Inflection Point International: A Study of the Impact, Innovation, Threats, and Sustainability of Digital Media Entrepreneurs in Latin America, Southeast Asia, and Africa

"From Abuja to Accra, from Manaus to Manila, digital native media are building new kinds of news organizations, informing underserved communities, and covering stories often neglected by others."

The Inflection Point International report, published by SembraMedia in partnership with Luminate, shares the findings and recommendations of a research project into the state of digital native media in Latin America, Southeast Asia, and Africa. The publishers hope the insights, recommendations, and best practices shared in the report will empower media leaders, funders, academics, and others to more effectively support digital media to grow, innovate, and ultimately better inform their communities in ways that strengthen their democracies.

In light of the COVID-19 pandemic, the research sought to find out how independent digital native media had been affected, but also what had changed since the first Inflection Point study in 2016. In the first study, SembraMedia interviewed 100 digital native media entrepreneurs in Argentina, Brazil, Colombia, and Mexico. For the latest report, in addition to conducting 100 interviews in those same four countries in Latin America, they added eight more countries, interviewing media leaders from 49 digital media organisations in Africa (from Ghana, Kenya, Nigeria, and South Africa) and 52 in Southeast Asia (from Indonesia, Philippines, Malaysia, and Thailand).

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

All media included in the study were born online and distribute their content primarily through digital channels. To be included, they had to produce original news content (not just aggregate news from others) and provide some kind of public service. Researchers sought out media organisations that were transparent, nonpartisan, and not overly dependent on government support as they strive to reach financial independence. They also had to have been publishing for a minimum of six months at the beginning of 2021, when the research began.

As explained in the report, some of the projects featured in this study are well known to journalism organisations, foundations, and media investors. They include award-winning news sites such as Argentina's Chequeado in Latin America, the Daily Maverick in South Africa, and Malaysiakini in Southeast Asia. Many of the digital media in the study have produced stories that reportedly had significant real-world repercussions, from protecting endangered species, to championing gender equality, to forcing corrupt government officials to resign.

Overall, the report shows that digital media entrepreneurs are producing what is described here as groundbreaking journalism despite often tiny budgets and online threats and attacks. In spite of challenging circumstances, these outlets continue to make an impact, ensuring that stories are told and democratic dialogue is protected.

More specifically, the report highlights the following findings:

• Digital media organisations are working under a barrage of threats and attacks - As online news operators, digital media face unique challenges as start-ups. Across all three regions, 51% of the media organisations in this study said they were the victim of digital attacks, and 40% said they had been threatened due to their work - often on a weekly if not daily basis.
• Revenue generation has not been a major problem - The majority of the 200+ digital native media did not suffer the huge financial losses reported by traditional media players. Analysis of the findings suggests that this is primarily because they are not overly dependent on advertising, and because grant funding for media actually increased in 2020. Across all of the media in all three regions in this study, the top revenue categories were grants, advertising, consulting services, content services, and reader revenue, in that order, for both the 2016 and the most recent study. When comparing how many sources each media had and how that affected their annual revenue, the research found that more is not always better, and two to six revenue sources was optimal.
• Teams with diverse skills earn more - Across all three regions, findings showed the positive impact of adding at least one dedicated sales or business development person to their teams. Those who reported having a paid sales person on staff earned six to nine times more revenue in 2019 than those who did not.
• There are high numbers of women and minority founders - The study found that 32% of all the founders of the 201 companies studied were women, although the numbers varied by region and were significantly lower in Africa. Researchers also found that 25% said at least one of their founders represented a minority community in their country: nearly 30% in Latin America, 25% in Southeast Asia, and 20% in Africa.

Based on the findings, the report offers recommendations for media leaders and future media founders, as well as investors, foundations, and universities and training institutions. For example, for media leaders who are launching or working to build a digital news organisation, the report recommends they build a team that includes people with business, sales, accounting, and tech experience, in addition to the journalists and editors. They should also diversify their revenue sources but not take on too much at once, and they should apply for grants but at the same time not become overly reliant on donor support.

In relation to media funders, the report makes the point that building sustainable media organisations takes time, and cutting funding too abruptly can have devastating effects. Its recommendation to funders who are considering cutting or reducing grants, especially after years of significant support, is to notify these media organisations at least a year in advance and to consider providing extra money in a final grant to help them build economic independence.

For technology companies such as Google, Facebook, Twitter, and other tech platforms, the report offers two recommendations: First, develop better ways for journalists and media leaders to get their profiles verified; second, and perhaps more urgently, create a clear process for media of all sizes to appeal content take-downs so that they can get their journalism back online quickly when information is removed or profiles are shut down.

For universities and others who provide training, the report recommends they expand journalism curricula and training programmes to include business, management, and tech skills for journalism entrepreneurs. Training for journalists and media leaders should also include the ability to systematically track the impact of their work to improve their ability to recruit and retain talent, build audience engagement, and strengthen marketing campaigns and grant applications.

Click here to download the English version of this 160-page report in PDF format.
Click here to download the Spanish version of this 170-page report in PDF format.
Click here to download the Portuguese version of this 171-page report in PDF format.
Click here to access this report online in English.
Click here to download executive summaries of the report in Thai, Indonesian, Filipino, Malay, Tamil, Vietnamese, Sepedi, Afrikaans, Zulu, Swahili, French, and Hausa.