Income Models of Independent Media in Difficult Contexts

"Struggling to survive, media and media support organisations alike are trying to discover and share trends, tips and tricks that can support media in developing their business models."

This research explores income models of media operating in difficult contexts, focusing in particular on which environmental factors, such as the income level of audiences and the country's press freedom level, and characteristics of media outlets influence these income models. The goal of this research report, which is published by Free Press Unlimited, is to support independent media working in challenging environments in their efforts to strengthen their business models.

As stated in the report, "Among the many publications about media business models, a large majority discusses media operating in the economically developed, and often relatively free parts of the world." This study, on the other hand, consists of data collected by interviewing media from more challenging economic or political environments in order to identify trends and lessons that can be used to support media operating in similar contexts.

The findings are based on semi-structured interviews with more than 80 media managers from approximately 40 countries around the world. The focus was in particular on independent, small- to medium-sized public interest media. When investigating the environmental factors that influence the development of a medium's business model (and the diverse revenue streams they would tap into), the study determined the economic state of a country using the World Bank's categorisation of income levels and the World Press Freedom Index to determine the level of press freedom. Characteristics that could influence a medium's business model included: type of media (radio, digital, print or television), age of medium (from start-ups to mature media) and size of media (based on annual budget and number of staff). In addition to analysing which environmental factors and characteristics influenced their income model, the research looked at how media managers perceived their level of success and financial stability.

The following are some of the main findings as summarised in the report:

"Diversification with age - The media in this research are in a constant process of diversifying their revenue streams. Generally speaking, the longer a medium exists, the more income streams a medium has. This shows that diversification of income models takes time and patience.

Donor funding remains important - Donor funding is a very important source of income, even within diversified income models. Media that do not receive any donor funding are generally either start-ups (less than two years old) or solid, long standing media houses (founded more than 20 years ago) that have a print edition or also broadcast on television.

Most media generate advertisement income - Advertisement income is also still a very important source of income; a large majority of the media generate some income through advertisement. Even though digital advertising generates much less revenue than print advertisement once did, advertisement income is still a welcome contribution to the annual budget of media.

Reader revenue in diversified models - Reader revenue is an important upcoming revenue stream in many contexts. However, it hardly ever is the first source of revenue, and generally becomes part of already diversified income models (three revenue streams or more).

Media in challenging contexts are fragile - Across all the challenging contexts, media struggle to sustain themselves financially. In low income countries, and countries with a very bad press freedom status, growth or income diversification are not easy - almost impossible - to accomplish.

Reputation and stability are important - Media themselves generally do not link their financial well-being to the diversification of revenue streams. Rather, they value stable and diverse partnerships (with funders) and a trusted relationship with their audience. Success of media is often attributed to a break out moment (such as a prize or a story that went viral) or the quality of the content. Specifically, reputation and visibility are considered very important to a solid medium.

Digital-only media are more confident - Digital-only media appear to be more robust than other media types; they assess their own financial status more positively in comparison to other media. This seems to indicate that print media and (community) radio, even those with parallel digital channels, are (unsurprisingly) struggling more. From a media development perspective, this is a great concern since in many contexts audiences can simply not be reached through digital channels (only)."

Overall, the research findings show that, "across the board, media will be in need for grant funding, as well as support for business model development. Even media in the comparatively less challenging environments will need to continuously update their business models. A lot of flexibility and resilience is required to survive while developing a diversified income model over the course of many years, a long period for which continued grant funding is very often required. Even the media who consider themselves doing financially relatively well, or better than before, indicate that it remains complex and difficult to generate sufficient revenue. Well-off media can be easily disrupted when one larger partnership ends or the country’s economy or press freedom status takes a step back. Providing core funding would allow media to continue their operations as well as appropriating resources to business management."