An operating model describes how a business operates. This includes the organisational structure, the capacity, roles and responsibilities of staff members, the work processes and work flows, and the organisational culture. Below there is an outline of the few things we do know about how operating models influence media viability.
Business Skills & Culture of Innovation
Research reveals that most media, as a consequence of the idealism on which they are founded, have mainly journalistic staff and in effect are heavily focused on content. The problem with this is – in the words of Nishant Lalwani of Luminate – that ‘great (…) journalists may not be great entrepeneurs. You need both editorial and business talent and a comparative advantage to be a successful independent organisation.’[1] A large study conducted by WAN-IFRA also confirms that there appears to be no relationship between the quality of content and the success of a business model.[2] In the report, reference is made to the fact that “unlike the political, social, educational, or judicial sectors of society, which are essential for good governance and development, but mainly funded from fiscal revenues, the independent media sector carries out its public interest role at the same time as responding to commercial imperatives.”[3]
In fact, studies about these public interest media organisations around the world are unanimous about one main finding: financially struggling media generally lack business skills.[4] Few of these studies however, pinpoint exactly which business skills are considered vital. It appears that most literature points to the indispensibility of ‘business thinking’ or ‘entrepeneurial spirit’ – which includes the space for innovation within a media business. Also, researchers agree that a medium should have a balanced team with different roles, as indicated by Nishant Lalwani’s quote above.[5] There are some studies that identify a correlation between a specific position in an organisation and increased revenue: by adding a marketing and/or sales person.[6] The Inflection Point report confirms this in more general terms, stating that ‘adding one person focused on driving revenue can make a significant difference on the bottom line’.[7]
Obstacles
Business skills and innovation culture do not, however, tell the full story. There are a few factors that can form an obstacle to having the right business skills, or to develop a culture of innovation. A few common factors are highlighted below – and tend to affect media operating in difficult contexts more. The reason for this is that, generally speaking, these media are struggling to bring reliable information to people in a way that is safe for both the audience and the media workers. This struggle is what occupies most of the daily work of the media, rather than business development or institutionalisation.
Safety Considerations
Safety is a basic need for independent media. Not only does the lack of safety impedes the core task of journalism – bring reliable news – it also distracts the media business from opportunities to grow and innovate. You can read all about the safety of journalists in the Safety Resource Guide.
Lack of Professionalisation or Institutionalisation
Formal processes and structures are – to are certain extent – a necessity to allow for the growth and continuity of any business.[8] However, both the lack of certain skills and the challenges posed by the environment (described above) can make it difficult for media to enter the stage of professionalisation. Sometimes, this can have an effect on receiving donor funding, for example if a media business lacks a legal registration or has difficulty obtaining a positive audit report. As such, the lack of institutionalisation in a media business can also form an obstacle to taking the next step towards developing or innovating the business model.
Gender Inequality
Research shows that business with a diverse workforce perform better. There are various reasons for this: a variety of viewpoints, access to various sources of information, and access to a wider audience.[9] For more information on how to improve gender equality in the work place, please consult this page in the Gender in the Media resource guide.
Footnotes
[1] Schiffrin, A., Fighting for Survival: Media Startups in the Global South[2] This does not mean that quality content is not important. Often, audiences value the quality of media content. Thus, while quality content might not be an indicator for the success of a business model, it is an indicator for the ability to attract and maintain audiences.
[3] Milosevic, M., Financially Viable Media in Emerging and Developing Markets (WAN-IFRA)
[4] Nisbet M., Wihbey J., Kristiansen S., and A. Bajak. (2018). Funding the News: Foundations and Non-Profit Media. Shorenstein Centre on Media, Politics and Public Policy.
[5] Bittner, A. (2019). Digital Journalism and New Business Models. European Federation of Journalists.
[6] Schiffrin, A.
[7] Ramos D., Melendez J., Aroche E., Jaramillo M., Ludtke S., & M. Alvarez. (2018). Inflection Point. Impact, Threats and Sustainability: A Study of Latin American Media Entrepeneurs. SembraMedia.
[8] See Botha, F., How To Use The Business Lifecycle To Professionalize Your Family Office (Forbes)
[9] See Badal, S., The Business Benefits of Gender Diversity (Gallup)