Emma Beavon highlights three business models for the media industry to consider adopting in order to prevent losing any more journalists.
Journalists in South Africa, and around the world, are well aware that their industry is in crisis due to the alarming amount of journalists who are being retrenched every day. These retrenchments are the media industry’s quick fix for losses in income and the move towards digital.
The current circumstance of South African media outlets
In South Africa, there have been around 5 000 journalists retrenched in just 10 years
. This has essentially cut the workforce in half, leading publishers to cite tough financial times for the retrenchments and shifting the blame to online news consumption.
In 2015, The South African Press Association laid off 40 staff members when it closed down
. Other publications that have since closed down include The Time, HuffPost SA, ANN7 and The New Age.
2015 also saw the Mail and Guardian
reduce its editorial team of 60 to 25 staff members. In the same year, TV news broadcaster eNCA cut its staff down, and then a year later, announced plans to further downsize its Cape Town office. Independent Media group, a print and online publication, retrenched employees in 2015, and in 2016 announced the retrenchment of a further 70 of its journalists.
In 2018, it announced it would conduct another round of job cuts within the company.
In 2018, the biggest employer of journalists in the country, the South African Broadcasting Commission, planned to retrench 981 employees
. As of today, the retrenchments have not happened and are pending a skills audit at the broadcaster.
And at the end of November 2019, EE Publishers will be closing after more than 25 years of business
Time for a change in business models
It is clear with these retrenchments that the traditional media business models are no longer effective in this digital age.
Here are three business models media outlets should consider changing to:
1. Subscription model
Gone are the days where media outlets can rely purely on traditional methods to bring in money. Subscription models are when customers must pay a recurring fee at regular intervals for access to a pool of content. Customers then have the option to opt out of the subscription.
Media outlets need to create content users will essentially pay for. Therefore, bad content means no subscriptions.
There are a number of different paywall models to choose from:
- Freemium paywall:This paywall model combines free and premium content. The publisher provides free access to their everyday content but puts premium content behind a paywall. This means publishers control what goes behind a paywall and how much of their content will make it onto their homepage.
- Metered paywall: This is when all the content on the website is behind a paywall but the publisher is able to set rules that determine the amount of content a free user can read before they reach the paywall.
- Hard paywall: All content on the website is locked and the user can usually only see the title of the article and a few introductory paragraphs before hitting the paywall.
Media outlets need to decide which subscription model works best for them and their content.
2. Social media model
Media outlets need to remember that we, as a society, are social beings, and the rise of social media has moved that need for social interaction online.
The companies that flourish in today's digital culture provide more than just valuable content to people — they create a community
. These connections turn into money as people of the community they have created trust their content and will, therefore, be more willing to pay for it.
Facebook, Twitter, Instagram and LinkedIn are icons of the social economy. Many businesses have begun to thrive because of their move to social media, a move that many media outlets should seriously consider. Just being on social media is not enough if you want to create a community — you need to actively post and engage with your audience.
To really be successful with this model, media outlets need to think of themselves as a vehicle to gather, support and empower people to create a lasting community, and not primarily as creators of news that people will consume.
Just being on social media is not enough if you want to create a community — you need to actively post and engage with your audience.
3. Donor funding model
The traditional advertising-heavy funding model for the media has been steadily plummeting over the years, and continues to do so even today. For this reason, media outlets need to find a way to bring in money to compensate for the loss in income that would be coming in through the advertising model.
Donor funding is when news outlets rely on donors to contribute money to their company in order to keep them running. This business model is currently being utilised by the Daily Maverick and Mail and Guardian
This donor model means that journalists don’t have to rely on sales to support them and it is a model that has been successfully utilised by non-profit media outlets for years.
In order for media outlets to increase their donor funding, they need to ensure that all their content is valuable as many companies donate money to media outlets as part of their corporate responsibility.
This model has, however, been brought into question as media outlets could be swayed to cover stories from a certain angle due to their donor’s interests or beliefs, out of fear of losing them.
However, millenials are the most likely group of people to donate to charities and media outlets
; therefore, donors don’t always have to be big companies and can instead be people who read your content. Although readers won’t donate as much as a company, it is a way to get around the debate of objectivity when donors are involved.
Keep in mind that none of these business models are a guarantee for success, but when making use of a hybrid model comprised of two or more business models, media outlets are more likely to have more success. What other business models do you think media outlets should consider? Let us know in the comments section below.
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*Image courtesy of Vecteezy