The digital publishing industry took a big hit in recent days, when more than 1,000 employees were laid off at BuzzFeed, AOL, Yahoo and HuffPost.
Vice Media started the process of laying off some 250 workers on Friday, and Mic, a site aimed at younger readers, axed much of its staff two months ago before a competitor bought it in a fire sale.
Coupled with recent layoffs at Gannett, the company behind USA Today and other dailies nationwide, the crisis in the digital sphere suggested that the journalism business was damned if it embraced innovation and damned if it didn’t.
The cuts at BuzzFeed were the most alarming. Wasn’t this the company that was supposed to have it all figured out?
Didn’t its team of wizards, led by the Massachusetts Institute of Technology-trained chief executive, Jonah Peretti, know tricks of the digital trade that lay beyond the imagination of fusty old print publishers?
Chris Hayes, the author and MSNBC anchor, summed up the bleak outlook with a tweet that asked, “What if there is literally no profitable model for digital news?”
The in-the-moment doomsaying was understandable. But look past the gloom, and a complicated narrative emerges that does not lend itself to a one-size-fits-all interpretation of What Went Wrong or a handy forecast of journalism’s future.
While leading digital publishers have resorted to harsh measures, legacy titles such as The Washington Post, The Atlantic, The New Yorker and The New York Times have seen growth as they accommodate the habits of their increasingly digitally oriented readers.
At the same time, a digital-native business, Vox Media, the owner of The Verge and Eater, turned a profit last year, its first as a large company, according to two people with knowledge of the matter who were not authorised to discuss it publicly. And a more recent digital upstart, Axios, a buzzy site for Beltway insiders created by the founders of Politico, expects a profit in 2019, according to its chief executive, Jim VandeHei.
Even BuzzFeed may hit its financial marks this year. If it does, the reason will most likely be a combination of old-school business methods tried elsewhere (including layoffs), rather than its ability to crack some esoteric digital code.
It was simpler in the days of print. Even when radio and television laid waste to certain newspapers and magazines, the industry as a whole racked up steady profits.
Twentieth-century readers were more or less unchanging in their habits, so media executives did not have to revise their business models much from year to year.
That has changed, to say the least.
Peretti seemed to be on the right track with his reliance on sponsored posts to generate revenue before his reluctant pivot to banner ads last year. That money encouraged him to stick to his idea of creating free content that readers can’t resist sharing on social media. Hedging his bets, he varied BuzzFeed’s money stream by selling branded cookware in association with Walmart and opening a toy store in Manhattan.
The company’s revenue grew more than 15 percent in 2018 — not quite enough to stave off Peretti’s decision to cut about 220 of BuzzFeed’s roughly 1,500 employees.
As he put it in a recent staff memo, “Unfortunately, revenue growth by itself isn’t enough to be successful in the long run.”
Ben Thompson, an analyst who has become a favourite among the Silicon Valley set, argued that BuzzFeed had inadvertently devalued its content by mostly relying on the kindness of digital giants to distribute its articles.
Facebook’s changes to its News Feed in recent years increased the visibility of posts from your aunts and uncles while playing down articles from professional publishers. That was no good for sites like BuzzFeed.
“The only way to build a thriving business in a space dominated by an aggregator is to go around them, not to work with them,” Thompson wrote in his Jan. 28 newsletter.
Digital revolution? More like evolution
In BuzzFeed’s youth, Facebook was not the dominant traffic driver it is today, and online sharing was just as likely to occur away from social media platforms. (Remember email?) Five years into its existence, in 2011, the site got newsier, with the addition of Politico’s Ben Smith as its editor-in-chief, along with a team of editors and reporters. In 2015, Thompson, the analyst, called BuzzFeed “the most important news organization in the world.”
After that, Peretti adjusted his approach again. He determined that Facebook had already built the pipes for distribution, so instead of trying to amass audiences around a single venue, like BuzzFeed.com, he went where the audience was: Facebook.
That was back when Facebook was considered a natural ally for media organizations seeking millions of online readers, and before Mark Zuckerberg, its chief executive, was made to testify before sceptical lawmakers in Washington and Brussels.
So publishers didn’t balk when Facebook asked them — as part of its plan to take on YouTube — to go big on video. Companies like BuzzFeed, Vox Media and Refinery29 had an additional incentive to go along with Facebook’s request: the ad dollars that had shifted online as viewers started to favor streaming services over traditional television.
The plan proved difficult to monetise, however. Facebook wanted brevity, but it defied common sense to load a 15-second commercial in front of a 30-second clip, Peretti said in a November interview with The Times.
In 2017, Facebook created a new section, Facebook Watch, that featured longer videos. The company also opened more of those videos to advertising in August. For publishers, it was an improvement, but still not enough.
“They need to make a lot more progress to truly compensate for the value that media companies are creating for them,” Peretti said in the interview. He compared Facebook to cable operators like Comcast, which pay programmers to carry their shows. “Except the compensation isn’t like cable,” he added.
As television viewers continued their migration to the web, big TV companies like NBCUniversal, Turner Broadcasting and Discovery Communications followed them, plowing hundreds of millions of dollars into digital companies.
Now they would like to see a return on their investments. And they are getting impatient.
It wasn’t supposed to be this hard for digital publishers.
In 2011, when The Times drew criticism for its decision to charge online readers, creating a paywall, BuzzFeed was taking off, thanks to its knack for harnessing the power of social networks.
In that context, the paywall strategy struck media gurus as the last-ditch gambit of a slow-moving stalwart, and the conventional wisdom was that digital mastersmiths would soon outperform or perhaps even vanquish their print-beholden rivals.
By the end of 2018, the picture looked vastly different. BuzzFeed generated more than $300 million in sales, while still bleeding money, and The Times was on a pace to exceed $650 million in digital revenue.
A stormy sociopolitical climate played to the strengths of seasoned media companies. John Wagner, who handles ad spending for publisher properties for the media agency PHD, said that during the Trump presidency, advertisers had favoured venerable publications like The Times, The Washington Post and The Wall Street Journal. News sites of 21st-century vintage, on the other hand, have to keep proving themselves.
“BuzzFeed has really good offerings,” Wagner said. But its listicles and quizzes, he added, may eventually fall out of favour. “Consumers are fickle, and they’ll move on to the next thing,” he said.
VandeHei of Axios said media companies needed more than digital savvy to make it in the current cutthroat environment. “I think media is still a great business, if you run it like a damn business,” he said in an email.
VandeHei recited a litany of plagues on the digital houses, such as taking investments from venture capitalists expecting big returns in a short time or tying audience growth to platforms like Facebook.
With its reliance on sponsored newsletters, Axios has a business model wildly different from BuzzFeed’s. (“I’m an outlier,” VandeHei said.) But while a comparison of the two companies may not be apples to apples, the debate over journalism’s future comes down to which business model works better — or works at all.
Axios generated more than $24 million in revenue last year while incurring an overall loss of $56,000, VandeHei said. He credited a simple reason for its success: “The audience for high-quality content is huge and voracious and growing.” And the company’s focus on newsletters means it is unaffected by the whims of Facebook.
The Information, a San Francisco tech-news site founded in 2013, is another digital publisher that adopted an old-fashioned business model from the start: paid subscriptions.
“Journalism has been paid for since its early days,” Jessica Lessin, the founder and chief executive of The Information, said in an interview.
From her perspective, the tendency of news media executives to give their content away once they moved to the web was the result of something like amnesia.
“We just forgot,” she said. “We all went online and threw that out.”
Lessin, a former reporter for The Wall Street Journal, declined to disclose the exact number of readers who pay $399 annually, but said the publication had “tens of thousands of subscribers.” While that audience is relatively modest, it allowed her to double her staff last year to 26 journalists.
“Subscription is a great business,” Lessin said. “We are covering and expanding at the pace we want to expand off subscription, since that revenue can be very predictable.”
While BuzzFeed and HuffPost have remained anti-paywall, and Axios and The Information have depended on sponsorships or subscriptions, Vox Media has found a middle way.
Jim Bankoff, the company’s chief executive, is more business oriented than his peers and rarely calls attention to himself. A former AOL executive, he has explored areas outside of traditional advertising as part of his approach.
One result was a production agreement with Netflix for a series based on Vox’s explanatory journalism, “Explained.”
The company has also generated revenue by building its conference business, getting into podcasting and licensing its content management system, Chorus.
Last year, its revenue increased 20 percent to around $185 million, for a modest profit. But that doesn’t mean Vox has stumbled onto some wild innovation.
“We don’t see ourselves as a digital media company,” Bankoff said. “I mean, is anybody only just that now? We’re a modern media company.”
BCCI: The bank ‘that would bribe God’
“This bank would bribe God.” These words of a former employee of the disgraced Bank of Credit and Commerce International (BCCI) sum up one of the most rotten global financial institutions.
BCCI pitched itself as a top bank for the Third World, but its spectacular collapse would reveal a web of transnational corruption and a playground for dictators, drug lords and terrorists.
It was one of the largest banks cutting across 69 countries and its aftermath would cause despair to innocent depositors, including Kenyans.
BCCI, which had $20 billion (Sh2.1 trillion in today’s exchange rate) assets globally, was revealed to have lost more than its entire capital.
The bank was founded in 1972 by the crafty Pakistani banker Agha Hasan Abedi.
He was loved in his homeland for his charitable acts but would go on to break every rule known to God and man.
In 1991, the Bank of England (BoE) froze its assets, citing large-scale fraud running for several years. This would see the bank cease operations in multiple countries. The Luxembourg-based BCCI was 77 per cent owned by the Gulf Emirate of Abu Dhabi.
BoE investigations had unearthed laundering of drugs money, terrorism financing and the bank boasted of having high-profile customers such as Panama’s former strongman Manual Noriega as customers.
The Standard, quoting “highly placed” sources reported that Abu Dhabi ruler Sheikh Zayed Sultan would act as guarantor to protect the savings of Kenyan depositors.
The bank had five branches countrywide and panic had gripped depositors on the state of their money.
Central Bank of Kenya (CBK) would then move to appoint a manager to oversee the operations of the BCCI operations in Kenya.
It sent statements assuring depositors that their money was safe.
The Standard reported that the Sheikh would be approaching the Kenyan and other regional subsidiaries of the bank to urge them to maintain operations and assure them of his personal support.
It was said that contact between CBK and Abu Dhabi was “likely.”
This came as the British Ambassador to the UAE Graham Burton implored the gulf state to help compensate Britons, and the Indian government also took similar steps.
The collapse of BCCI was, however, not expect to badly hit the Kenyan banking system. This was during the sleazy 1990s when Kenya’s banking system was badly tested. It was the era of high graft and “political banks,” where the institutions fraudulently lent to firms belonging or connected to politicians, who were sometimes also shareholders.
And even though the impact was expected to be minimal, it was projected that a significant number of depositors would transfer funds from Asian and Arab banks to other local institutions.
“Confidence in Arab banking has taken a serious knock,” the “highly placed” source told The Standard.
BCCI didn’t go down without a fight. It accused the British government of a conspiracy to bring down the Pakistani-run bank. The Sheikh was said to be furious and would later engage in a protracted legal battle with the British.
“It looks to us like a Western plot to eliminate a successful Muslim-run Third World Bank. We know that it often acted unethically. But that is no excuse for putting it out of business, especially as the Sultan of Abu Dhabi had agreed to a restructuring plan,” said a spokesperson for British Asians.
A CBK statement signed by then-Deputy Governor Wanjohi Murithi said it was keenly monitoring affairs of the mother bank and would go to lengths to protect Kenyan depositors.
“In this respect, the CBK has sought and obtained the assurance of the branch’s management that the interests of depositors are not put at risk by the difficulties facing the parent company and that the bank will meet any withdrawal instructions by depositors in the normal course of business,” said Mr Murithi.
CBK added that it had maintained surveillance of the local branch and was satisfied with its solvency and liquidity.
This was meant to stop Kenyans from making panic withdrawals.
For instance, armed policemen would be deployed at the bank’s Nairobi branch on Koinange Street after the bank had announced it would shut its Kenyan operations.
In Britain, thousands of businesses owned by British Asians were on the verge of financial ruin following the closure of BCCI.
Their firms held almost half of the 120,000 bank accounts registered with BCCI in Britain.
The African Development Bank was also not spared from this mess, with the bulk of its funds deposited and BCCI and stood to lose every coin.
In Britain, local authorities from Scotland to the Channel Islands are said to have lost over £100 million (Sh15.2 billion in today’s exchange rate).
The biggest puzzle remained how BCCI was allowed by BoE and other monetary regulation authorities globally to reach such levels of fraudulence.
This was despite the bank being under tight watch owing to the conviction of some of its executives on narcotics laundering charges in the US.
Coast politician, the late Shariff Nassir, would claim that five primary schools in Mombasa lost nearly Sh1 million and appealed to then Education Minister George Saitoti to help recover the savings. Then BoE Governor Robin Leigh-Pemberton condemned it as so deeply immersed in fraud that rescue or recovery – at least in Britain – was out of the question.
“The culture of the bank is criminal,” he said. The bank was revealed to have targeted the Third World and had created several “institutional devices” to promote its operations in developing countries.
These included the Third World Foundation for Social and Economic Studies, a British-registered charity.
“It allowed it to cultivate high-level contacts among international statesmen,” reported The Observer, a British newspaper.
BCCI also arranged an annual Third World lecture and a Third World prize endowment fund of about $10 million (Sh1 billion in today’s exchange rate).
Winners of the annual prize had included Nelson Mandela (1985), sir Bob Geldof (1986) and Archbishop Desmond Tutu (1989).
East Africa celebrates top women in banking and finance
The Angaza Awards for Women to watch in Banking and Finance in East Africa took place Online via Zoom on 8th June 2021.
The event was set to celebrate the top 10 women shaping banking and finance across East Africa. The 2021 Angaza Awards, which will be a Pan-African Awards program, was also announced at the event.
Key speakers at this webinar were Dr Nancy Onyango, Director of Internal Audit and Inspection at the IMF; and Gail Evans, New York Times Best Selling Author of Play Like a Man, Win Like a Woman and former White House Aide and CNN Executive Vice President.
Dr Nancy Onyango advised women to deep expertise in their fields, spend time in forums and link with key players in that sector.
“Gain exposure with other cultures by seeking for employment overseas and use customized CV for each job application,” said Dr Onyango.
According to Gail Evans, women should show up and be fully present in meetings and not be preoccupied with other issues.
“Be simple and avoid jargon. Multi-tasking only means that you are mediocre Smart people ask good questions in a business meeting. Most women face drawbacks due to perfectionism, procrastination and fear of failure, said Evans.
She advised women to play like a man and win like a woman, be strategic, and intentionally make their moves to get to the top.
“For us to pull up businesses that have been affected by effects of COVID-19 pandemic, we need to re-invent business models, change the product offering and make more use of digital platforms,” said Mary Wamae Equity Group Executive Director.
Mary Wamae emerged top at the inaugural Angaza awards( East Africa) ahead of other finalists.
While women continue to excel in banking and finance, the number of that occupies top executive positions is still less.
“There is a gap for women occupying C suite level and it continues to widen in the finance sector. At entry level, there is still an experience gap for women,” said Nkirote Mworia, Group Secretary for UAP-Old Mutual Group.
She said that at the Middle Management level, women do not express their ambition. For this reason, UAP-Old Mutual has developed an executive sponsorship program to help women get to the next level.
Mworia added that most women hold the notion that top positions in management have politics and pressure.
“One needs leadership skills and not technical expertise to get to the top,” said Mworia.
According to Catherine Karimi, Chief Executive Officer and Principal Officer of APA Life Assurance Company, women need to focus on the strengths and natural abilities that they already have.
“Take risks and raise your hand to get to the high table. Find mentors along the way and develop your own brand and not compare yourself with others Focus on your strengths because it will make you move faster in the career ladder,” said Karimi.
Lina Mukashyaka Higiro, a Rwandan businesswoman and chief executive officer of the NCBA Bank Rwanda since July 2018, has three lessons for women who want to excel in banking and finance.
“Always spend at least 20 minutes each day reading, seeking genuine feedback from other staff members and widen your network,” Higiro told the webinar.
Women picked for Angaza awards
Mary Wamae, Executive Director, led this year’s Top 10 Women in Angaza Awards, Equity Group (Kenya)(2)Catherine Karimi, Chief Executive Officer, APA Life Insurance Company (Kenya)(3)Lina Higiro, Chief Executive Officer, NCBA Bank (Rwanda)(4)Elizabeth Wasunna Ochwa, Business Banking Director, Absa Bank (Kenya)(5)Joanita Jaggwe, Country Head of Risk and Compliance, KCB Group (South Sudan)(6) Millicent Omukaga, Technical Assistance Expert on Inclusive Finance, African Development Bank (Kenya)(7)Emmanuella Nzahabonimana, Head of Information Technology, KCB Group (Rwanda)(8)Judith Sidi Odhiambo, Group Head of Corporate Affairs, KCB Group (Kenya)(9)Rosemary Ngure, ESG & Impact Manager, Catalyst Principal Partners (Kenya) and(10)Pooja Bhatt, Co-Founder, QuantaRisk and QuantaInsure (Kenya).
The Kenyan Wallstreet, a financial media firm, partnered with Kaleidoscope Consultants to raise awareness of seasoned women shaping and influencing the sector through their organizations.
The Angaza Award criteria included assessing the applicants’ area of responsibility and contribution to firm performance. Professionals in Banking, Capital Markets, Insurance, Investment Banking, Fintech, Fund Management, Microfinance, and SACCOs were invited to submit their applications or nominations via the Kenyan Wallstreet Award Web page.
IFC in New Partnership to Develop Affordable Housing in Mombasa County
NAIROBI, Kenya, Jun 14 – International Finance Corporation, a member of the World Bank Group, has signed a new deal in support of affordable housing in Kenya.
The corporation has partnered with Belco Realty LLP, to develop a mixed use affordable living complex that will consist of 1,379 residential units and over 4,500 square meters of retail and commercial spaces in Kongowea, Mombasa County.
Together with the Kenyan firm, IFC says the partnership will help meet surging demand for housing in Kenya.
Under the agreement, IFC will help identify suitable international strategic partners to invest equity of up to $12 million, or Sh1.3 billion in Belco and to provide the company with the necessary technical support to develop the project.
The development, known as Kongowea Village, will be developed to foster inclusive and affordable community living within the city.
Jumoke Jagun-Dokunmu, IFC’s Regional Director for Eastern Africa says the project, which will be located on eight acres within the heart of Mombasa city, will aim to be a catalyst for wider city regeneration.
The project will be developed to meet IFC EDGE certification requirements and will incorporate the latest technologies in passive cooling, energy efficiency and water conservation to support sustainable urbanization.
Kongowea Village is expected to create 1,160 jobs and business opportunities during the three-year construction period and many more after completion of the project within the themed retail arcade.
“Access to quality housing is a growing problem in Kenya and across Africa,” said Jumoke Jagun-Dokunmu, IFC’s Regional Director for Eastern Africa.
“Developers often target the high end of the market, but this project is aimed squarely at the lower-income bracket. Helping Belco identify the right partners for this project is expected to attract more developers to Kenya and other parts of Africa to help meet rising demand for housing.”
“IFC‘s engagement with Belco will help Kenya support its rapidly growing and urbanizing population by increasing access to affordable housing. The problem is similar across most of Africa, where population growth and demand for quality housing are combining to outstrip supply. We are pleased to partner with a company such as Belco that is committed to contributing to solving this challenge,” said Emmanuel Nyirinkindi, IFC‘s Director for Transaction Advisory Services.
IFC’s partnership with Belco is part of its broader strategy to support better access to affordable housing in Kenya.
In 2020, IFC invested $2 million in equity in the Kenya Mortgage Refinance Company (KMRC) to help increase access to affordable mortgages and support home ownership in the country.