The threat posed to media businesses globally by the coronavirus is existential. From the health dangers facing journalists covering events to the decimation of the events industry and the decision by brands not to place advertising next to stories on the virus.
At times like these, it is understandable that media managers, editors and owners feel powerless at the destruction of the economic foundations their outlets are built on. But while we can’t make brands advertise when they don’t want to or replace every live event with a webinar, there are steps news executives can take to limit the losses they are facing and to give direction to their business decisions.
These recommendations were drafted by MDIF and supplemented by the direct experiences of our clients of dealing with the COVID-19 crisis. They were created for independent media operating in a range of countries where access to free and independent news and information is under threat, places like Guatemala, South Africa and Indonesia, but apply equally to most media organizations in most parts of the world.
“This is a Marathon not a Sprint,” Marcin Gadziński, Managing Director, gazeta.pl, Poland
Cut Costs; Hoard Cash
- Build and manage your cash reserve in order to navigate the crisis that will dislocate your business model and financial projections.
- Schedule and conduct standing meetings with your core management team in order to assist with rigorous cash flow management.
- Provide clear strategic discipline where everyone knows what is expected and how they are supported to do their work.
- Reforecast your business with various downside scenarios. Reduce your revenue projections (intervals of 10% up to 50% reduction) and extend the impact on your core business (intervals of 3-months up to 18-months). Aggressive downside scenario is a 50% revenue reduction over 18-months; however, potentially not a worst-case scenario.
- Accelerate revenues through packages, incentives, discounts and/or prepayments.
- Manage accounts receivables, collect as much as possible from outstanding customers through strict collection policies and/or incentives and discounts.
- Execute on cost-reduction strategies that allow the business to maintain productivity while matching the demand of your product, audience and customers. Reducing operating costs in order to conserve cash is critical to the survival of your business.
- The introduction of remote working may provide cost-saving strategies in terms of office space now and in the future.
- To the extent possible, negotiate the cost of inputs (supplies, raw materials, labor, etc.) and pre-buy materials at a discount when possible.
- Postpone all hiring and when possible reduce staff (this may be an opportunity for some staff to work part time as they care for children at home). Consider across-the-board temporary salary cuts as an alternative to cutting staff at this difficult time.
- Design and implement an internal crisis workflow for your staff and coverage for your audience. Measure and seek opportunities that will allow for your company to fulfill the current needs of your audience.
- Maintain accurate and updated financial and accounting records so that you have a complete and accurate picture when you need to make hard decisions fast.
- Be as transparent as possible with your staff and your readers/listeners/viewers.
- Consider asking for reader support and requesting voluntary donations, in the knowledge that there are other worthy causes. This may provide a short-term opportunity, though timing is everything.
- Teams managing reader support relationships must engage, engage and engage to showcase the value of the content and information you provide. However, be aware that the current increase is likely to stall as consumers further tighten their budgets.
- Explaining to your members or subscribers the cost-cutting you are doing to weather the storm is critical for their continued support.
- Explain why you have decided to keep content free and not behind a paywall, if that is your approach.
“A crisis will magnify any problems you already have within your organization,” Giovanni Zagni, Director, Pagella Politica, Italy
Content Remains King
- Know your purpose
- This is the time to focus and grow your core audience, when they are most in need of reliable information. Delivering news and providing service to the community you serve is hard work; it takes tremendous discipline and focus to do so every day, but it is critical at this time.
- Prioritize context over being first.
- Consider introducing stricter editorial rules and be even more careful with wording so as not to create more fear and panic.
- Stay ahead of what your audience wants and needs to know about the pandemic as daily life adapts to mass quarantines.
- Be inventive: experiment with explainers, data and infographic visualizations, Instagram Live Updates, or audience participation efforts such as surveys and live Q&A on Facebook.
- Prepare for dramatically heavier on-line use by your audience. Are your systems and bandwidth adequate? Strengthen your IT department and workflow.
- With many media reporting 50% increase in traffic to their website, this is the time to consider retention, data mining and understanding what areas of your content will garner the highest CPM if you are part of a programmatic advertising model.
- Internal efficiency as well as content delivery and critical care with SEO and engagement will assure that waste is limited.
- Consider and evaluate partnerships that provide strength and security of your core assets – this is the perfect time to become a true partner with some of your best clients.
- If available, tap into government, NGO and CSR communication budget streams to counter the spread of misinformation – this may help plug the gap left by falling regular ad/brand revenue.
- Try to create alliances with other media organizations to enhance coverage.
- Newsletters are an important part of reader engagement and communication. Consider a “pop up” newsletter balancing regular COVID coverage with the need more positive news.
Your team is not immune
- Plan ahead for how the pandemic will impact your team.
- Immediately require all at-risk staff (over 50, immune-deficient, pre-existing conditions, etc.) to work from home and shelter in place. Your senior management team and most seasoned journalists may be the most at risk.
- You will lose staff to quarantine or worse, so you need to build redundancy with your existing team. Train journalists and other staff to handle essential technical roles as best they can. Reassign journalists from less busy sections.
- Consider rotating staff between on-site and working from home. If one person on-site is diagnosed, everyone there may be required to quarantine, so have a team at home ready to come in and take over after the worksite is disinfected.
- Constant internal communications are essential. Staff meetings are vital for workflow but so are “virus free” conversations to assure their well-being.
- Check in on your team often and help them find time to disconnect. This is a marathon not a sprint. This applies to senior management and owners too; leaders also need to rest if they are to perform.
- If possible, provide staff with health support, including counsellors.
If I was to select one action from this list from our experience of supporting media during the last financial crisis, the most critical thing right now is to focus on cash collections to build a buffer as best you can and to start working on plans for contraction as revenue streams such as advertising dip and others, such as events, come to a complete standstill.
Following these tips alone might not be the difference between your business surviving or not surviving this crisis. But it might.
Harlan Mandel, CEO, Media Development Investment Fund