For money, the media allowed to be captured

Now the party appears to be over and the cleaning up of the financing models must start

COMMENT | JOSEPH WERE | The National Association of Broadcasters, media managers and experts, the ministries of Finance and that of ICT and National Guidance, are debating whether the government should give its advertising money only to Vision Group and Uganda Broadcasting Corporation (UBC) or include private media as well.

Private media owners insist they provide a public good and that the government has a duty to ensure the economic survival of their businesses. These owners are peddling the emerging mainstream position in media discourse since a surge of millions of free online news publications and a few large digital media aggregators led to mass audience declines and huge cuts in circulation and advertising revenue. It is the reason UNESCO has said public financing should be made available for trustworthy news outlets, and donors and philanthropists should come to the rescue. None the less, pushing this line is ill-conceived.

Public goods, by definition, benefit every member of society without discrimination. Examples include health, education, security, roads and clean water. It makes sense for the government to pay for them.

Although journalism is clearly a public good because it benefits society as a whole, it is equally a business from which media business owners aim to earn private benefits. This is why media owners are described as both merchants and missionaries (see Theodore Peterson’s 1956 book, ‘Magazines in the Twentieth Century’).

In reality, many private media today are unwilling to pursue any mission. They are purely merchants pursuing profits. That is why the government’s move to withhold advertising money to some media outlets should not be seen as a political decision only. It is also a business financing decision and a fight among government officials, and with media owners, to control government advertising money.

Note that of the 70 licensed TV broadcasters in Uganda, the majority is either owned by senior government officials or pro-government institutions. The same applies to the over 200 licensed FM radio stations and over 30 newspapers and websites. This is because broadcast license allocation has been an instrument of indirect state control of the media industry. All media has been captured.

It is also clear that the government will continue to give advertising business to those who fall in the right camp. The rest will be told there is cost-cutting. This is also a form of state control of the media because it is clear that some private media houses can collapse if starved of government advertising.

Nothing new

There is nothing new here. In 2017, the government of Kenya banned all advertising in private media and started its own magazine and online portal called My.Gov. Ironically, the printed My.Gov magazine was distributed as a paid for insert in two private-owned newspapers; one of which was linked to then-President Uhuru Kenyatta. In South Africa, the government formed its own newspaper; Vuk’uzenzele, when it withdrew adverts. In the case of Uganda, the chosen route appears to be to favour media outlets under the Vision Group and UBC.

The decision can be seen as continuation of a trend of the government’s consolidation of its power. It is similar to moves to resurrect government–owned commercial banks as the captains of the financial sector. It can also be explained as part of the government’s recent moves to cut down on its expenditure.

These threats to private media firms is not unique to Uganda. Across the world, advertising revenue shortfalls have led media businesses to craft new financing models. But others have reacted by running to governments for subsidies in form of government advertising. Many private media outlets are willing to pay the cost of loss of editorial independence to get government advertising. Under the new model, the need for quality content for audiences is eliminated since government advertising money is acquired on the basis of government goodwill.

And since publishing government advertising and promotional content does not require journalistic skills, many media houses have let go of their highly skilled and highly paid professionals and hired low hangings to execute the dumbing down. This has diluted the quality of news products. But with slashed wage bills and others costs, the media business owners have grown rich and powerful.

Ironically, politicians do not like individuals who are rich and powerful – even when they are in the same camp. That could be why the government is withdrawing advertising money now. It happened before, in 1993, to Uganda’s biggest private media house, Monitor Publications Ltd, which is now a subsidiary of Nation Media Group.

The Monitor was started by Wafula Oguttu and others in 1992 and quickly became powerful. When in 1993 it threw a first anniversary party, it was a never seen before lavish splash attended by many influential people. The directors had even bought themselves brand new cars. The government appears not to have liked that. Soon after the party, the government banned advertising in The Monitor.

Vision Group, UBC mistake

But the government outlets; Vision Group and UBC, in their pursuit for free government money, are equally mistaken. This is at three levels. First they confuse media reach with media impact. Having a nationwide reach does not mean being the most watched or read. Without help from private outlets, Vision Group and UBC will fail to offer impact value to the government.

Secondly, Vision Group and UBC managers appear to equate acquisition of more business assets to increased business efficiency. But they should look at Vision Group’s financial statements which are public because it is a listed company. In 2022 it recorded Shs112 billion in revenue but only Shs588 million as income and an appalling rate of Return on Assets of 0.97% from Shs70 billion in capital employed. This shows that merely pumping money into a business without changing its people and processes will not change the company performance.

Thirdly, the Vision Group is a public limited liability listed company with the Government of Uganda as majority shareholder (53.34%) through the Ministry of Finance. But several retirement benefit schemes; including NSSF and PineBridge, Makerere University, Bank of Uganda, and private individuals and institutions own the rest. That means these investors will see a dilution of the equity every time the government pumps new money into the Vision Group.

The finances and operations of UBC are not public. But based on what is observable; its people, processes, and products, it is clear that turning it into an efficient business operation requires more than more money. In fact, giving UBC more money could prove disastrous. Bottom-line is the managers of Vision Group and UBC equally need to recognise that they are operating businesses and not government agencies. That means growing net assets through efficient generation of new revenue streams and not government handouts.

What about the private media businesses; what are they to do to survive? The answer is as simple as it is complex. Return to the old models. Invest in high quality journalism whether online (which is the favoured flavour of the moment) or in print (which should be the prudent decision for easy monetization). Hold the government to account, fight corruption, defend freedoms, stand with the common people, preach hope, and promote well-being.

The Monitor thrived for four years without government advertising largely because of two strategies; pursuing a clear mission and engaging with the public. The Monitor’s tagline was “The Paper that builds the nation.” That was their mission. The Monitor positioned itself as the champion of the common man and woman in its editorial policies and coverage. The newspaper ran stories about communities and local people. It also positioned itself as the anti-corruption crusader, fighter for transparency and accountability in the government and promoter of liberal ideologies in the socio-economic arena. These missions resonated with the public who voted with their money for the Monitor.

When new managers under Nation Media Group took over The Monitor, the public role was subsumed by renewed focus on Monitor as a business. The tagline changed to Truth Every Day. That was not a lexical transformation only, it was an ideological disorientation from the mission.

Private media firms need to fall back to the traditional dual-product financing model for news media in which high quality content attracts audiences, which audiences are sold to advertisers, including the government. Media firms must be both merchant houses and mission houses. That is how they will survive.

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