HOW TO MINIMIZE THE IMPACT OF THE COVID-19 CRISIS ON YOUR MEDIA BUSINESS
Article written by Harlan Mandel from the Media Development Investment Fund (MDIF).
Spanish, Russian, and Serbian translations can be found here.
The threat posed to media businesses globally by the coronavirus is existential. From the health dangers facing journalists covering events to the decimation of the events industry and the decision by brands not to place advertising next to stories on the virus.
At times like these, it is understandable that media managers, editors and owners feel powerless at the destruction of the economic foundations their outlets are built on. But while we can’t make brands advertise when they don’t want to or replace every live event with a webinar, there are steps news executives can take to limit the losses they are facing and to give direction to their business decisions.
These recommendations were created for MDIF clients, independent media in a range of countries where access to free and independent news and information is under threat, places like Guatemala, South Africa and Indonesia, but they apply equally to most media organizations in most parts of the world.
Cut Costs; Hoard Cash
- Build and manage your cash reserve in order to navigate the crisis that will dislocate your business model and financial projections.
- Schedule and conduct standing meetings with your core management team in order to assist with rigorous cash flow management.
- Reforecast your business with various downside scenarios. Reduce your revenue projections (intervals of 10% up to 50% reduction) and extend the impact on your core business (intervals of 3-months up to 18-months). Aggressive downside scenario is a 50% revenue reduction over 18-months; however, potentially not a worst-case scenario.
- Accelerate revenues through packages, incentives, discounts and/or prepayments.
- Manage accounts receivables, collect as much as possible from outstanding customers through strict collection policies and/or incentives and discounts.
- Execute on cost-reduction strategies that allow the business to maintain productivity while matching the demand of your product, audience and customers. Reducing operating costs in order to conserve cash is critical to the survival of your business.
- To the extent possible, negotiate the cost of inputs (supplies, raw materials, labor, etc.) and pre-buy materials at a discount when possible.
- Postpone all hiring and when possible reduce staff (this may be an opportunity for some staff to work part time as they care for children at home). Consider across-the-board temporary salary cuts as an alternative to cutting staff at this difficult time.
- Design and implement an internal crisis workflow for your staff and coverage for your audience. Measure and seek opportunities that will allow for your company to fulfill the current needs of your audience.
- Maintain accurate and updated financial and accounting records so that you have a complete and accurate picture when you need to make hard decisions fast.
Content Remains King
- This is the time to focus and grow your core audience, when they are most in need of reliable information. Delivering news and providing service to the community you serve is hard work; it takes tremendous discipline and focus to do so every day, but it is critical at this time.
- Stay ahead of what your audience wants and needs to know about the pandemic as daily life adapts to mass quarantines.
- Prepare for dramatically heavier on-line use by your audience. Are your systems and bandwidth adequate?
- Internal efficiency as well as content delivery and critical care with SEO and engagement will assure that waste is limited.
- Consider and evaluate partnerships that provide strength and security of your core assets – this is the perfect time to become a true partner with some of your best clients.
Your Team is Not Immune
- Plan ahead for how the pandemic will impact your team.
- Immediately require all at-risk staff (over 50, immune-deficient, pre-existing conditions, etc.) to work from home and shelter in place. Your senior management team and most seasoned journalists may be the most at risk.
- You will lose staff to quarantine or worse, so you need to build redundancy with your existing team. Train journalists and other staff to handle essential technical roles as best they can.
- Consider rotating staff between on-site and working from home. If one person on-site is diagnosed, everyone there may be required to quarantine, so have a team at home ready to come in and take over after the worksite is disinfected.
If I was to select one action from this list from our experience of supporting media during the last financial crisis, the most critical thing right now is to focus on cash collections to build a buffer as best you can and to start working on plans for contraction as revenue streams such as advertising dip and others, such as events, come to a complete standstill.
Following these tips alone might not be the difference between your business surviving or not surviving this crisis. But it might.
Harlan Mandel, CEO, Media Development Investment Fund