Wednesday, July 18, 2012

LINUS GITAHI, Group Chief Executive Officer of Nation Media which owns thriving newspapers, radio and television stations across East Africa, was in South Africa recently to attend the inaugural meeting of the Board of Advisers of Rhodes University’s Sol Plaatje Institute (SPI) for Media Leadership, of which he is the chairperson. The meeting, held in Johannesburg, discussed a range of issues which impact the future of the SPI and African media businesses. Gitahi took time off to share some of his insights on the future of African media at a time of rapid change with FRANCIS MDLONGWA, Director of the SPI since 2004. Below are excerpts from the interview:

FIM (Francis Mdlongwa): Could you start by telling us why you are visiting South Africa at this particular time?

LG (Linus Gitahi): I came to attend the inaugural meeting of the SPI’s Board of Advisers. I took the opportunity to visit the university (Rhodes) to familiarise myself with it and specifically the SPI. It has been the most rewarding two-and-a-half days and I think we did have a good Board meeting today.

FIM: From your observations, what did you think the SPI’s most pressing needs were in connecting with the African media industry and the industry connecting with the institute?

LG: I wouldn’t say the SPI has pressing needs. I think one of things I was excited about was the SPI’s commitment to meeting the needs of the industry and we spent a lot of time looking at what those needs are, so it was in many ways affirming many of the current Institute’s programmes and hopefully giving input into what might form future programmes because, as we know, media is a very fast moving landscape and I think the SPI has the commitment to remain relevant and to make sure it remains cutting edge in offering appropriate training programmes and solutions to media leaders and managers across the continent.

FIM: This leads me to my next question, which is the advent of digital and social technologies and globalisation which are posing critical sustainability challenges and opportunities for media organisations worldwide. But how are African media organizations in particular coping with these emerging variables?

LG: I actually think that digital and social media are one of the biggest opportunities Africa has because of two reasons. The first one is that Africa is still a little behind in terms of the concept of Broadband, which is the key ingredient in driving the digital media. And the second reason is the result of the first: we in Africa have the luxury of a couple of years to learn from the mistakes that are being made in the West and to make sure that we don’t repeat them. We have the opportunity to experiment with newer ideas so that by the time we say Africa is fully digital, we can actually be right at the cutting edge of taking advantages of the opportunities that these technologies bring. I really think that this is where we need to invest a lot of our time, a lot of our energy. We have the opportunity in the media of actually ending up being net exporters of our ideas and business models to the rest of the world because we have that luxury of trying to study the mistakes of others.

FIM: As someone who is leading a thriving multi-platform media industry, could you flesh out these ideas and opportunities as they affect the African media?

LG: Let me give you an example. When you run a newspaper, you seek to drive up its circulation and you then use that circulation, meaning audiences, to go to advertisers to get advertising because you have got that audience. The game is not any different in a digital media; you have to drive audiences and then use those audiences to go to advertisers and monetise these audiences. However, because of the nature of the digital media, your audiences in many cases are many and splintered. Your news becomes a commodity for many, many organisations or even individuals who have specific needs. One of the opportunities that existing organisations have is to see how they can subject themselves into improving their content and making it very specific to certain niche markets so that if it is content from the Nation (one of the newspapers in Nation Media), somebody feels they have a need to get that specific content because it is different and appeals to their specific interests. For instance, are we just in a business of breaking news? Probably not because every citizen these days can break news because of the new technologies. But are we in the business of looking at how we might analyse a situation and offer different perspectives? Now, that would be the unique feature that established media organisations do. The other one is looking at specialist opportunities. For example around the world, there are media companies which seem to succeed in erecting pay walls on their digital content by offering specialist content, like the Financial Times. They are more successful than other media companies because they have specialist content, more in terms of the finance news which they provide but also the analysis that they provide. Some of our audiences will tell you that they need this type of content because they can only get it from that particular source and that this source is very, very good in meeting their needs. So even within Nation, one needs to ask the questions of what we might do in a Finance area, in the Health area, in the Environmental area that would constitute specialist content for people who might be willing to buy it. Over and above that, if we find that despite having all these big audiences the advertisers are not coming through, we have another fantastic opportunity of trading with those audiences and that is an opportunity that is not being exploited fully at the moment. This is one area that Nation Media is in the middle of looking to exploit. We did research that shows that many of the people who read the Nation online today are based in the Diaspora, and the same research told us that the one thing they do often is to send money back home in Kenya. So we are partnering with banks by delivering audiences to them. The banks are creating the right software to deliver money home easily without clients having to go through the hassles of some of these international transfer systems and, through that, we will get a commission, creating a win-win situation. We have got a credit card that is issued in conjunction with the banks. Although it is in the pilot phase now, we clearly think that if it is successful -- and we have no reason to doubt that it will be successful -- we can completely forget about having to charge our readers for accessing our digital content. This is because we would be able to trade with these audiences and they are able to offer us much more than the $1 or $2 that we might be charging them for reading our content. So there are all sorts of ways we can experiment with and possibly export to other countries and news organizations which might be struggling with what to do with digital audiences.

FIM: But some people might argue that the experience of what is happening around the world so far is that many media companies, especially newspapers, are failing to make enough money from their digital operations. How are African media companies dealing with this challenge of not making enough money from digital platforms and, if anything, traditional media platforms are subsidising digital operations?

LG: Yes, I guess that is what I am talking about. We are not being innovative enough. That is why I have given you the example of the Nation Credit Card, the Money Transmission Card. I doubt that it has been done in many parts of the world…the only place I think it has been used, to the best of my knowledge, is India. So for Africa, we are pioneering this card and this is something other media organizations could learn from if we are successful. Another thing that we are doing is taking advantage of the many people who travel these days do. So in partnering with travel organizations where you don’t have to go to traditional travel agencies, you can create a portal on a website that gets people connected to the best tourism deals such as discounted hotel accommodation. Once you get connected to these deals, the guys offering those deals are going to give a media house such as the Nation a commission for delivering these audiences to them. So we can do a lot of stuff within the blogosphere, or within our online portals, to ensure that we are trading with our audiences. I believe that this type of trading is likely to be way more rewarding than creating a pay wall. I think the mistake we are doing in Africa is that because we are used to selling newspapers, we say ‘now let’s charge these guys and we create a pay wall’ – as some media companies in the West are doing. In creating a pay wall, unfortunately people disappear as they go, for example, to BBC News whose reporters report about Africa; to News24, which reports about Africa; to CNN, which also reports about Africa. This happens because news is a commodity. So there are two things which media companies must do: they need to look at creating specialist content and how they can engage their audiences in commerce. Previously, we used to let commerce be done by other people or we were content that people and organizations would advertise in our publications. Unfortunately, advertising these days is not coming through as much as it used to be, all of this being caused by the changing media landscape which is giving advertisers many platforms to choose from or to use. We need to look at partnerships as opposed to advertising alone to deliver the same revenue or better revenue. Because we must be able to sustain the media operations and grow them, I think this is an urgent imperative, not just for media companies but for the world at large.

FIM: Would you say that what you have just outlined are successful business models by traditional newspapers in the New Digital Age?

LG: What I am doing here is outlining the challenges that we, as media companies, face and what the Nation Media in particular is doing in response. What I am saying is that digital media is here to stay -- that is the first thing that all media organizations need to acknowledge. Of course, newspapers will always be there (in our societies), but their importance is going to decline as people migrate to other competing media channels.

FIM: Is it the importance of newspapers per se, or is it really the need for newspapers to change their role swiftly in line with the rapidly changing habits of their audiences?

LG: The newspapers are changing their roles with the changing habits of their customers, but an increasing number of people are not relying on the newspapers for their information and news. Instead, they are increasingly relying on the digital fashions of the newspapers. That is why the traditional print newspaper will decline as we go forward. It is not going to disappear but it will remain important but decline. It will decline because people are migrating to the other side (the digital and social media). My point here is that the other side is not all doom and gloom (as often portrayed in some media circles); the other side offers us immense opportunities that might actually be bigger, both in the short and long term. These opportunities might be bigger than the newspapers as we know them, but some people (journalists) are refusing to engage with the new reality; they want to carry on with their traditional journalism and ways of doing business as if nothing has happened. Why shouldn’t journalists be the ones who show our audiences where the nearest eating place is? Why shouldn’t audiences go to a newspaper on the web to find out about the nearest Indian restaurant, or the nearest South African restaurant? We (as journalists and media organizations) are not good in doing that on our digital media at the moment, and yet that is what we must do because that is what we are already doing in traditional print. If we do this well, then people will advertise around our new content platforms, and this is non-traditional advertising and is way better than just creating a pay wall that could be a barrier to some of our audiences.

FIM: The profit motive of media organizations, especially in the private commercial media, does not sit well with the public service role of independent journalism. Do you have a comment on this? Related to this issue is what you have already alluded to earlier: which is that some journalists are refusing to embrace digital media. So what could be done about this?

LG: I will say two things: the first is that I see absolutely no conflict in doing good journalism and doing good business at the same time. I think what is necessary in any media organisation is to have a Chinese Wall. In fact, I think it is an imperative, it is a necessary ingredient for the success of journalism that you should have a Chinese Wall between the journalists in the newsroom and your commercial guys. The moment those two get mixed up, I think for me that is the end of independent journalism; that is the end of the newspaper as we know it. So there has to be that Chinese Wall and I completely support that. But within the Chinese Wall, I think journalists are called upon to ensure that what they report about in the name of public interests are serious public interest issues. We must make sure, as journalists, that we are really dealing with the right issues in society, that we are not just reporting issues that are aimed at inciting people or hatred, or trivialising the public interest.

FIM: What do you mean by ‘right issues?

LG: For instance, if you are really serving the public, you must invest in serious investigative journalism. The reality is that the output of investigative journalism pieces should lead to circulation growth. If it is the public that you are serving, then that public ought to pick up that paper -- other factors being constant. So in other words, if you decide to invest your money in a phenomenon such as why birds are migrating from South Africa to Kenya every year, what serious public interest would you be serving? Or should you invest your money in investigating the impact of foreign exchange fluctuations and why the Rand is losing its value and what this means to the consumer and ordinary person in the street? If you do a good piece, I think it will be in the latter story. Both of them are public interest issues, but I think the latter story might be more relevant to more people. In other words, it is likely to lead to a bigger circulation of the paper and is likely to lead to sustainability, even though you did not wake up in the morning to say: what story might I do to drive up circulation?

FIM: So you are, in fact, saying that the issues which define public interest – that is more people being affected by an event, the immediacy of that event to people, its magnitude and so on – are still the defining issues for journalism in the digital era and that these issues are not in conflict with the business models of seeking, for example, to push up circulation to reach more audiences?

LG: I gave you an example in our earlier conversation. There was this issue I was dealing with not too long ago where the Central Bank of Kenya issued a directive that no person should be a director of two financial institutions. And this newspaper comes up the following day with a lead story, a headline, that Bank X is now affected because it has two people who are directors of more than one institution. Now that is exactly what I mean: for me, the bigger issue here is the overall impact of the Central Bank directive and, for me, good journalism would have analysed all the banks and not just focused on that one bank. In this case, there was a bank with even more directors but you see it was not even included in the story. Now what that leads to is somebody saying ‘why did you pick on this particular bank, or do we have another agenda?’ and the conversation completely changes. Instead of really doing a good journalistic piece that brings out the significance of the directive, you end up with a narrow interest story that appears to focus on someone purely for other motives.

FIM: What importance should African journalists and media organisations attach to the issues of ethical journalism and ethical business in the age where transparency, accountability and ethical conduct of people and institutions is becoming a growing concern all over the world?

LG: I think this is one of the most important issues… I have no doubt that good journalism is what will deliver Africa. Because when all else fails when you look at politicians, corruption both in the private and public sector, our societies want competent and ethical journalists who are going to bring sobriety to our lives; they want to see journalists who make a difference by playing the watchdog role. Therefore, it is important that our journalists are highly trained and that they get a fair wage for their efforts. I think this latter point is one of the biggest problems we have with journalism in Africa at present. Our journalists do not get a fair wage for their efforts and therefore they become more susceptible to also becoming part of the problem and falling into the same corruption temptation. So you got to figure out how we solve that problem. I must say that we at the Nation have taken significant steps in making sure that even freelance correspondents who for a long time were paid only for a story that they brought to the newsroom are now put on a retainer fee which ensures that at least they can pay their basic bills.

FIM: Why are we not seeing significant innovation and entrepreneurship generally within African media? Maybe the Nation is one of the few exceptions. What is lacking, what could be done?

LG: I don’t think there is anything lacking. I have to be honest: I think it is a work in progress. Because when I go around Africa, when I talk to many people, I think there is a lot happening. The problem in the past has been that many of the media organizations across the continent were struggling. But right now, I see huge beacons of hope. South Africa has many media organizations that are thriving and that are going to other parts of the country and the African continent. In Nigeria, there are quite a few media organizations that are actually thriving; in Kenya we have the same situation where we have thriving media that makes profits. So I think it’s work in progress. I have actually a dose of faith in the future of African media but at the same time I am very concerned about the viability of community radio stations or small radio stations in Africa. This is an issue which we must all address because many of these stations are small, many of them are vernacular, many of them serve their communities but they lack a revenue model that can be sustained. When you are entrusted with a microphone and you begin to get revenue at all and any costs, we have serious problems. The price that those communities end up paying is way, way disproportionate to the intentions of establishing those community stations. It is common knowledge that many of the issues in the post-2007 election violence in Kenya were caused by community vernacular radio stations. It is common knowledge that many of the genocide issues in Rwanda were linked to these radio stations. My worry is not about that alone, my worry is that even as we speak there are many such radio stations across the continent which may not be viable but are staffed by people with no training. Many of them cannot talk anything more than their local dialect and they are entrusted with having sensible conversations with the whole community, with call-ins and live coverage. Now, this is a bomb waiting to explode. I think media in Africa and the people in Africa must really confront this: how could we invest to make these stations viable? Should we consider merging these stations so that they become stronger with a critical mass for advertising? At the end of the day, we need to make them viable, we need to be able to make them able to do their business through thorough training, through employing the right people, and through having a revenue model that is sustainable because right now they are actually a huge risk.

FIM: So this takes us back to the criticality of having to ensure that there is ethical journalism and ethical business conduct?

LG: Yes, but I think it is not enough to be waiting for a problem to happen -- whether it is in Kenya or Rwanda. You have to follow up this problem because it is there, it is huge, and I think we need to address it if we have to move forward. For me, when you talk about media in Africa, my biggest concern is in how can we engage, empower and create business models for these little community stations to do what they are established to do in a sustainable and ethical way. That is the challenge and I hope the SPI can help Africa to address this issue.


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