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September 21, 2020updated 30 Sep 2022 9:35am

Media in developing countries helped to diversify after ad revenue ‘destruction’ of up to 85%

By Charlotte Tobitt

Reputable media organisations outside the G20 are being offered support to transition to a subscription-based business model after the potential “extinction event” of Covid-19 slashed their ad revenues by up to 85%.

Media development non-profit Internews has bought news consultancy firm Newsgain after deciding at this “critical moment for news media” it needed to play a bigger role in helping media businesses around the world become financially sustainable.

Newsgain co-founder Jason Lambert, who joined Internews as senior director of media business, told Press Gazette that media organisations in the UK and US have seen ad revenue drop by between 30% and 50%, but that this “destruction” is as high as 85% in countries where Newsgain works.

“So while we still recognise that advertising’s part of the mix, we also strongly advocate that outlets can transition to some sources of consumer revenue as soon as possible and of course diversify their income so they’re not entirely dependent on single sources,” he said.

Lambert added: “Even before Covid the destruction of ad revenue was a slow-motion disaster but Covid-19 has just sped that up. The things we were expecting to take place over maybe the next couple of years happened overnight and that’s forced organisations to think really hard about their structures, their size, to re-size or right-size their teams.

“Some organisations are using this gratuitously but others are doing it simply out of necessity to make sure they get their cost base in line with what their current and future revenues are going to be. So we certainly see Covid-19 as being an accelerant for an existing problem.”

Lambert said the likes of the Guardian, New York Times and the Washington Post, which have developed successful reader revenue models, are established brands with the tools and expertise to do this in a nuanced way.

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“If we’re talking about a strong, independent news outlet in a developing country they don’t have access to any of this stuff in the same way,” he said.

“It’s very hard for them to activate these kinds of consumer revenues in the same way that a western media company can do.”

Lambert urged large UK media companies to share their successes with organisations like Internews so it can adapt the tools, methods and technologies for media in developing countries.

For example, Newsgain’s work with one media organisation in Central America recognised that although it had 5,000 subscribers there was potential for 30,000 within two years, leading it to help the team formulate a strategy to reach that point including through branding, pricing levels and marketing.

Internews president and chief executive Jeanne Bourgault said: “As media face the potential ‘extinction event’ of Covid-19, we’re more focused than ever on innovative strategies to help independent, local media not only survive but thrive in the digital economy.

“As we work to build healthy information environments for communities around the world, the in-house skills and expertise of Newsgain will be invaluable to our partners.”

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