Digital Publishing
4 mins read

Investing in sustainable media businesses: Insights from the MDIF

This week, we hear from Mohamed Nanabhay, Deputy CEO of the Media Development Investment Fund. He talks about his work in the early days of online publishing bringing ‘new media’ to Al Jazeera, how the MDIF decides which businesses to invest in, and why he thinks the pandemic has provided an opportunity for independent media to thrive.

Their latest initiative, MDIF Ventures is accepting applications now for media companies located in countries where access to free and independent news and information is under threat. Find out more here.

In the news roundup the team discuss whether Apple’s changes to privacy will impact publishers who depend on newsletters, ask what led to The Sun being classed by Rupert Murdoch as a worthless asset, and ask if now is the time to slip half-human half-animal hybrids into the public.

The full transcript is live here, or see below for some highlights:

Introducing ‘new media’ at Al Jazeera

I put together the most amazing cross-disciplinary team of developers, journalists and business development people. And everybody was super young and super excited about what the internet would bring to the media industry.

This team went on to pioneer what then we called ‘distributed distribution,’ where we use emerging platforms to get Al Jazeera content out to new and often younger audiences.

Right now, describing this, it seems uncontentious. Everybody does this. But back then it was quite revolutionary.

The Media Development Investment Fund’s background

MDIF was born as a bank for media companies to provide loans to people who are putting up printing presses, buying radio studios, and so on. And the model turned out to be successful. There were a group of media companies that were independent doing journalism in the public interest, were financially successful, paid back the loans, MDIF recycled the money.

What struck me when I started learning about MDIF was, it was this organisation that had this marvellous ability to adapt as the media landscape changed. So started doing loans, but when the business environment started changing, they started moving from just doing loans into doing equity investments into these emerging media companies, taking equity stakes. And as the world went online, they started helping their existing clients transition to digital, started doing investing in online media companies that were starting up.

So really being able to, as a funder, adapt what their clients over time and provide solutions to them.

Assessing businesses for funding

We design our process so from the time when we start assessing a client, we hope we’re providing value to them. So even our business assessment is something where even if we don’t make the investment, it helps them along their journey as a company.

But what’s important about the way we work is, because we’re a nonprofit, and we have a mission, we do a programmatic screen upfront. So we look at a company, and we have a set of eligibility criteria, and we’ll say, you know, is this company providing quality news and information? Is it in the public interest? Is independent of government, larger business interests, and so on. So we might do a content assessment to look at the journalism.

Once it meets that screen, our board of directors says yes, this passes the eligibility criteria of MDIF, then we’ll get into a business due diligence, and we’ll start looking at the product, the product plans, we’ll start looking at how the business is operating, and what they might need the funding for. And then work with them, eventually, when we do the investment to help them realise their goals and aims.

On being more than the money

So we’ve got an advisory service internally at MDIF, where we provide consulting to them, we bring our client base together, we offer a lot of peer learning to them, so things that our clients in Indonesia learn can sometimes help a client in India and help a client in South Africa, and so on.

So we really try to think about not just being money, but also bringing expertise to bear and bringing assistance in other ways to bear in our clients.

The opportunities for publishers post-pandemic

It might sound slightly callous, but if we’re looking for an upside in the pandemic, and it’s really hard to grasp one, given what’s been wreaked on the world, but many media companies have finally had to deal with having unsustainable cost bases. The pandemic forced forced things to become apparent for everyone involved in the business. I think a lot of people just weren’t seeing it, or didn’t want to see it.

But I think what it did was, many organisations quickly looked at the cost base, they had to do the restructuring that maybe they were thinking about doing for a long time, but just couldn’t do or couldn’t get buy-in to do. And I think some of them will come out stronger for it. They’ll come out as leaner companies, they’ll come out focused on managing the cost base, making sure that tracks with revenue.