Business models Top stories Uncategorized

Media business post-COVID-19 — a view from the East

Managers from Eastern Europe and Central Asia speak out about current challenges and prospects for media businesses

The global economy has been battered by COVID-19 and media are in survival mode, with steep declines in commercial revenues. Many have downsized or cancelled projects. 

The Fix spoke to CEOs and media managers from Moldova, Kyrgyzstan, Ukraine and Turkey to understand the situation facing their media businesses.

Respondents’ answers have been condensed and edited.

On advertising and event revenues

Irina Ghelbur, CEO, Agora media (Moldova):

Starting March 9, our advertising clients began to withdraw ad campaigns due to shutdowns of activities or planned events. March revenue comes mainly from previous months invoicing so we expect to feel the impact of lost revenue in April – down 30% from our monthly average. Our company secures 50% of its budget through advertising.

Ulugbek Akishev, Commercial director, KLOOP (Kyrgyzstan): 

There was a decline in contracts for advertising – about 60-65 percent compared to last spring. We had a relatively small flow of advertising orders, as we work only with native advertising, and then there is the pandemic and the state of emergency, so we only have the long-term contracts we concluded long before the epidemic. That’s what we’re working on now. But many projects have been frozen.

We have not yet counted the losses and are trying to throw all our energy and resources into providing the organization with money for the quarantine period, in which the editorial office has been since mid-March.

Alyona Nevmerzhytska, Commercial director, Kyiv Post (Ukraine):

Of course The Kyiv Post experienced a decline in advertising – people want our print newspaper, they are not interested in advertising in a pdf version of it. During this time of uncertainty companies block their marketing budgets and wait for the quarantine to be over. Then they will reconsider cooperation and advertising.

We had many events in the pipeline for March and April, all of them had to be rescheduled. The share of events in our revenue mix is 20%.

Sevgil Musaieva, Chief Editor, Ukrainska Pravda (Ukraine):

For now there is no significant reduction in advertising but we know it will come. Usually, marketing budgets are approved in advance. We are currently executing contracts planned much earlier, in January. Coronavirus actually increased situational advertising. Socially responsible businesses are actively investing into banner advertising promoting their contribution in the global battle against COVID-19. Meanwhile, Google advertising (click on Google), a crucial revenue stream for us, now seems to be declining.

However despite a significant increase in traffic we are observing a decline in ad revenue per click. Companies are much less willing to advertise on websites with lots of mentions of COVID-19 or quarantine measures.

Sinan Ozturk, Digital Manager, Daily Sabah (Turkey):

As of the beginning of April we haven’t experienced any decline in advertising, but I don’t know if it will be the same in the future. I can see this will affect us long term though. 

For example, one of our main partners is Turkish Airlines. We have a long term barter-deal with them. Also, they distribute our newspapers on their flights. Right now, it’s not urgent but if this crisis lasts for six months, then one of our key partners will be affected.

On responses to economic recession – lay-offs, new verticals etc.

Irina Ghelbur, CEO, Agora media (Moldova):

First thing done: renegotiating with our tenant. We managed to obtain a 30% reduction on office rent for the coming months. We also informed all donors and partners on the expected development of the situation for us as a media. 

Next I informed and prepared all the employees about the upcoming crisis and our capacities for the moment. 

Over the last 4 years of non-stop fighting for financial security, we’ve learned to make savings in times of good revenues. At this point we enter the crisis with a reserve fund that secures us for 3 months.  

Ulugbek Akishev, Commercial director, KLOOP (Kyrgyzstan): 

Our work with commercial partners falls into three areas – native advertising (business), sponsored content (NGOs and international organizations) and video production. In case of a recession, we will consider other models of media business, such as integrated ads in our social media pages, display and banner ads (I hope not, this is a mess!), and maybe events.

We also have a strong IT-department which makes amazing stuff and we definitely will try to make some of our products available for commercial clients.

Alyona Nevmerzhytska, Commercial director, Kyiv Post (Ukraine):

We are trying to find new formats of cooperation – online discussions and meetings etc. Also our print Business Focuses [a sponsored business-focused section – TF] will now be done online. For the moment we are not laying off staff.

Sevgil Musaieva, Chief Editor, Ukrainska Pravda (Ukraine):

We value our employees and would like to retain the whole Ukrayinska Pravda team as it is now. We will be doing everything possible to avoid salary cuts and layoffs. 

Especially, considering that our organization is still paying less than the market average rate. Instead, we are planning to reduce other costs such as office rent, as we are all working from home now, or business travel expenses, which were a sizable part, as we used to travel around Ukraine to report on stories. 

Also, we will be looking for new opportunities and partially start relying on our readers’ support. We have been planning to launch a membership program for a long time and currently this is becoming more relevant. 

Secondly, we will be looking for grant opportunities to implement projects that matter the most right now. 

On what keeps media managers up at night

Irina Ghelbur, CEO, Agora media (Moldova):

I worry about my family’s health in a country with a very poor medical system and about the future of all 25 employees of the company. My objective is to keep all jobs secure and the media we produce to keep functioning throughout the crisis.

Ulugbek Akishev, Commercial director, KLOOP (Kyrgyzstan): 

The biggest concern right now is the possible recession and that we will lose a lot of the progress made in the past three years we have been working to build a native advertising portfolio and have just started to be a competitive option for commercial advertisers (they made up only 30% of our clients between 2017 and 2019, and have grown to 55%). 

We built a great product for businesses and it just started to be demanded among medium and big businesses in our country. It’s just so sad to lose all of that.

Alyona Nevmerzhytska, Commercial director, Kyiv Post (Ukraine):

The sales department receives very low salaries because they are out of advertising and commission now. Also, in general the uncertain situation and how long it will last.

Sevgil Musaieva, Chief Editor, Ukrainska Pravda (Ukraine):

I’m afraid of somebody in Ukrainska Pravda getting sick. We are staying in touch every day during our check-in meetings and asking about each other’s well-being. There is nothing more important than people’s health. 

I really hope we go through this crisis without a tragedy. Staying healthy is the most important thing. We are at the lowest point in Maslow’s Pyramid, unfortunately.

Regarding work concerns, our mission is to provide people with information and find hope in times of crisis. I am very concerned about negative news and its impact on our readers. 

Sinan Ozturk, Digital Manager, Daily Sabah (Turkey),[not edited]:

As a part of the audience, I’m pretty dissatisfied with the coronavirus coverage throughout the world. We did this very badly. I’m not saying we should underestimate the crisis. No, but the reporting is freaking out the old people. People are dying, but many more people are recovering, there are centennials recovering from the coronavirus. 

I think we should also stick to those stories. Daily Sabah was a little bit on the negative side of things. Now we actually are trying to follow a more balanced course. We are trying to include more about positive stories, recoveries and economic support packages. If you want to attract bigger audiences and be read by people, you have to report those things, too.

On sources of hope in times of crisis

Irina Ghelbur, CEO, Agora media (Moldova):

As much as we want to rely on membership subscriptions and donations from people that read us, we estimate that people will be very attentive with their expenditures in the near term. International donors are our hope for emergency funding to help us survive the crisis.

Ulugbek Akishev, Commercial director, KLOOP (Kyrgyzstan): 

I hope that our numbers of viewership will not drop after the crisis and this will attract new customers because numbers are the only measurement for advertisers.

Also, we are considering working with commercial partners regarding a long-term sponsored section, so maybe this will not let us go down.

Alyona Nevmerzhytska, Commercial director, Kyiv Post (Ukraine):

The number of online subscribers is growing and there are some international organizations that give grants for the coverage of COVID-19. We have three sources of hope:

  1. Online subscribers
  2. Grants
  3. Our publisher 

Sevgil Musaieva-, Chief Editor, Ukrainska Pravda (Ukraine):

Positive information and the importance of our mission. We look for positive news or jokes to evoke positive emotions. 

The cost of mistakes in the media is very high right now. So, I am asking everyone to be in earnest about what they do, how we check information and sources. It can all cause panic, people are already reading the alarming news and if there was even more alarming and untrue information, it would be horror. Every day I make it clear this is very important.

%d bloggers like this: