Media sustainability calls for mergers and strategic investment

Wednesday October 4 2017

There is no reason to believe media trend won’t continue unless something is done.  ILLUSTRATION | JOHN NYANGAH

Listening to discussions about the economic status of the media, there is no reason to believe this trend won’t continue unless something is done. ILLUSTRATION | JOHN NYANGAH 

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Debate has been raging on how to ensure media sustainability in the country after the closure of Royal Television a week ago due to what they termed financial difficulties.

This came on the heels of the closure of KFM radio after what management called the reorganisation of their operations. Also, reports of struggling media outlets abound. This has led to loss of jobs and hampered the country’s capacity to develop a truly consequential media voice in the region.

Of course, the debate on how to make media sustainable is not new. Several talks on the subject have been held in the country. There have also been reports on how the media is struggling, with some closing shop while others open.

What is new is that for the first time two electronic media outlets, both owned by organisations perceived to have financial muscle and professional managers, closed down.

Listening to discussions about the economic status of the media, there is no reason to believe this trend won’t continue unless something is done.

So, how can media be more profitable and sustainable?

It is prudent to first diagnose the disease before delving into possible remedies.

In my view, any remedy will have to be informed by five factors:

First,running a media house as a profitable business is a recent import in the country! It emerged after the 2002 media law, which liberalised the sector leading to the opening of commercial and community media outlets.

Prior to that, what existed was political and faith-based media.

Secondly,the media market is still small; both in terms of advertising as well as demand driven (paid) consumption of content.

Thirdly, there is increasing reduction of advertising revenue from government as it now publishes most of them on its website.

Fourth, there are many media outlets competing in this small market. With over 30 radio stations, over 10 television stations; 40 struggling print and 80 web-based media, it’s difficult to compete and make a profit.

Finally, technology has not only redefined how news and information is accessed and consumed but also makes traditional media’s funding model obsolete.

The good news is that regardless of where technology takes us, three things will always remain true: People will always need news and information; good content will always sell and such content will always be a form of soft power.

Sustainable media

This means that any media that provides such content will remain profitable and sustainable. And for media in Rwanda to be sustainable, there are certain things the government can do and others for media owners to do.

First, there is a need to change the current funding model. That is, while it is government policy to ensure the public broadcaster (RBA) becomes financially independent by raising its own revenues, it is better to leave the market to private operators.

This will ease pressure, bring in more money for media owners while allowing RBA to serve the public without being swayed by business interests.

Second, the much talked about establishment of a “Media Development Fund” should only be for content creation with media owners openly competing for the funds.

Third, access to the broader advertising market needs to be made truly apolitical to allow media outlets to develop diverse and consequential content.

Fourth, for the sake of media sustainability, the government should reconsider its policy of reducing expenditure on advertising in the media.

Fifth, incentives like removal of VAT on media products and taxes on things like paper and media machinery can be removed for a period of say ten years.

Finally, there is a need for mergers between some of the media outlets. While this is not easy, it is possible between like-minded media owners who are driven by profit but guided by laws.

In practice, this means, different media owners pulling resources together, forming viable companies and recruiting professional managers and editors; with the former raising funds and the latter running newsrooms to produce great content.

Christopher Kayumba, PhD. Senior Lecturer, School of Journalism and Communication, UR; Lead consultant, MGC Consult International Ltd. E-mail: [email protected]; twitter account: @Ckayumba