provide information about international opportunities
and needs.26 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
of the Media in Developing
Countries
Center for International Media AssistanceThe Center for International Media Assistance (CIMA), a project of the
National Endowment for Democracy, aims to strengthen the support, raise
the visibility, and improve the effectiveness of media assistance programs
by providing information, building networks, conducting research, and
highlighting the indispensable role independent media play in the creation
and development of sustainable democracies around the world.
An important aspect of CIMA’s work is to research ways to attract additional U.S.
private sector interest in and support for international media development.
CIMA convenes working groups, discussions, and panels on a variety of
topics in the field of media development and assistance. The center also
issues reports and recommendations based on working group discussions
and other investigations. These reports aim to provide policymakers, as
well as donors and practitioners, with ideas for bolstering the effectiveness
of media assistance.
Marguerite Sullivan
Director
Center for International Media Assistance
National Endowment for Democracy
1025 F Street, N.W., 8th Floor
Washington, D.C. 20004
Phone: (202) 378-9700
Fax: (202) 378-9407
Email: CIMA@ned.org
URL: http://www.ned.org/about/cima.htmlTable of Contents
Preface 3
Executive Summary 4
Background 6
The Challenges of Economic Sustainability 7
Strategies for Sustainability 10
Private Support for Media Development 19
Recommendations 24
Appendix: Working Group Participants 26 Center for International Media Assistance 3
CIMA Working Group Report: Economic Sustainability of the Media
On June 22, 2007, the Center for International Media Assistance (CIMA) at the
National Endowment for Democracy organized a working group to discuss key issues
related to the economic sustainability of media in developing countries, as well as
relevant strategies for donors and implementers. Perspectives for greater private
sector involvement in media development were also discussed.
CIMA is grateful for the valuable contributions of the working group participants.
We extend our particular thanks to Patrick Butler, Vice President of The Washington
Post Company, Craig LaMay, Assistant Professor at Northwestern University’s Medill
School of Journalism, and Gerald Hyman, Senior Adviser and President of Hills
Program on Governance at the Center for Strategic and International Studies, for their
skillful moderation of this important discussion. Thanks also go to veteran journalist
Ann McFeatters for helping to organize the discussion into a comprehensive report.
We would also like to acknowledge William Dunkerley, Elizabeth Fox, Peter Graves,
Elena Popovic, Bill Siemering, and Mark Whitehouse for insightful presentations that
framed the group’s discussion and fostered much debate.
We hope that this report will become an important reference for international media
assistance efforts.
Marguerite Sullivan
Director
Center for International Media Assistance
Preface4 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
The Center for International Media Assistance (CIMA) at the National Endowment
for Democracy aims to strengthen the
support, raise the visibility, and improve
the effectiveness of media assistance
programs by providing information, building
networks, conducting research, and highlighting the indispensable role independent
media play in the creation and development of sustainable democracies around the
world. An important aspect of CIMA’s work
is to research ways to create an environment
that will allow independent and free media
to be sustainable and to attract additional
U.S. private sector interest in international
media development.
On June 22, 2007, CIMA convened a
working group of experts on economic
sustainability of the media in developing
and less-developed countries. The oneday meeting brought together twenty-five
donors, implementers, academics, and other
media experts to explore common challenges and exchange lessons learned. Journalist
Ann McFeatters served as the rapporteur for
the meeting.
CIMA created the working group to
stimulate a candid dialogue about issues of
economic sustainability in media assistance
and the potential for wider private-sector
involvement in media development. The
working group’s ultimate goal was to form
recommendations for policymakers on how
to improve U.S. foreign assistance with
respect to economic sustainability of free
and independent media. Among the group’s
major findings were:
• Public Service and Consumer-centric
Media: Simple economic sustainability
does not automatically guarantee good
journalism. The media have a public
service mission: producing high-quality,
consumer-centric journalism.
• Situation-specific Programs: Media
sustainability is not always attainable,
but should be a major element of media
assistance. In some places, laws or the
marketplace may render sustainability impossible for independent media,
but even in those cases donors should
include capacity-building programs.
There is no one-size-fits-all solution for
sustainability—donors must tailor their
programs to adjust to specific economic
conditions.
• Business Skills: Donors and implementers should support training in
business skills. When equipped with
management and financial skills, media
owners can develop creative solutions
for making their outlets more sustainable
even in the least developed economies.
While business knowledge and skills
are essential to the sustainability of any
media enterprise, they are often overlooked in the promotion of independent
media. The business aspects of media
development should not be ignored.
• Media Beyond Democratization:
Many in the private sector view media
development as a politically sensitive
issue, because it has often been part of
democracy and governance programs.
Executive Summary Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
Media development practitioners should
broaden their appeal to donors and raise
awareness of how free and independent
media contribute to social and economic
development. Certain niches of media,
such as local or health news, hold promise
for future development in many countries.
The benefits of media development are
abundant and wide-ranging, and donors
should be more aware of the sector’s
potential to address their areas of interest.
• Increased Awareness: The growth in
private sector philanthropy over the past
ten years is expected to continue in the
future and represents the best opportunity
for media development organizations to
expand their resource base. Education
and advocacy will be required to inform
Americans of the powerful and positive
impact that independent media can have
in developing countries. Donors should
also understand that media development is a long-term project that requires
sustained support; donors should not
expect a program to become completely
sustainable in an unreasonable period of
time.6 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
Background
Free and independent media are necessary
for the effective functioning of democratic
societies. Democratic governance depends
on the ability of citizens to make informed
decisions, which requires the dissemination
of accurate information through free
and independent
media. Media
not only facilitate
communication, but
also expose corruption
and hold public
officials accountable.
Media are crucial
for economic
growth, because
they are responsible
for providing information, aiding
communication, and promoting transparency.
Media cannot perform these functions,
however, when journalists are unable to
exercise their rights or the regulatory
environment in which they operate
discourages independence and plurality.
Media development assistance comes in
many forms, including training for reporters, editors, and publishers; grants and loans
to media outlets; support for journalism
networks and associations; conferences,
workshops, and exchange programs; and
collaboration with centers for
education and practical training
of journalists. The most popular media assistance activity
among U.S. donors and implementers is journalism training.
Many in the field, however,
argue that while fostering good
journalistic practices is important, more consideration should
be given to the state of the media sector itself. When media enterprises are
self-sustaining—financially liberated from
corruptive practices, government influence,
or dependence on foreign nongovernmental
organizations (NGOs)—they are more likely
to assert and maintain editorial freedom and
independence.
Many in the field, however,
argue that while fostering
good journalistic practices
is important, more
consideration should be
given to the state of the
media sector itself. Center for International Media Assistance 7
CIMA Working Group Report: Economic Sustainability of the Media
Presenter: William Dunkerley,
William Dunkerley Publishing Consultants
In the first presentation, William Dunkerley,
a veteran publisher and editor, argued that
sustainability in and of itself should not
be the singular goal of media assistance.
Instead, he maintained, creating consumercentric news offerings is paramount
in serving democratic objectives. In a
consumer-driven business model, advertising becomes a key part
of the media. As media
outlets build up their
consumer base, they
bolster their effectiveness
as advertising vehicles.
That, in turn, yields
increased advertising
revenues with which to
support consumer-centric
news. In this model, media
audiences and advertisers
alike benefit when media companies operate
with credibility and integrity. This model
cannot, however, be applied everywhere,
Dunkerley cautioned. In some places, the
economy may be so weak that the local businesses have no incentive to advertise. In
other circumstances, both media and tax
laws of a country present obstacles to sustainable media. In such situations, media
assistance must take on forms other than
direct support of media outlets—the media
environment itself must be encouraged to
change. In countries that do not have a
functional economy, not even an emerging
one, Dunkerley suggested that assistance
efforts focus on supporting objectivity and
pluralism in journalism.
Following his presentation, participants
discussed the meaning of economic sustainability. Northwestern University journalism professor Craig LaMay’s definition of
sustainability as “financial sustainability
with a public-service editorial mission”
was
included in papers distributed to participants
before the meeting. LaMay described news
media as having qualities of both a “mission
good” and a “revenue good.”
2
Media
managers are faced with two, sometimes
competing, objectives: providing information as a public service
and operating a sustainable business. LaMay
wrote that for a number
of reasons, “quality news
is less attractive to large
audiences, is much more
costly to produce than
sex, scandal, and trivia,
and brings lower returns.
If your first duty is to
shareholders, editorial
quality is going to suffer.” LaMay also
pointed out that media sustainability is not a
struggle limited to less-developed countries
or emerging democracies: “Quality public
affairs media everywhere find it difficult to
support themselves financially, and there
is no easy way around these economic
problems.”
Craig LaMay, Exporting Press Freedom: Economic and Editorial Dilemmas in International Media Assistance (Transaction
Publishers: New Brunswick, NJ, 2007), p. 27.
Craig LaMay, “The Dismal Economics of News and Public
Affairs” (background paper, Working Group Meeting on the
Economic Sustainability of the Media, Center for International
Media Assistance, National Endowment for Democracy, June 22,
2007).
See note 2 above
Media managers are
faced with two, sometimes
competing, objectives:
providing information
as a public service and
operating a sustainable
business.
The Challenges of Economic Sustainability Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
Although the working group members
agreed that sustainability meant more than
financial viability, they found it difficult
to pinpoint what it requires beyond profitability. The group was asked to consider
the following questions: When we set an
objective of sustainability, are we assuming
media with news content? What degree of
editorial independence do we expect? If a
media outlet is not profitable, but is part of a
conglomeration that is, do we still consider
it sustainable? One implementer posed a hypothetical case: “Supposing I am an operator
in an independent market, and I want to
start a radio station, the largest amount of
my programming will be devoted to sports,
music, and things of interest to my listeners.
That creates the foundation of market independence. But then we get to the question of
social mission. Where does that fit in?”
“We’re talking about sustainable journalism,
not sustainable media,” observed one participant. It is not enough
to build independent,
self-sustaining media;
most involved in media
development have in
mind serious, objective
journalism, the participant said.
Referencing Dunkerley’s overview of the
traditional business model for media, a participant cautioned that, in theory, a “good
product leads to audience, which leads to
new products. But this cycle does not work
very well in every market.” That circle of
revenue can easily fail, especially in developing economies where companies have
limited advertising budgets. For example,
if a newspaper’s readership is too small,
companies may seek to use other media
venues, such as billboards, which are seen
by many people, thereby reducing the
revenue received by the newspaper and,
perhaps, causing the paper’s collapse.
Is Sustainability Always Possible?
One participant cautioned against creating
unrealistic expectations for local radio
stations in less-developed countries. “We
do expect people in the developing world
to do things we can’t do ourselves. In this
country, public broadcasting couldn’t do
it without federal money. We should appreciate how inventive local stations are in
raising money.”
Participants gave a number of examples of
situations in which sustainability was not a
reasonable goal. Dunkerley described a visit
to a town in the Ural Mountains about seven
years ago. It was a place where, he noted,
the creation of economically sustainable
media was not possible. A major local industrial business supported the community’s
only newspaper in return
for favorable coverage,
he said. Advertising
from a multiplicity of
companies could have
given the paper a chance
at greater independence. A weak local
economy, however, coupled with national
tax and advertising regulations that discouraged advertising, made profitability and
independence quite elusive. It was not until
mid-2002 that those regulations were finally
repealed, he added.
In such situations, Dunkerley said, donors
should watch for opportunities for creating
sustainable media. As an economy grows
and business competition mounts, advertising becomes more important and media have
better odds for becoming self-supporting.
Participants noted that teaching media to
Teaching media to find a
strategy for sustainability is
tricky but rarely impossible. Center for International Media Assistance 9
CIMA Working Group Report: Economic Sustainability of the Media
find a strategy for sustainability is tricky but
rarely impossible. One implementer joked,
“It’s not so much teaching a pig to fly as
teaching the pig to run faster.”
Balancing Revenue and Mission
The participants agreed that the unfortunate
truth about the media business is that newsgathering costs more
than most consumers
are willing to pay—or
perhaps even more than
most are capable of
paying. One veteran of
the news industry told
the group that the cost
of producing news was
about ten times what
the consumer paid.
Only with advertising
revenue, accompanied
by paid subscriptions
or wide circulation, does news become affordable to the masses. A former journalist
observed that “the only guarantee of a free
press is profitability.”
In some countries, however, the tradition
of editorial independence—the separation
between the advertising department and the
newsroom—is weak, even when the press
is profitable. Independence can be difficult
to assert, particularly in places where media
struggle to shake the influence of bribery and
corruption. Journalists are often not insulated
from advertisers’ interests.
“Your owner is important,”
said one entrepreneur, who
also noted that without
careful restraint, the same
reliable revenue that
makes media editoriallyfree may morph into a
hunger to drive up profits
by replacing serious news
with pop music, celebrity
gossip, or soap operas.
One funder described a
recent meeting with a beneficiary in Bangladesh, who complained that:
“We in Bangladesh have advertisers who start
dictating our editorial policy. I’d like to be
able to say ‘no’ to advertising.”
The cost of producing
news was about ten times
what the consumer paid.
Only with advertising
revenue, accompanied
by paid subscriptions or
wide circulation, does news
become affordable to the
masses. 10 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
Strategies for Sustainability
Media Assistance for Less-Developed
Countries
Presenters: Bill Siemering,
Developing Radio Partners
Elizabeth Fox,
USAID
Mark Whitehouse,
IREX
Moderator: Patrick Butler,
The Washington Post Company
Media Assistance for Developing
Countries
Presenter: Elena Popovic,
Media Development Loan Fund
Moderator: Craig LaMay,
Northwestern University
To help focus the discussion, participants
were asked to consider the economic sustainability of media in two different environments: less-developed countries and developing countries. The distinction was made on
the premise that in less-developed countries,
where the economic and financial institutions
necessary for the media’s sustainability are
weak or lacking, media development practitioners may need to use different strategies
from those used in developing countries,
where markets are more sophisticated and
more conducive to sustainability. Media
development focuses on building the skills
of journalists and supporting media outlets
themselves, rather than merely supporting particular programming or coverage of
certain issues.
During the course of the discussion, however,
nearly all of the participants questioned
whether making a distinction between lessdeveloped and developing economies was
a useful media development strategy. One
participant who had worked in East Asia said
the most salient difference that she observed
in media assistance was not between lessdeveloped and developing economies, but
between emerging democracies and closed
regimes. Each political system has its own
particular attitude toward the media. “One
of the difficult things is that if you’re dealing
with a country that has gone through some
sort of democratization, the role of news is
viewed in a certain way. But in China and
Vietnam, news content is subject to controls.
The closer you get to the government, the
tighter the controls. The way you [media assistance implementers] operate in them is
different” than in emerging democracies.
Sustainable Media in Unstable
Markets
After regional experts described media development in less-developed areas of Latin
America, sub-Saharan Africa, and the
Middle East, participants posed the following
questions to the working group: What can
we reasonably expect to do under the conditions we have described here? Can media
companies achieve profitability and do that
through legitimate media activities?
In some countries, economic, political, or
legal conditions render full sustainability an
unrealistic goal, some participants argued.
When creating advertising markets and
self-sustaining media proves prohibitively
difficult, assistance implementers might Center for International Media Assistance 11
CIMA Working Group Report: Economic Sustainability of the Media
need to organize other types of projects. “I
think there is a hierarchy that needs to be
considered,” observed one participant. “In
terms of talking about an independent and
consumer-centric media, is the government
going to permit it? If the government is not
going to permit free media, you’re left with
some variant of the Radio Marti approach
[of U.S. government-funded broadcasts into
Cuba]. Second, is there a set of laws that
will enable it: media law, tax law, advertising law? Is there a legal structure that will
support it? That’s more important than
training and other forms of assistance. If you
don’t address them, you’ll be stumbling over
the other forms of assistance.”
At the same time, identifying the mission in a
given region is essential
for donor countries,
insisted one participant.
Donors should “question
whether there’s good
reason to teach them how
to become self-sustainable.” In some cases,
sustainability might
not be the paramount concern. “If you are
going into a country with a health-education
message or a political message, you are
better off not trying to pretend you are going
in to provide media sustainability,” she
observed.
Participants agreed that regardless of
economic conditions and whether sustainability was a realistic short-term goal,
imparting fundamental skills for better
journalism and economic sustainability was
important. “I haven’t seen a market where it
won’t work. Very smart design can do both
communications for development and media
development,” said one participant.
Distortion of the Media Market
Participants said that well-meaning assistance efforts often had the unintended effect
of distorting the media market, ultimately
harming prospects for media sustainability.
NGO-run radio, full of programming paid
by charity groups, can be an effective way to
deliver messages about health or education,
but it can also create dependency on NGOs
for funding, instead of encouraging station
owners to identify locally-based sources of
revenue.
Using Latin America as an example, one
expert of that region warned against distorting fragile developing markets. Communication-for-development programs have created
vibrant media outlets
throughout that region, she
said, but a large influx of
donor money to fund information campaigns could
potentially overwhelm the
advertising market.
To be safe, one participant advised: “Stay out of
those areas where there
already exists commercial media. Go into
areas where there isn’t commercial media,
and where there’s higher risk. Anticipate
what the market will do.” Others echoed that
sentiment, encouraging donors to be risk
takers: “Keep in mind that you can teach a
lot of the elements of economic sustainability. . . . It’s important for any media outlet
anywhere—taking a risk. The risk that has
to be taken first is the donor’s. . . The donor
takes the first step.”
Donor money can also help media assert
independence, especially where competition
in the advertising market is lopsided. By
providing media with funding alternatives,
When creating advertising
markets and selfsustaining media proves
prohibitively difficult,
assistance implementers
might need to organize
other types of projects. 12 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
one participant said, donors “can empower
them to . . . change the advertising market,
to say: ‘We’re not going to take Coca-Cola,
because it distorts our market.’”
Emphasize Capacity Building and
Business Skills
Participants stressed that the best training
teaches local journalists how to cover
critical local issues, rather than handing
them content to distribute. “It used to be
that radio was often regarded as a place to
run [public service
announcements].
That undervalues
the media,” one participant said. Another
added that funding
social messaging via
existing, non-independent media is “in effect
subsidizing a state
monopoly system.”
Donors’ subsidization of media systems of less-developed
regions through paid programming, a
common practice in the Middle East and
North Africa, does not create self-sustainable media outlets, several participants
argued. This type of subsidization creates
only dependent outlets answering the needs
of donors, not consumers.
While participants concurred that support
must be given to training programs over
social messaging, several participants questioned whether too many resources were
devoted to training reporters and too little
to training other media staff, from editors to
the marketing staff. One government official
cautioned: “You do training of journalists,
but you are creating fairly narrow training
models for journalists—basic interviewing
or writing skills, or how to verify data or
find sources. But is the model going to be
something that builds up sustainable and independent media?”
“Maybe we should have the business side of
management as an integral part of training,”
suggested a longtime media manager
involved in training. “Train them on the
skills level and the legal level and at the
business management level at the same time.
Teach them creative ways to get revenue.
Perhaps we should think of this as absolutely
an integral part of new
programs.”
While the world is full
of journalists passionate
about their craft, in many
places business management skills are lacking. “If
we don’t have the ability to
manage these operations,
sustainability is a moot
point,” one participant
said. Another participant with decades of experience in the newspaper business emphasized that journalists should learn business
skills, ranging from critical thinking to
financial analysis. “If you don’t sell, you
don’t eat. That’s the key message we have to
get across.”
How Donors Can Help
Many donors, both private and public, are
not making the long-term commitments
required for building sustainable media.
“We have seen really good, important media
companies die when donors leave,” one
participant stated. While donors are happy
to assist in the short term, they have a “consultant mentality” and do “not necessarily
care about what stays behind on the ground.”
Well-meaning assistance
efforts often had the
unintended effect of
distorting the media
market, ultimately harming
prospects for media
sustainability. Center for International Media Assistance 13
CIMA Working Group Report: Economic Sustainability of the Media
Conferences, workshops, and brief exchanges
may be easier to implement than long-term
programs, such as setting up journalism
schools or embedding experienced trainers
into newsrooms, but the impact of short-term
projects may not be sustainable or longlasting. The most effective media assistance
emphasizes sustainability, whether economic
sustainability of media
outlets or the durability of new skills learned.
“Piecemeal training is not
productive,” one media development expert said.
Even if a particular donor
can only guarantee a
short-term commitment,
better coordination and
collaboration would allow multiple donors to
provide consistent, sustained assistance. One
participant stressed that he “would like to see
consistency in policy, more pressure on governments” to encourage free media. Within
the U.S. government, views on media development policies differ among the embassies,
the State Department, and other funding
agencies, he said.
Many participants urged more cooperation
and less redundancy. One former journalist
now in public service said: “After Afghanistan and the invasion of Iraq, the Department of Defense spent millions of dollars
to reinvent the wheel. Every time there is a
failed state, every time a country emerges
into democracy or slides backward” the media
must be rebuilt. “The problem with foreign
assistance is stove-piping, where teams don’t
talk to each other. They do at the country
level but don’t do it well here in Washington.”
Despite the successes of community radio,
the U.S. government tends not to support
small-scale projects, participants said. One
participant familiar with U.S. Agency for International Development (USAID) programs
said he had advocated working with private
media on a local level, rather than on a
national level. In his experience, when the
U.S. government puts money into a program,
it expects big results. He lamented that the
agency had not done
enough to support smaller
radio stations in Zambia.
“Congress is going to say,
oh, gosh, what did you do
in Zambia? If you have
to report to Congress, a
big station with national
impact is sexier and seen
as providing more bang
for the buck than connecting small stations, which share stories and,
occasionally, advertisers. Face it, an ambassador doesn’t want to go out and cut a ribbon in
some twit village.”
Additional Sources of Revenue
Many of the examples offered by the participants to illustrate innovative methods
for building sustainability involved local,
rather than national, media. News-gathering
operations that cannot rely on sufficient advertising or paid circulation sometimes find
additional revenue streams. Several participants stressed that one key to sustainability
is training journalists to do their jobs so well
that they become excited about staying in
the profession and invested in the survival of
their stations. Their own ingenuity is what
is needed for innovative solutions to ensure
sustainability. Participants suggested many
models for additional sources of revenue,
although they did not discuss the impact of
these models on the quality of journalism.
While donors are happy
to assist in the short term,
they have a “consultant
mentality” and do “not
necessarily care about what
stays behind on the ground.” 14 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
“Can you find sustainable micro-outlets that
can find a niche where there is no business
to speak of?” The answer seemed to be
“yes.” Some members
encouraged the working
group to have faith
in the ability of local
media to find solutions
for sustainability once
they were equipped
with business skills and
training. “We need to
understand that people
in local markets are
creative enough to foster channels and find
those markets…Media can be sustainable if
we help them.”
Participants suggested a wide variety of
ways media could make money outside of
conventional advertising. “Think of the
business community as not only ad revenue,
but also a source of information and programming,” suggested one participant. A
radio expert said, “I’m trying to convince
public radio colleagues to develop sisterstation relationships. The
return on investment
is big.” Another added:
“Health journalism sells!
Look how many supplements newspapers have.
In many places, it might
work to have supplements.” One implementer suggested that in
diasporas in developed countries, “people
might be willing to pay for access to local
community media, perhaps through digital
means.”
Several participants said some of the
smallest media outlets had been particularly creative in seeking financial support.
At one radio station in Nepal, listeners
bring in fistfuls of rice, which the station
aggregates and sells. A popular source of
income for community
radio stations in Africa
is airing listeners’ announcements of births,
funerals, and festivals.
In Mongolia, “I’m sorry”
announcements read on
the airwaves are in high
demand. In Vietnam,
one restaurant’s profits
keep a news agency
afloat. These cases demonstrate that media
managers may need entrepreneurial savvy as
much as education in journalism to succeed
in terms of economic sustainability. “Help
news people become good businesspeople,”
one participant suggested. “In reality, it may
not work to generate all revenue from news.
So how can we assist media in such societies
to become better business owners?”
The irony is that media entrepreneurs often
struggle to secure assistance for enterprises
outside journalism. One
funder described her
dilemma: “Somebody
comes to us and says he
wants a loan for a café.
We say, ‘We’re not in
the cafe business,’ but it
might be the only way
to support certain types
of media, for example
a news agency. They have to be the ones to
understand their market and see what additional revenue streams they can bring in.”
Sustainability Beyond Finance
Sustainability should be considered as a
multi-faceted quality, participants said.
The irony is that media
entrepreneurs often
struggle to secure assistance
for enterprises outside
journalism.
Media managers may need
entrepreneurial savvy
as much as education in
journalism to succeed
in terms of economic
sustainability. Center for International Media Assistance 1
CIMA Working Group Report: Economic Sustainability of the Media
Media must attain social sustainability, which requires engagement with the
community, as well as institutional and
financial sustainability, which allows them
to attract resources and
manage those resources
transparently.
Breeze FM in Chipata,
Zambia, was cited by one
participant in the working
group as a good example
of sustainability, with its
reliable revenue and deep
roots in the community.
While about half the station’s income comes
from government grants and NGOs, the rest
is generated from community announcements and advertising. All staff members
are involved in marketing, and they can supplement their salaries through commissions
on advertising they sell. Breeze FM interacts
with its audience by holding open houses at
the station, reading letters from listeners,
and airing phone-in programs.
One participant offered USAID’s work in
Haiti as an example of a project that not only
emphasized economic sustainability, but
also endured amid political turmoil. When
the project began, 60 to 70 percent of the
country had no radio at all, and it seemed
impossible for media to make money. Rather
than involving individual stations that were
already viable, USAID’s media assistance
program worked to develop a network
of forty stations that cut news-gathering
costs and increased the revenue flow to all
stations. People in Haiti came to embrace the
media to the point that when the government
of Jean-Bertrand Aristide fell, supporters
of the radio network prevented the armed
forces from damaging the stations.
Attaining comprehensive sustainability is
possible only when donors are aware of
the strengths and weaknesses of the media
sector as a whole, participants said. The
best marketing skills, for
example, will not lead to
sustainability where media
lack a legal enabling environment, one participant
warned. “At the microeconomic level, in terms of
sustainability, I don’t see
how it could be achieved.
It will be a fish out of
water; we must create
the water. Sustainability is closely tied to
creating a functioning media center.”
Identifying Niches
Participants agreed that media sustainability
is a priority in all countries, regardless of the
level of development. One participant called
it a “misperception” that less-developed
economies do not have pockets of sustainable media.
During his presentation, Mark Whitehouse,
director of media development for International Research & Exchanges Board (IREX),
cited the potential for developing local news
offerings in North Africa. Anyone there
who can afford a satellite dish, he said, has
an “amazing choice on the surface” of panArab television, such as Al Jazeera and Al
Arabiya. National news is dominated by
state-subsidized broadcasters, while the
regional market is dominated by the slick
programming and sophisticated market
research of the pan-Arab satellite channels.
There is not much space for smaller stations
to move into the larger markets, but there is
a void in local news coverage. Whitehouse
said Al Jazeera only reported on local issues,
Attaining comprehensive
sustainability is possible
only when donors are
aware of the strengths and
weaknesses of the media
sector as a whole.16 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
when they had wider, regional significance.
As long as media are not crushed by media
law, the dearth of high-quality, local news
on the airwaves could mean potential for
media development in that market. But in
order to find and capture such niches, Whitehouse said, media must have the resources
to conduct audience and market research.
Currently, “donors aren’t willing to put up
money for that. Donors have to consider the
concept of research as an integral part of
sustainability—not just one-off studies but
throughout the life of a project.”
New media is another relatively undeveloped space where media assistance can
have a great impact. Less-developed and
developing countries have eagerly embraced
Web-based information, IP telephony, and
text messaging by cell
phone, giving them the
potential to leapfrog
Western nations in
terms of marrying
journalism with technology. Some participants suggested that in
addition to working
with traditional media,
media development
practitioners should
also consider encouraging alternate delivery
methods, perhaps by fueling the spread of
free and independent new media, which
can be less vulnerable to censorship and
official pressure. While some Americans
may consider the American media system
worthy of emulation, participants cautioned
that the American industry was not always a
useful model for other countries. Compared
with its foreign counterparts, “the newspaper
business in the United States is awful at innovation, because we have the belief that
whenever we try something new, it has to
be perfect and it takes a lot of money before
we do it,” one participant said. “While we
are all tempted to replicate our own system,
we need to recognize that the markets are
changing much faster than we want to
admit,” another working group member said.
An Alternative Model: The Case of
the Media Development Loan Fund
Participants considered funding mechanisms
other than grants, which could help media
become sustainable. One less traditional
mechanism for media support has been the
Media Development Loan Fund (MDLF),
a not-for-profit organization that provides
affordable capital to media companies.
Elena Popovic, MDLF’s general counsel,
described the fund to
the group and explained
that MDLF was started
by two journalists who
were “constantly critical
of the grants-oriented
approach” of media assistance and wanted to find
a more sustainable way of
assisting media.
While the working
group agreed that the
loan model has been
successful, Popovic pointed out that the
idea of providing loans to nascent media in
emerging markets had initially been met with
great skepticism. The skeptics were proved
wrong: in eleven years of work, the failure
rate for loan repayment has been less than
percent. In addition to careful selection
of clients, a key factor in the fund’s success
has been innovation. For some countries
where media loans are too risky, the fund has
branched out, offering guaranties, finance
Less-developed and
developing countries have
eagerly embraced Web-based
information, IP telephony,
and text messaging by cell
phone, giving them the
potential to leapfrog Western
nations in terms of marrying
journalism with technology. Center for International Media Assistance 17
CIMA Working Group Report: Economic Sustainability of the Media
leasing, and equity. MDLF also puts media
assistance within the reach of the general
public though its Free Press Investment
Notes.
MDLF has, however, found success to
be a double-edged sword. While MDLF
was successful in
raising funds for its
loan pool, the fund
found it increasingly difficult to
fundraise for its
administrative costs.
“The model is not
being rewarded, but
punished because
of how it works,”
Popovic told the
group. When MDLF appeals to potential
donors, it hears: “You are a business
model. You make money. Why should we
open our checkbook?” They do not understand that while MDLF is essentially a
bank for media development. Its dedication to affordable financing and business
training makes its operational costs much
higher than those of grant-making media
assistance institutions.
Although MDLF has
found other partners
for financial support,
George Soros’ Open
Society Institute is
one of few donors
who “understands
that in order to offer
subsidized funding to independent media,
the fund itself needs to be subsidized,”
Popovic said.
The working group was asked to consider
whether the loan model and other strategies successful in emerging democracies could be applied to less-developed
countries. Participants agreed that
media throughout developing and lessdeveloped economies have few financing
options besides grants and advertising.
Unlike many businesses, “media don’t
usually have a tangible asset for collateral,” Popovic said.
While microfinance
has been successful in
some of the most basic
economies, small loans
of $ 00 or $500 might
not be not enough to
purchase a printing
press or upgrade a
recording studio.
Some participants asked
if the MDLF model could be widely replicated with the same result beyond Central
and Eastern Europe, where a large part of
MDLF’s clients are based. One example
outside that region is the Botswana-based
Southern Africa Media Development
Fund. Known as Samdef, the for-profit
fund, worth $7 million, is the development
arm of the Media Institute of Southern
Africa. Samdef chief
executive officer Kate
Senye told the group
that her fund has “lots
of success stories,”
and said the loan
model must be regionally adapted. “Samdef
is the MDLF model
replicated in Southern African region, in a
different way,” she said. “When you come
to different environments, the models have
to change.”
Since its founding in 998, Samdef has
“created different models of investing in
While some Americans may
consider the American media
system worthy of emulation,
participants cautioned that
the American industry was
not always a useful model for
other countries.
Media throughout
developing and lessdeveloped economies have
few financing options besides
grants and advertising. 1 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
publishing houses, radio stations, televisions
stations,” Senye said, adding that commercial banks turn to Samdef when they want to
invest in media. Coordination has also been
crucial to Samdef’s success. “If donors want
to really make an impact in media development, in all these regions,” they must “force
coordination among these organizations.” Center for International Media Assistance 19
CIMA Working Group Report: Economic Sustainability of the Media
Private Support for Media Development
Presenter: Peter Graves,
Center for International Media Assistance
Moderator: Patrick Butler,
The Washington Post Company
One of CIMA’s objectives is to explore how
to increase the private sector’s involvement in media development. While the U.S.
government is the world’s largest donor for
media assistance, private
donors, such as the
Knight Foundation and
OSI, have greatly shaped
the field.
CIMA consultant Peter
Graves said estimates
compiled by CIMA
indicate that public and
private donors spend at least $ 20 million
each year supporting independent media
development, including journalism training
and education, media business development,
media law advocacy and institutional development, and programs using communications for other development purposes, such
as health education. This figure does not
include public diplomacy or Department of
Defense expenditures, which would raise the
amount significantly, Graves said.
Graves told the group that private non-profit
revenues grew by 57 percent from 994 to
2004, faster than U.S. gross domestic product
growth over that period. American private
assistance totals $95.2 billion, the bulk of
which consists of remittances sent by individuals to their home countries. He noted,
however, that “private sector giving goes
mostly to humanitarian relief and responding
to crises. Absent from the private sector is
any real ‘democracy development’ strategy,
as this has mostly been promoted by the
government.” He suggested that education,
advocacy, networking, and research were
needed to encourage more private giving for
media development.
After Graves’s presentation participants
discussed how to engage further the private
sector in media assistance.
Participants were asked
to consider: What are the
barriers to greater private
sector engagement? What
can private donors accomplish that public donors
cannot? Where are there
opportunities for greater
private sector involvement?
Obstacles to Private Sector
Support
Participants observed that while prominent
donors, such as the Bill and Melinda Gates
Foundation, have invested heavily in health,
poverty reduction, and education, they have
been more timid about delving into media
assistance. One expert said that when approached about making contributions, private
foundations worried that media assistance
might jeopardize international rapport. “The
first question they ask is if this will get them
crosswise with the government.”
The perceived political sensitivity of media
development projects inhibits more widespread private sector support, several participants said. The case for media development
The perceived political
sensitivity of media
development projects
inhibits more widespread
private sector support.20 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
has often been made as part of broader strategies for democratization, anti-corruption,
and good governance and accountability.
Media assistance may also provoke concern
and resistance from
foreign governments.
One implementer
described Morocco
as a country where
media development has
become more difficult
for Americans, especially since September
, 200 : “A lot of the work is viewed as part
of U.S. foreign policy, and tied to a negative
part of U.S. policy. . . . That limits us. Twoand-a-half years ago, I could meet with the
head of the journalists’ syndicate and talk
about joint projects. Now he’s the leading
voice arguing against U.S. assistance.”
On the domestic front, one obstacle is that
corporations contemplating involvement
in media development may worry about
making themselves vulnerable to accusations
of selfishly developing potential overseas
markets and not performing acts of social
responsibility. Additionally, as one implementer
pointed out, among
journalists and some
private sector experts,
“many—and rightly
so—can’t accept any
consulting money from
the U.S. government.” Technical assistance
might need to be strictly on a volunteer basis
if provided in cooperation with governmentfunded initiatives or coordinated by the
private sector and with private dollars.
Participants discussed whether the perception of media and press freedom as development work’s “third rail” could be countered
by downplaying the relationship between
press freedom and democratization. Strong media
are also important for
economic growth and the
delivery of information
on health and education.
For example, one participant mentioned Nobel
laureate and economist
Amartya Sen’s observation that famine has
never occurred in a democracy with a free
press; intimations of mass starvation are
impossible to hide where journalists freely
give voice to public criticism and warn of
impending crises.
Many participants spoke about how
problems of media development and media
freedom had been “pigeonholed” as an issue
of governance. One implementer argued
for “bringing media
development out of the
‘democracy ghetto.’”
As she explained,
“Media development has
been pigeonholed into
democracy assistance,
which makes it handsoff.” Another participant
agreed: “We need more
good ambassadors and
journalists who understand how important
outside the democracy
ghetto this is. If you just talk about freedom
of expression, [it sells] much better.”
Media development practitioners must
convince people outside the journalism and
democracy promotion fields that they also
Media development
practitioners must convince
people outside the
journalism and democracy
promotion fields that they
also have a responsibility
to promote free and
independent media.
Strong media are also
important for economic
growth and the delivery of
information on health and
education. Center for International Media Assistance 21
CIMA Working Group Report: Economic Sustainability of the Media
have a responsibility to promote free and independent media. “Media assistance should
be embedded more broadly. Media lacks
a distinctive identity among the assistance
community,” observed an expert on democratization. One participant who has worked
with USAID noted: “Media has an information aspect and an
economic growth aspect.
Media that has advertising brings together
buyers and sellers. That
promotes growth. In
the early 990s, we
were trying to convince
USAID that there was
a sector-level problem with Russian media.
USAID said, ‘We don’t do that, it’s media.’
Others said, ‘That’s sector development.’”
“Maybe calling this ‘independent media development’ is the wrong thing to do,” a journalist said. “There may be a reason why they
don’t line item ‘media development.’ [Where
I work], that’s the last thing that we’d say.”
How to Approach the Private
Sector
Many participants were optimistic that
skittish media companies’ fears could be
assuaged if the media development sector
could make a good case for itself. One
participant suggested demonstrating to
private foundations that media development
“is about humanitarian response. Talking
to them from that perspective—socially
powerful, entrepreneurial—it resonates
more.” “When corporations hear wellformed cases about what is needed and why,
they buy into the idea,” said a news industry
veteran. Another agreed that advocacy to
the private sector was important, but argued
against downplaying the power of the media:
“We have to make the big case, rather than
narrow down and diminish the importance
by speaking their language.”
One participant said the media development community should figure out how to
provide donors with “instant gratification.”
In philanthropy, many
charities can say, “With
this dollar, you will
save one child.” Media
development needs “a
yardstick that is understandable to package
our cause. For example,
we could say, ‘With this
dollar, you can bring information on HIV/
AIDS to ten more people.’”
Another approach would be to broaden
potential donors’ awareness of how media
is integral to their own philanthropic
causes. Many programs already include a
media component, utilizing newspapers,
soap operas, or radio programs, to deliver
messages and change behavior in areas
such as safe sex, schooling, and sanitation.
Information campaigns could be even more
effective when media are credible and have
a wide audience. “When you go to funders,
make them understand that without proper
media outlets, you can’t get your messages
across.” But many participants said that the
media development community must first
gather good research for its case. “All these
foundations are kind of linked to each other,
so if we disappoint one, the rest might not be
interested,” said one participant.
Awareness of Volunteer
Opportunities
Opportunities for American businesses
to contribute to media assistance are not
The media development
community should figure out
how to provide donors with
“instant gratification.” 22 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
limited to financial giving. Many participants enthusiastically backed the idea of
promoting exchanges for journalists and
sending trainers overseas. While media in
the United States, struggling through their
own period of downsizing and upheaval,
may find it difficult to justify writing a big
check for media development abroad, they
may be more receptive to sending experts to
help, several participants said.
Although a number of groups, including
media development implementers IREX,
Internews, and the International Center
for Journalists, already facilitate some
exchanges, many participants supported
sending more “swat
teams” abroad. These
teams, drawn from
newspapers, broadcast
networks, magazines,
and retired journalists, would advise pro
bono on management,
editing, and advertising. “I think lots of
people in our business
would be very interested in this sort of team
approach,” one prominent journalist said.
“Once we have an idea that’s well formed, I
think this is a relatively simple matter to get
lots of media companies involved like this.”
There was widespread agreement among
the participants that while piecemeal,
“parachute” training is less effective than
long-term sustained training, serious volunteerism “must stay on the agenda.” Whether
sabbaticals for media titans or exchanges
among newsroom staff, there is enormous
potential for American journalists to share
their skills and talents with their counterparts in China, Cambodia, Vietnam, and
other countries where journalism is struggling. Journalism executives, past and
present, said: “It would be a great benefit
in lots of big media companies” and “you
would find people clamoring to get on these
teams.”
Some participants said more widespread
engagement in media assistance was not due
to the private sector’s lack of interest but
because of the limited information on how to
help. “We need to know where to go, where
there is fertile ground,” urged one longtime
journalist. “If you asked me right now where
to go, I wouldn’t have a clue.”
While there was broad
agreement on the need
for greater coordination,
finding an institution to
tackle the task of orchestrating cooperation is a
major challenge. Several
suggested that CIMA
might be suited to take
on that role. “CIMA can
make a great contribution in terms of coordination for institutions
working on different aspects of media assistance,” one participant said. “CIMA can play
the role of reaching out,” another suggested,
adding that one radio station owner he
talked to “didn’t have enough well-trained
people for the business side. The role we can
play … is to connect those two dots.”
Boosting Business Journalism
Participants suggested that private donors
had more windows of opportunity available
than public donors. In China, the argument
that active media spur economic growth
could lead to a major breakthrough in media
More widespread
engagement in media
assistance was not due to
the private sector’s lack of
interest but because of the
limited information on how
to help. Center for International Media Assistance 23
CIMA Working Group Report: Economic Sustainability of the Media
development. The Communist government
already gives business periodicals more
leeway than other media because of their
limited circulation. The information in them
seldom makes the leap to radio and TV.
Officials know that China cannot compete
in “global markets without real-time information. Business reporting becomes a
Trojan horse for greater transparency,” said
one participant with extensive experience in
East Asia. Another agreed, adding: “China
has already recognized media as an underperforming sector of the economy. If you’re
talking to China, you can talk to them on
that basis, that if you got to the same level of
performance as in the U.S., it would contribute to the GDP. They get that argument.”24 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
Moderator: Jerry Hyman, Center for
International and Strategic Studies
Participants agreed the media development community needed to address two
main questions. First, how we can better
promote media development and thinking
about media as a sector? Second, how do we
engage other foundations and international
organizations in media assistance?
On the first issue, media assistance donors
and practitioners must advocate independent
media as an end as well as a means. They
must also emphasize that freedom of speech
and freedom of information are important
basic rights. Those in the media development sector must also find better ways of
articulating that free and independent media
are critical for health and social development, as well as for economic growth, and
not just for democracy.
One participant pointed out that the group’s
general prescription for better economic
sustainability of the media—better coordination, wider education and advocacy, more
evaluation, and increased networking—
could apply to many areas within media assistance, including media law or professional
journalism training.
The group specifically advised:
n Encourage media to be consumercentric. Implementers should teach
media owners how to lure new advertisers and donors should build market
research and audience surveys into
media assistance. Media will not be able
to attract advertising revenue unless the
news content is relevant to the audience.
n Be reasonable about the degree to
which sustainability can be achieved.
Donors should be aware that programs
geared only toward full sustainability are
a vain exercise in countries with inhospitable legal and economic environments
for media. Donors should encourage
media to become profitable, while remembering that good journalism has a
public service function.
n Teach media owners business skills.
While implementers should continue
training journalists in reporting, they
should also teach media owners management and financial skills.
n Tailor media development to local
needs. Donors and implementers should
base their assistance on current, local
needs. There is no effective one-sizefits-all model for media development.
To thrive, a media operation must grow
local roots and be operated by indigenous journalists.
n Include capacity building in all
programs. Implementers should teach
journalists how to identify and cover
important issues, rather than telling them
what to report. Social messaging, paid
programming, and message advocacy do
not help media companies become selfsustaining.
n Give media sustained, long-term
support. Donors should try to provide
longer-term support and coordinate
efforts with each other to sustain
projects. The U.S. government and other
donors are sometimes too focused on
producing big and immediate results,
Recommendations Center for International Media Assistance 2
CIMA Working Group Report: Economic Sustainability of the Media
while neglecting strategies for sustaining
them. Even the best media organizations
can be killed if funding is cut off too
abruptly for them to adapt.
n Search for niches ripe for sustainability. Even in the harshest economic
conditions, donors should assess local
conditions to help local media find
niches with high potential for sustainable
media. At the same time, donors should
avoid distorting nascent media markets
and crowding out existing private, independent media.
n Explore new approaches for assistance. Donors should consider new
media and alternative delivery methods.
This strategy would be particularly
useful in regions where the media are
dominated by the state or struggle under
an oppressive legal environment.
n Create mechanisms for coordination. Donors, implementers, and others
concerned about media development
should support the creation of a network
to help private sector donors share
reports, information, and strategies.
n Make the case for media beyond democratization. Implementers should
appeal to potential donors by explaining
the importance of the media in terms of
social and economic development. Free
and independent media are unquestionably crucial for the proper functioning of
democratic institutions, but the argument
that media development and healthy
media are crucial for solving humanitarian problems might be more compelling
to donors, especially those in the private
sector.
n Increase the private sector’s
awareness of media assistance and
how to help. Donors, implementers,
and others in media development should
take their case to the private sector.
American media companies might be
willing to contribute, whether financially
or through exchanges and technical assistance, but they will remain unaware of
how they can help unless implementers
and others on the ground provide information about international opportunities
and needs.26 Center for International Media Assistance
CIMA Working Group Report: Economic Sustainability of the Media
No comments:
Post a Comment