The bad news headlines may be true but the good news is often overlooked
Last month, journalists and readers learned of the sudden closure of New Frame, a publication with a pro-working class bent that promised a much-needed change in direction from what many media organisations had got used to.
The desire to disrupt the media industry is by no means novel and might, in fact, be a prerequisite for those gambling on an enterprise notorious for inflicting heartbreak on its investors.
Consider the Mail & Guardian’s first editorial. In 1985, the journalists who started what was then the Weekly Mail, put on the streets by the closures of the Rand Daily Mail and the Sunday Express, “felt that it was time we made sure our journalism was no longer dictated by interests outside of journalism. We were tired of being at their mercy.”
In order to fulfil its promise of chasing quality, not clicks, New Frame, like all media organisations, needed money — and a lot of it. Like a number of other very successful publications before it, New Frame was bankrolled by a donor.
The donor-funded model has become a lodestar for publications hoping to survive the treacherous waters of the South African media industry. But, as the New Frame example has demonstrated, all funding comes with risks.
‘At their mercy’
The New Frame’s controversial last editorial conceded as much: “Donor funding can be invaluable, but it cannot be a sustainable solution. It can incubate a moment, or perhaps build a bridge, but it cannot build institutions that will see out generations.”
Donor funding has supported some of South Africa’s most important media outfits, including investigative journalists amaBhungane and health news site Bhekisisa. As journalist and researcher Reg Rumney has pointed out, when other publications faced an existential crisis amid Covid-19’s economic onslaught, donor-funded organisations seemed unaffected.
This type of funding has proved an attractive model in South Africa and elsewhere on the continent, especially as advertising, which has sustained mainstream journalism for some 170 years, has become more fickle. A 2019 report by the American Centre for International Media Assistance concluded that about $600-million a year is spent on media development in Africa by state and private funders.
Today, the M&G — which was started by journalists who pooled their redundancy cheques and who went about selling 100 shares of R1 000 each to various prominent liberals — is now owned by the Media Development Investment Fund, a New York-based non-profit. The fund acquired a majority stake in M&G in 2017 after its former owner Trevor Ncube said he was no longer in a position to invest in the newspaper.
But, unlike its not-for-profit peers, the M&G still relies on advertising and other revenue sources to pay its bills.
Media expert Paula Fray noted that vital parts of South Africa’s independent media (like health, in the case of Bhekisisa) are donor funded. “And that is good, because those are critical things for us to look at but they also cost a lot to do properly,” she added.
But, Fray pointed out, donor funding does not always come without strings. “The danger, of course, is that you are very often beholden to donors and donor agendas for the coverage of these very critical issues,” she said.
“So, there is this balance between yes, we need donor-funded journalism — make no mistake — but, on the other hand, unless we find sustainable business models for the practice of day-to-day journalism, we are going to find our journalism skewed towards the coverage of issues that donors are prepared to fund.”
‘Pulling the plug’
Rumney agreed there are risks to the donor-funding model. “One of which is the dominant funder pulling the plug. And the other risk is the dominant funder influencing the direction of the editorial. The owner might not respect the Chinese wall and interfere with editorial … All publications are ideological but there has to be some degree of editorial independence.”
Reports following New Frame’s closure have aired claims that the publication’s funder, US businessman and social activist Roy Singham, used it to forward his own ideological agenda, indirectly preventing journalists from covering certain subjects while prioritising others. These allegations have been denied by the publication’s editor-in-chief Richard Pithouse.
Analysts are united in their view that relying on a single funder, like Singham, the founder and former chairman of IT consulting company ThoughtWorks, to back a media outfit only puts it at risk of sudden financial collapse.
“For me, the sad thing about the closure of the New Frame is that very often social justice issues are not necessarily in and of themselves attractive to donors,” Fray added.
“They are normally attached to a theme or a specific purpose. So, having an organisation that really looked at social justice issues was really encouraging. Because it is sometimes hard to build a business model around covering issues like that.”
‘Charity is not a business model’
In the aftermath of New Frame’s collapse, what has become clear is that its leaders leaned on what was a very rickety business model. The news site’s far too costly operations were not matched by its impact — some measure of which is usually required by funders. “Charity is not a business model,” Rumney said.
According to Pithouse, New Frame cost R122-million for the four years it operated. Taking the news start-up’s total annual budget and dividing it by the number of articles published in a year puts the cost of each article at about R20 000 to produce.
The big expenses, Pithouse said, were salaries and freelancer costs, with transport also being a significant cost.
Although he could not disclose the average salary at New Frame, Pithouse noted that the publication kept a relatively flat pay structure, with junior staff earning quite a bit more than industry standards. A handful of freelancers were earning R7 a word for their articles, while most were paid R5 a word.
According to the Southern African Freelancers’ Association, the average amount freelancers writing for newspapers were paid a word was R3.40 last year. The M&G currently pays a standard rate of R3.50 a word.
Pithouse said the New Frame wanted to make journalism a viable career for people and to avoid exploitation. The publication “supported a large network of freelancers for close to four years, paying people decently and engaging seriously with their work”, he added.
To put the R122-million figure into perspective, amaBhungane’s annual financial statements show that over the last four reporting years, its operating expenses amounted to R37.6-million. Over that same period, donor-funded social justice publication GroundUp spent R21.8-million.
Unlike New Frame, amaBhungane, Bhekisisa and GroundUp started as part of other organisations before going on their own. Not only did this allow them to find their feet financially, but to build public trust and an audience over many years, making them more attractive investments for donors.
“We aimed to do work of real quality, and often got close to where we were aiming. I had hoped and thought that the quality of the work that we were doing would be valued by a range of funders, but our costs were very, very high … and our readership numbers were very low,” Pithouse said.
“It was a profound shock for everyone when the news came but I have to admit that we are not in a strong position to make a case to funders given our high costs and small audience.”
‘The bigger danger’
Analysts agree that the loss of New Frame, which commissioned long-form narrative features that South Africa’s newsrooms are often too squeezed to produce, is a blow to independent journalism — and to journalists.
“Quality journalism has a price. You can’t do investigations without investing in people, time and resources,” Fray said.
“I think from a cost point of view, the decline of the New Frame hits hard, because there is very often an undermining of the work of journalists. Because people feel that they can get what they think is journalism for free … they undermine the true value of journalism. And I think one of the things the New Frame did was to set a benchmark for journalist pay.”
South Africa’s newsrooms are desperate to find sustainable business models. Rumney pointed to the membership model, deployed successfully by Daily Maverick, as one that represents a promising solution to the media’s funding crisis.
In the wake of this crisis, Fray cautioned media organisations against becoming too focused on day-to-day survival. “I think there is such a focus on fixing, or incrementally changing the product we already have, that there is a danger of losing out to people without an attachment to a particular news product,” she said.
“So, people come along and tell the news stories better than we do on the platforms that our audiences are using. I think that’s the bigger danger.”
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