Zim media struggle for survival

via Zim media struggle for survival 7 August 2014 by Wongai Zhangazha

ZIMBABWE’s media sector is going through harsh economic times as leading companies, Zimbabwe Newspapers Group (Zimpapers), Alpha Media Holdings (AMH), Associated Newspaper of Zimbabwe (ANZ) and the state-run Zimbabwe Broadcasting Corporation (ZBC), are forced to retrench, slash salaries and embrace convergence as part of cost-cutting measures to ensure survival.

Media houses, including AMH, are struggling to pay workers on time because of a growing gap between their cost structures and revenue bases in the context of structural changes on the media landscape, technological advances and a struggling economy.

All over the world, news media are in turmoil, grappling with demands to adapt to rapidly changing technological innovations and commercial models, as well their impact on their businesses. The way media gather, produce and distribute news and content is undergoing revolutionary changes which have disrupted old operational and business approaches, including the selling and consumption of news.

African countries, including Zimbabwe, have not been spared.

In Zimbabwe, ZBC – which has no local competition to talk about – has been particularly struggling to cope. The public broadcaster has even fallen months behind in terms of paying workers and accumulated huge debts.

However, part of ZBC’s multifaceted problems has been attributed to extended periods of mismanagement and malpractices like paying senior managers unsustainable extortionist salaries.

ZBC CEO Happison Muchechetere is currently suspended for mismanaging the state-run broadcaster. He was reportedly earning about US$40 000 a month, while his close colleagues got at least US$25 000.

In order to adjust and survive, AMH has since last year taken measures to cut costs through voluntary retrenchments, removal of some benefits and changing its business model by embracing technology and innovation. AMH has also restructured through convergence of newsrooms and consolidation of titles.

Although AMH is still going through a stormy transition, company chairman Trevor Ncube said this week he was confident it would survive the turbulence.
“We have to realise and accept that the world is changing as far as media and related businesses are concerned. The growth of the internet and online or digital media space is affecting how we do business,” Ncube said.

“We are seeing these changes here in Africa, including in Zimbabwe. Our consumers are now shifting online looking for content instead of getting it on traditional print. There are serious structural changes underway and we doing all we can to adjust and adapt by embracing technology and innovation to keep ahead of the curve.”

Ncube also said media problems in Zimbabwe must be understood in their context.

“The other factor in Zimbabwe is the economy which is the going through serious problems. It’s not the media alone being affected but all sectors of the economy; no sector has been spared. Manufacturing is virtually decimated, banking is facing vulnerabilities, agriculture has its own problems; every sector is struggling.

Companies are closing down and people losing jobs. This means readers can’t afford to buy newspapers as they used to. Companies also can’t advertise that much.
So revenues are going down. It’s not peculiar to AMH.
“What is important is what we are doing to address the situation. We are investing in a new business model based on technology – in other words we are becoming a technology company producing media content – and we are beginning to see positive results. We can’t go into details about these internal strategies but it’s working. I’m confident we are going to pull through because we are ahead of competition is responding to these challenges. However, it’s important that the economy must be addressed for businesses and people to properly function and survive.”

Zimpapers management this week told staff it was considering cutting their salaries by 20% and slashing some benefits.

However, workers are against the move demanding an investigation into the disposal of company properties, among many other operational issues.

In an unsigned statement to Zimbabwe Independent, Zimpapers employees demanded to know what happened to money raised from the disposal of properties that include Cambridge block of flats in Avondale and Jorosa flats in Selous Avenue in Harare, among other assets.

They also want to know why management was buying themselves expensive cars and hiring costly diaspora editors.
“What was the point of senior management giving themselves motor vehicle loans ranging from US$35 000 to US$100 000 recently when they foresaw operational challenges. This was despite the fact that last year the same managers gave themselves car loans which we want to know whether they were repaid,” the workers said.

Zimpapers CEO Justin Mutasa on Wednesday said the 20% salary cut was still a proposal. “The liquidity crunch has affected our businesses. There is a general decline in business and that affects readership; companies are also not advertising. Buying newspaper is now a luxury. People now have to deal with bread and butter issues first,” he said.
“The 20% salary cut is a proposal that was consulted on and the board has to approve that. It has not been imposed. This is a business strategy. Things would get back to normal if the economy improves.”

ANZ has also been responding to media changes through convergence of newsrooms. However, company CEO Sharon Samushonga could not comment on the current media situation.

“I find it very difficult for me to comment to a competitor saying this is how we have survived. You are a competitor.”

Media analyst Nhamo Mhiripiri said the problems facing the media reflect the current economic situation.
“The media is an industry like any other. It would be surprising if they would be immune to what is affecting other industries. What is going on is a true reflection of the Zimbabwean story where industries are struggling.”

Publisher Ibbo Mandaza said: “The media is such an important factor in our society. Worldwide the print media has been under threat from the electronic media and internet. Newspaper sales have dropped as readers migrate to the internet. We have a crisis which was however predictable. Streamlining might be the only way out as they are doing elsewhere.”