The Nigerian media industry has witnessed tremendous growth over the past two decades. However, the sector has consistently failed to command the level of financing that is required to harness its full potential. Many traditional media enterprises remain unable to attract funding from potential investors because of the myriad of challenges affecting them as they engage in the daunting task of keeping afloat in Nigeria’s tough business climate.
The Media as a business in Nigeria is fraught with difficulties of perennial shortage of capital and manpower, and entrepreneurs in this field are often left to go after funding from personal means, including unconventional sources. This means that within a few months or years of commencing operations, the business begins to struggle and often ends up insolvent. Across every sector of media, the entire landscape is strewn with carcasses of defunct media establishments. Many not yet deceased are barely getting by, essentially comatose in operations, with demotivated staff members scrounging to make ends meet.
A World Association of Newspapers and News Publishers report on mobilising funding for independent news media states that “the capitalization gap for independent news media businesses in developing markets is a stark reality.” In Nigeria, this stark reality is reflected in the number of news media businesses that have folded up in the past 25 years. Television stations such as Clapperboard, DBN and MBI, pioneers in the field of independent television, have either died or mutated so much as to be unrecognizable.
In the cable TV sector, HITV is the poster child for a media start-up arriving with much promise, but never able to surmount the innumerable impediments which besieged it from the day it commenced operations. Other broadcast start-ups like NN24, ACTV, Infinity, Daarsat, MyTV, Consat, Montage and never actually stood a chance as they all foundered even before gaining significant market share. The story is always the same: many months and billions of naira later, operations grind to a halt and the blame game commences. This same trend has been witnessed in virtually all the sectors of the media industry. There are no more than 3 leading dailies from the 1980s that are still operational and thriving today. Daily Times’ recent rebirth under new management has not really paid off as the paper has failed to live up to its glory days. Compass, New Age, NEXT, Post Express, Eagle, Third Eye, Daily Mirror and many others never made it past a few months in operation before going belly up, throwing hundreds of journalists out of work.
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Apart from the fixed costs for equipment, technology and content, there are the prohibitive costs of licensing, regulation and other hidden elements that make the business a high-risk venture and hence unattractive to potential investors in Nigeria. Additionally, there are economic and political pressures from the elite in developing countries, including Nigeria, who make the survival of the media business difficult without their influence and involvement. This in no small way greatly inhibits the role of a free press in a democratic society. A fallout of this is that Nigerians still largely rely on Western media to provide reportage on stories affecting them every day.
A BGL Research and Intelligence report on the state of the media industry in Nigeria asserts that “attempts to raise private equity-style funds for the industry have remained largely unsuccessful,” but that for the Nollywood side of the media business, international attention and strong interest from global markets has seen some change for the better. This does not seem to be the case for the core media and journalism industry, which continues to be trapped in the cycle of under-capitalisation, economic hardship and easy buyouts and control from wealthy individuals with vested interests and for intellectual hegemony. Today, widely read dailies like The Sun, The Nation, The Independent, Daily Trust, Pilot, National Mirror and others are 100%-owned by politicians. Others, including television and radio stations that are ostensibly “independent,” are deeply influenced by the political class and can hardly survive without the patronage of the elite.
For independent media to thrive therefore, new strategies for accessing funding and capital must be employed, especially if they are to fulfil their role of being the watchdog on which the public can rely for balanced news and information. This assessment of the challenges in the Nigerian media industry commenced in 2014 during a research program at the Pan Atlantic University. It is an attempt at a daring solution, which some agree, may be an answer to an industry characterised by a myriad of never-ending problems.
THE HITV EFFECT
In 2005, lawyer and media entrepreneur Toyin Subair made an incursion into the Nigerian media industry with the launch of HITV. Within three years, the organisation had acquired sizeable market share in the pay TV industry by being the exclusive rights owner for the European Premiere League in Nigeria. On expiration however, HITV was only able to come up with a fraction of the bid amount needed to renew the rights to the League and lost the bid to its South African competition, DSTV. Within 18 months of this loss, HITV ceased its operations in Nigeria. Perhaps this should have been a warning sign to the others who came after it, as most of them operated for three years or less. It is instructive to note that what happened to HITV cannot happen in China – but that’s a story for another day.
SORRY STATE OF AFFAIRS
More than half of Nigeria’s media organisations are fundamentally insolvent, unable to meet their obligations as and when due. This writer’s survey found that around half of the media establishments operating in Nigeria (across all fields), have not paid wages in more than 3 months – and this was before the coronavirus pandemic. Most media establishments in Nigeria do not contribute to any pension fund. They also do not possess health insurance or life insurance that guarantees benefits to the journalist’s family in the event of their death in the line of duty.
The tendency is to put the blame squarely on the owners’ shoulders, without due consideration of all the peripheral factors which have stopped them from reaching their full potential in the years of operation. While this may be true, it is not entirely the case with all the start-ups. It is a well-known fact that when companies like NN24, Bloomberg Nigeria, NEXT newspapers and Ebony Life TV commenced operations, they possessed some of the best employee benefit schemes available across the industry, with local and international training programs bankrolled by the organisation. HITV on its own attracted the best hands with impressive pay packages – its human capacity development was also second to none in the industry during the time it operated. But survival in the media business requires much more than best intentions or having capable hands; it requires capital and lots of it.
MIRED IN DEBT AND MEDIOCRITY
By almost every measure, the traditional Nigerian media industry is not pulling its weight. There are no regional magazines, with coverage across West Africa, let alone the sub-Saharan region. A number of publications have attempted to push across borders, but the sheer size of capital required to hire the right people, print locally and deliver relevant content on a consistent basis, meant that they would spread themselves too thin, as was the case with True Love, Flair West Africa and Hello. TV and satellite stations with coverage across borders could only boast of negligible numbers until the recent cultural exchange occurring through music, art, cinema and the digital convergence. And even then, the people getting the benefits of such exchanges are not home-grown media establishments, but rather hybrids like Africa Magic and their spin offs, which are an agglomeration of many iterated ideas from the struggling competition.
In the news segment, some notable exceptions are TVC News and News Central (a reincarnated NN24), which attempts an Aljazeera model of local reporting across Africa. Indeed, TVC News hired top talent from Aljazeera at its launch – eight years ago – in a bid to establish a truly continental news platform. This impressive feat has one problem, however. One should note that Aljazeera is 100% Qatari government-owned, which has an agenda to bring reportage straight out of the Middle East which their western competition was unable to do. In Africa, news is fragmented and must be relevant locally. Most people are not aware of – nor do they care about – the fighting in Ethiopia or the threat of Al Qaeda in the Islamic Maghreb. They do care about the rising cost of food or the ASUU strike. TVC realised this quickly and ceased its Africa-wide reporting after running for more than 5 years without profit.
We should also note that Aljazeera is not profit-driven but agenda driven and will therefore be sustained as part of the overall budget of the Government of Qatar. Reporting hard news across Africa without unlimited access to money will be a failed experiment if media owners do not focus operations to connecting with local audiences. Yes, there is BBC Africa, but there is also BBC Hausa, and Yoruba, and Pidgin and so forth. Also consider that Aljazeera America failed after less than three years and billions of dollars for this very reason: by trying to make Aljazeera America profit-oriented without localizing, they failed in their mission as the American public never warmed to the station. The New York Times writes that the station was essentially dead on arrival, with a parent company in Doha overtly promoting Qatari Government foreign policy objectives including supporting controversial organisations like the Muslim Brotherhood.
Another fresh entrant is Arise TV, which was launched with much global pomp, but came to near utter ruin under the weight of licensing fees, massive running costs and intercontinental lawsuits. For those who remembered the defunct “THISDAY South Africa,” it was easy to predict that it would be an experiment doomed from the start, having London and Washington DC bureaus established with no defensible plan for revenue generation and inadequate understanding of local labour laws in Europe or the Americas. The revamped Arise TV with a narrower focus has seen some success in recent months under a new chief executive.
INDUSTRY CONSOLIDATION AS SOLUTION
In making a case for the consolidation of the banking industry at a special Bankers’ Committee meeting in 2004, Professor Charles Soludo made an important note: “All over the world and given the internationalization of finance, size has become an important ingredient for success in the globalizing world. In the world of finance, no country can afford to operate in isolation. The last few years have witnessed the creation of the world’s biggest banking group through mergers and acquisitions. The trend has been influenced by factors such as prospects of cost-savings due to economies of scale as well as more efficient allocation of resources; enhanced efficiency in resource allocation; and risk reduction arising from improved management.”
Following on the above point, it should not be entirely sacrilegious to suggest that the entire future of the traditional media industry as we know it today rests on consolidation. For decades, most of Nigeria’s newspaper houses, television and radio stations have operated as one-man businesses, struggling to make ends meet. The same style of governance has spilled over into the digital media space through the likes of Linda Ikeji, Uche Pedro and so forth. With digital however, growing organically, while slow, enables companies to manage costs and remain sustainable. For many traditional media establishments, their response has been to set up websites and social media accounts churning out the same content from their newsrooms in the hopes of acquiring new audiences or appealing to millennials and Gen Z. It has now become clear that old media business models have been irrevocably disrupted and that the new models – even for early adopters of online journalism – are fundamentally different from what they once were.
CONSOLIDATE OR DIE
The key takeaways from the consolidation of the banking industry which the media must now focus on are, “cost-savings due to economies of scale, enhanced efficiency in resource allocation and risk reduction arising from improved management.” Simply put, size matters – for relevance, for influence and for profit. For the media industry as we know it to survive, become profitable and attract top talent, there must be consolidation on an unprecedented scale, not just within the same fields of media, but across industrial catchments. A truly viable consolidation venture will see at least 3 to 4 big players from every field. This would mean the tentative merger of say, Thisday, Guardian and Vanguard with a medium size television station and two leading radio stations. Throw “The Cable” or “Premium Times” into the mix to bring their online proficiency, and you’re ready for the next 10 years.
One of the important considerations in these kinds of mergers as has been noted in other industries is the similarity in vision or core principles. Channels Television, with a strong partiality for news may merge with or acquire the news divisions of AIT and Silverbird Television, while Silverbird and AIT’s other core divisions can focus primarily on entertainment programming, which may then see the acquisition of smaller operations like ONTV, Rave TV, Superscreen, MITV and TVC Entertainment – and all this before bringing in radio stations and entertainment magazines under the same corporation. Following the same logic, TW Magazine, Genevieve, Exquisite Magazine and others should become a single entity; but this will not be enough without a BellaNaija in the mix and several other struggling platforms offering good content.
This writer brought up these possibility or mergers by having extensive discussions with a number of media chiefs on the issue. Some declined outright. Others saw it as a great idea but doubted its practicability since most of the establishments were started and wholly owned by a single individual. The problem with this kind of thinking is that it is already becoming too late.
