|
Many media organisations are founded by journalists. Too often, the business and sustainability issues are not addressed until a later stage, sometimes only in the face of dwindling grant support. In Malaysiakini’s case, the strong partnership between the two founders and their respective focus on business and editorial, allowed a more balanced growth and the ability to face both business and editorial challenges.
Legislative Environment
 Premesh Chandran
In the mid 1990s, Malaysia created the Multimedia Super Corridor, a zone with special laws to attract foreign investment in the IT sector. As part of this effort, the government pronounced that the Internet would not be censored. In 1998, the no censorship policy was included in the Communications and Multimedia Act (CMA).
Although the CMA allowed online media to exist without licensing, such media continued to be subject to other media laws, such as the Sedition Act and the Official Secrets Act --- thereby ensuring some degree of restraint on the part of online media.
In September 1998, the Asian Economic Crisis produced a split in the leadership, leading to the ousting and detention of deputy prime minister, Anwar Ibrahim. The compliant media failed to deliver accurate and balanced coverage of the political crisis.
Responding to the need for covering all angles of the news, Premesh Chandran and Steven Gan proposed the formation of an online media organization – Malaysiakini.com. With a track record in journalism and human rights activism, $100,000 was raised from the Southeast Asian Press Alliance. Malaysiakini.com was launched on November 20th 1999 with a mission:
“To use the Internet to provide independent and balanced news to the Malaysian public and to set new standards in journalism as well as to support the development of freedom of speech, social justice and democracy in Malaysia.”
The site was well received. Its popularity grew rapidly, reaching 100,000 unique visitors per day by August 2000.
Malaysiakini today
Malaysiakini currently publishes more than 60 articles per day, in English, Malay and Chinese, in the categories of news, letters, features, opinions, columns and editorials. There are also political cartoons and links to blogs and other relevant content.
Malaysiakini charges a subscription of US$40 per year. There are about 5000 paying subscribers, although due to sharing of passwords, there are about 20,000 logins per day. Taking into account readers who view the free content, Malaysiakini now reaches about 100,000 readers directly on a daily basis. We estimate that about 500,000 access Malaysiakini directly or indirectly every month.
Operating Structure Impact on Press Freedom
Primarily, Malaysiakini’s ability to reach 500,000 people directly or indirectly has a major impact on press freedom. The debate and discussion on Malaysiakini is vibrant and informative, and has led to significant policy changes. These includes the government creating a commission to investigate police conduct, changes to waste management, addressing complaints of corruption and responding to issues of local government.
By reporting today’s news today, Malaysiakini has also put pressure on traditional media to report more accurately and independently. Traditional media has improved its coverage, and has also started reminding the government that too much control will drive readers away from newspapers and TV. Evolution of our business strategy
Malaysiakini was launched as a grant dependent, non-profit organization. Besides grants, Malaysiakini targeted revenue from advertising, mainly from cash-rich dotcoms. In its first year, Malaysiakini earned more than $25,000. As revenue and readership grew through the year, Malaysiakini grew from six to 18 staff and matured into a semi-commercial organization. At the end of the year, Malaysiakini began negotiating with the Media Development Loan Fund (MDLF), which offers affordable loans to independent media in transition countries..
However, dotcom bust (triggered by the Nadsaq crash in April 2000), reached Malaysian shores by the end of the year. In 2001, advertising revenue slowed to a trickle. Before the middle of the year, Malaysiakini was forced to make some tough decisions. The choice was to return to a small grant dependent organization or develop a sustainable revenue model.
Grant Model
As Malaysiakini had previous obtained grants, it was a possible option to continue being grant-dependent for a period of time, until advertising or an alternative business model emerged. However, this would mean reducing staff size by half.
The down-side was that dependence on grants would counter the perception of editorial independence and instead reinforce that notion that Malaysiakini carries with it the agenda of its international funders.
Subscription Model
In 2001, a few media organizations began testing the subscription model with limited success as most Internet users refused to pay for content. Malaysiakini had a necessary basis for introducing a subscription website – unique content, in high demand. Malaysiakini estimated that perhaps 10% of 100,000 readers would opt-in to the subscription model.
However, the subscription model would severely limit access to Malaysiakini. While this would be somewhat overcome by individuals copying the content and circulating, the subscription model placed business sustainability in opposition to the Malaysiakini mission of providing independent news as a tool towards democracy building.
It was also recognized that the organization would need to create a strong business focus, including setting up a marketing department and a strong technology department to support payment and subscription management. There would be little net income from subscription without a significant number of subscribers.
Furthermore, the reduced readership would result in loss in advertising revenue, although, this was not an immediate problem as advertising income was low anyway.
With the support of MDLF, Malaysiakini decided to opt for the subscription model. It was seen as a step towards sustainability. This decision was based on reaching 10,000 subscribers in the first year and releasing the reliance on grants.
Instead, we only reached 1,000 subscribers, barely covering the additional marketing and technology costs. This forced Malaysiakini to continue to rely on grants, while increasing subscriptions. In some way, this defeated the original objective. Nevertheless, developing momentum towards subscription and sustainability created a fundamental change in Malaysiakini, with a sharp focus on becoming grant-free.
Malaysiakini began by launching a new subscription service called Strategic Analysis Malaysia (SAM), a fortnightly political intelligence report following local political developments and aimed at institutions.
Using the SAM experience, Malaysiakini launched the subscription based service in February 2002. Some of the components of the launch included:
- Developing a pre-paid card called “e-coupon” which was sold at retail outlets, to assist online payment among Malaysians without credit cards and who want to remain anonymous.
- Developing a relationship with retail chains to sell the e-coupon
- Developing software to manage subscriptions
- Integrating with MDLF’s e-store to complete credit card transactions online
- Integrating with online banking services
- Deciding which areas of the website should be free and paid
- Producing marketing material, developing alliances for promotions
In April 2002, based on Malaysiakini’s business plan, MDLF invested $350,000 for a 29% stake in Malaysiakini.
As mentioned earlier, subscription efforts failed to reach the targets. Following prime minister, Dr Mahathir’s decision to step down in mid 2002, Malaysiakini applied for a license to publish a weekly newspaper. However, the government has yet to grant us the license.
In 2003, Malaysiakini focused on improving the subscription offering including improvements in content, technology and subscription process. Subscription revenue improved by 57%. However, it was clear that the growth was insufficient to achieve breakeven within five years.
Responding to these developments, Malaysiakini decided on the following:
- Increase subscription rate by 33%
- Develop a greater online presence
- Develop new revenue streams.
Since 2004, Malaysiakini has been expanding its Internet presence. Malaysiakini launched a lifestyle section called Rentakini, as well as launching Chinese and Malay language editions. Malaysiakini is now expanding into Internet TV.
In order to sustain our technology development, Malaysiakini successfully raised funds to set up the Southeast Asian Centre for E-media (Seacem). Seacem’s mission is to build ICT capacities in civil society and independent media. The Seacem grant allows Malaysiakini’s tech team to build new technologies that is then shared with other ICT users.
As mentioned earlier, there is a minimum cost to building and maintaining subscription management software. In order to maximum the return on this investment, Malaysiakini created a subsidiary called Manage4me that handles subscription for Malaysiakini and other similar subscription services. This service, located at manage4me.com was launched in December 2004.
Malaysiakini also launched its own online bookshop called Kinibooks, which sells books on Malaysian current affairs. Kinibooks is tightly linked to Malaysiakini, driving readers to books on similar topics. Kinibooks earns a commission of 35% on all books sold on Kinibooks.
With 40% annual growth in subscription revenue plus income from various projects, advertising and grants, Malaysiakini was able to breakeven in 2004, and 2005. It is expected to do the same in 2006, with the following financial structure . Development of Business Strategy
Over the next three years, Malaysiakini will seek to do the following:
a. Subscriptions are expected to grow by 25% for the next three years, reaching $365,000 by 2009 before moderating to 15% per year. Malaysiakini will achieve the subscription revenue targets by improvements in editorial offering, marketing, payment management and additional services that reduce password sharing
b. Malaysiakini intends to introduce new advertising products such as text ads, tower ads and video ads. Advertising sales will be intensified, with more marketing targeted at advertising agencies and institutions. As readership, visibility and advertising products increases, Malaysiakini expects advertising income to grow by 60% each year reaching $130,000 by 2009. Growth is then expected to moderate to 20% per year.
c. Malaysiakini expects to reduce its reliance on grants from the current level of 37% to 25% by 2009.
d. Malaysiakini will build Seacem, Manage4me and Kinibooks to ensure that revenue is diversified.
e. Malaysiakini intends to develop a key focus in Internet TV, both within Malaysia, and to launch an Asian wide Internet TV offering called Asia247.tv.
Key Elements of Malaysiakini’s sustainability
The trajectory of Malaysiakini has been described above. In order to conclude the experience, there should be several factors highlighted.
a. Good partnership between the founders, focus on business and editorial
Many media organisations are founded by journalists. Too often the business and sustainability issues are not addressed until a later stage, sometime only in the face of dwindling grant support. In Malaysiakini’s case, the strong partnership between the two founders and their respective focus on business and editorial, allowed a more balanced growth and the ability to face both business and editorial challenges. Although there were many mistakes made on the business side due to inexperience, having clear responsibilities and focuses are critical.
b. Committed team members
All organisations would not succeed if they fail to attract committed and talented staff members. The opposite is also true, that the Malaysiakini team have been critical in developing organisation, including sticking with Malaysiakini during tough times. In areas without committed team members, Malaysiakini’s development has stagnated.
c. Strong support from local and international civil society and foundations
Since its inception, Malaysiakini found strong support from locally and internationally, in the form of grants, awards and recognition. Such support was a major moral booster and played a critical role in supporting the growth of the organisation. In the early stages, such support was forthcoming because of the previous activist and journalist experience of the co-founders. However, in most cases, few funding organisations are willing to take risks and to fund new projects with unknown personalities. In order to support media development, there is a need for more investment in creating an environment whereby small organisations can grow to a stage that they are recognised and receive funding.
d. Critical support from MDLF
The Media Development Loan Fund played a critical role in assisting and shaping Malaysiakini. Besides investing in Malaysiakini, MDLF assisted by:
- Providing capacity building for journalists to become media managers
- Creating (or reinforcing) a balance between editorial and business focus
- Understanding of the politics of emerging democracies
- Crisis assistance, loans, grants
- Networking with other independent media via MDLF bi-annual media forum
- Access to big players like Wall Street Journal.
Perspectives on media development Promoting media development has become an integral part of Malaysiakini’s broader mission. Towards this end, Malaysiakini has participated in the Global Forum on Media Development and hosted the first Asian New Media Forum in January 2006 and spoken at various conferences about Malaysiakini’s experiences.
While developing a strong sustainability focus, Malaysiakini does see a critical role in media development and media assistance.
Malaysiakini believes that today’s media can be divided into three categories:
a. Bloggers, Citizen Journalists and other types of volunteer media.
These services tend to be small or niche operated by individuals and organisations. Although their individual readership may not be big, they are a key element of the media landscape, playing a role of highlighting issues and watch-dog role of big media. Generally opinionated and ideological, most would appeal to a narrow audience who agree with the perspective presented but collectively have a loud and plural voice.
b. Big media
Big media organisations have always had to trade off editorial independence and courage against the interests of advertisers, owners and government officials as well as populist interests and addictions. Now, with audiences being further diluted by the Internet explosion, investments into quality journalism is declining. This has given rise to the question of whether journalists actually belong in the media industry.
Nevertheless, big media organisations have the reach and agenda setting power, absent in smaller media organisations.
c. Public Service Journalism
Informed, independent journalism is a critical factor in governance. There are tangible economic benefits for society at large, including exposing corruption, giving visibility to trends and social dynamics, alerting the public to health and other threats, opening space for public debate and generally providing critical information to society. Societies that lack independent media, are often economically inefficient, corrupt and lack the ability for long term development.
Good journalism suffers from the free-rider problem – everybody wants it, but nobody is willing to pay for it. One solution is public broadcast system. However, most public broadcasters receive direct funding from the taxpayer, are often not subject to market forces. They are often accused of catering to the government of the day, becoming irrelevant to public interests, or of poor quality.
Perhaps the future lies with privately owned, public service journalism. Such media organisations could compete for a pool of tax-payer funds, foundations grants, public donations and public-service advertising by government and civil society.
Indeed grant-receiving civil society, encouraged by international aid agencies and foundations, have to invest more in advertising in public service media organisations. This would promote the agendas of civil society while encouraging media to be more responsive to developmental issues.
The three types of media illustrated above form a reach media ecosystem, competing and complementing the others. Issues sparked off by bloggers or public service journalism become major issues demanding a response from the government only once they hit primetime or the frontpages of major newspapers. At the same time, bias and mistakes by big media is often mocked by small, more independent media.
Hence media development should be aimed at infusing the blogging community with journalistic ethics, creating a financial sustainable environment for public service journalism and ensure high level of accountability of big media organisations.
Note: This article was contributed by Premesh Chandran, the Chief Executive Officer of Malaysiakini
Trackback(0)
 |
TrackBack URI for this entry
Subscribe to this comment's feed
Dhalad Media is community owned and controlled, giving access to voices in the community and encouraging diversity, creativity and participation. Community media provide a vital counterbalance to the increasing globalisation and commercialisation of the media. Community Media is providing media and information communication technology access, training and employment and is an exciting source of social innovation and practical 'joined up' outcomes. Combining social enterprise, creative content production and skills for the digital economy, Community Media has a vital role in reaching out to people and communities at risk of exclusion and disadvantage. Community-based radio, television and Internet projects work by enabling people to become media producers, to send as well as to receive, and, by working together, to reinforce knowledge, dialogue and cultural expression at neighbourhood and community level.
The freedom of expression underpins all other human rights. It is the means by which other human rights are defended and extended. In the Information Age the freedom of expression takes on additional importance, as the ability to send and receive information, regardless of frontiers, comes increasingly to dominate our economic, social and cultural life. A new grassroots agenda is emerging to articulate the right to communicate an agenda in which access to new media and communication technologies is seen as an essential part of public life and a democratic culture.
Dhalad Media:
A Community Radio Station ? Online Radio & Saterlite radio
Dhalad , Community Radio Stations, serves the Somalia population in all Uk , broadcasting in Somali English delivering entertainment, local, national and community all over Uk information in a bi-lingual format. Dhalad radio is a voice of Uk multi-faith community, a voice to let the people of Uk express their needs, desires and giving organisations a chance to use Dhalad radio as a platform to deliver their aims and objectives. Dhalad radio is run by volunteers and does not have any paid staff. For further information about Community Radio, see our Community Radio pages.
www.dhaladradio.com