Washington, DC
JEANNE BOURGAULT: My name is Jeanne Bourgault, and I'm the president of Internews. And I want to welcome and thank you for joining us today as we launch a really powerful public private partnership, the Media Viability Accelerator. This is a tool that we aim to deploy to tackle a true crisis facing democracies all around the world, the financial collapse of the news industry. Now, I don't need to tell this room why the news industry is so important to democracies. I don't think I need even tell this room why the news industry is facing a financial collapse. I think we're all feeling it viscerally, even here in the United States, where one in five citizens are living in the news desert or in a community that is about to become a news desert. There's never been a more important time to invest in news strategies to help the news industry turn this around. So enter the Media Viability Accelerator.
The MVA is a web based platform that will help low resource news media around the world become more financially sustainable by providing free market insights, data and collaboration tools all designed to inform more effective, nimble strategies that engage news audiences and help adapt to changing markets. We're going to dig into the details of the MVA in a few minutes with our amazing panel. But first, we have two very special guests who are going to launch this session, two extraordinary leaders that really need no introduction. The Vice Chair and President of Internews Brad Smith and the –
BRAD SMITH: I think I’m still at Microsoft, but –
MS. BOURGAULT: Wow, what an extraordinary start. And the Administrator of the U.S. Agency for International Development Samantha Power. Thank you both for being here. All right, I'm going to jump to you, Brad. First, just talk to us about Microsoft and your interest in independent media, in general. And I think for right now, like, why is this feeling so urgent that you're leaping into this space?
MR. SMITH: Well, I would start with two propositions that don't need much explanation. And I think you really hit the nail on the head already. Democracy rests critically on healthy journalism, and journalism is under threat. Those, I think, are two things everybody in the room understands. I think what is maybe more interesting to think about is why should Microsoft or any company use its voice and its resources to do something about this? And I think there's two aspects that are worth thinking about. First, I think it is not only right and proper, but essential that businesses and people in business stand up for and help defend and promote healthy democracy. First, because people in business are people. We leave the office, we have families, we have homes, we're parts of communities. And when we can vote, when we have freedom of expression, when we have the freedom to think and even the freedom to argue with each other, we have better lives as people, as families, as communities.
But second, I think this is an important moment in history for people in business to stand up and actually say that business is good for democracy and democracy is good for business. And let me explain why. First, I think democracy is good for business because business depends on innovation. It depends on creativity. It depends on the ability of people to try new things without fear of retribution for simply speaking their mind. And that's what democratic societies enable. And I'll also argue that businesses are good for democracy, the kind of innovations that we bring lead to economic growth, and they in turn lead to healthier democracies when it works well. Now we sometimes have market failures, which is what we're dealing with today. But I really hope that at a time when, frankly, there's more political pressure on businesses, at times, to speak out less rather than more, I think it's essential that in the United States and around the world, we sustain a consensus and a conviction that businesses should stand up for democracy.
MS. BOURGAULT: Hear, hear. Cheers to that. Administrator Power, talk to us a little bit about USAID's approaches and programs, including the Media Viability Accelerator, but broadly how you're addressing the crises facing journalism and news media today.
ADMINISTRATOR SAMANTHA POWER: I could not be more grateful to Brad and to Microsoft not only on this initiative, but basically my experience in this job is that when we have an idea for how to do something in the world that is going to make an impact, that we call Microsoft. There is a lot of enthusiasm to partner. And what's great is not only is that the kind of philanthropic and, you know, citizenly mindset that exists there, and at other companies as well, but it's rooted in the recognition that Brad just articulated so forcefully, which is the business case for economic development or digitization or climate change adaptation or, here, the strengthening of democracy. And that it’s that voice also and that catalytic power that companies like Microsoft have that matter so much. So it's not, Jeanne, people like you and me preaching to the choir on the importance of independent media, but it's actually saying, hey look, we in the private sector, we have an interest in showing up in material ways. And so I just – I'm incredibly grateful for that.
So first, before talking about what I think we can do and what the Media Viability Accelerator will do, which you've already alluded to – just to stay in the darkness a moment longer. You know, I think it's – we have the data to show the importance of independent media in actually just improving citizen welfare. And again back to one of Brad's points, in communities that have stronger local media, citizens are more likely to engage with the local government and more likely to vote. And what's correlative and what's causation we can leave to the social scientists. But again, the data shows elected officials become more responsive and efficient, and on average, cities are financially healthier. So again, you know, which comes first, the chicken or the egg, not clear, but these things have to go together.
Independent media, of course, has long been talked about as a public good, and it's really only what some are calling a media extinction event that is upon us, that is drawing more public sector and private sector attention to the need for sustainable business models for independent media all around the world and local media. Because what you now have is digital platforms, which I'll talk a little bit more about the second, entertainment platforms, capturing more and more of the advertising and subscription revenue. And if you look at even just Facebook and Google, they captured half of the total global digital advertising spend in 2020. And if you look at their news feeds and TV newscasts here in the U.S. are losing, now, nearly $2 billion each year because people are getting their news, again, via these digital platforms instead.
So you talked about the deserts and the effect that that has when people don't have access to local news, but basically we see global advertisers staying away from markets in the countries where USAID works – that is very vulnerable countries, often, or developing economies. And so as Brad said, that's something of a market failure here. The market trends are fairly straightforward, but we are not passive in the face of those trends. And I think that's what makes the Viability Accelerator really, really exciting. And so let me give you just a couple examples before turning it back to you.
So Moldova, a place drowning in willful misinformation, USAID launched something called a Media-M Initiative, where we worked with local media outlets to develop a membership system, to increase subscription sales and to improve marketing strategies. And I met with the people who worked at the independent media that were making use, again, of this technical support, and what we've seen is over the past three years, this effort, this intentionality, has increased the outlets revenue who've been, again, aided by this program, increased revenue by 138 percent and online reach by an average of 160 percent. And indeed, one of the outlets that we're supporting in this way was the most visited outlet in Moldova right around the time that the pandemic started, as people sought out fact-based information. And indeed, about a quarter of all registered internet users in Moldova accessed one of these outlets, again, benefiting from this market orientation.
I'll give you another example. In Nicaragua, which is, of course, now notorious for attacks on the media. There is a really important outlet called La Prensa, which was brought to the brink of collapse by concentrated government pressure. You saw fines levied against La Prensa. You saw paper and ink and other supplies that were being imported, impounded, causing La Prensa basically to suspend and lose out on the essential revenue that print media was still offering. And then, of course, arrests, including of the general manager and the flight of staff to neighboring countries. So as a result of all this, La Prensa moved entirely online, but they had very little experience making that transition. And so what we did is we conducted a detailed assessment of the business structure, [inaudible] because they need to think about business models, think about making money, not just making money, but these private enterprises. And we provided a fusion of emergency cash assistance, which was important, I'm sure, in the short term. But much more importantly and enduringly, we sat down and worked with La Prensa to work through what a plan around significant restructuring to stabilize the financial situation would look like. And then with assistance from our partner News Gain, La Prensa focused on improving its website. It focused on using new software with better information on audience, on click rates, on sales data, and then tailoring what they were doing on the basis of data.
I mean, again, these outlets are getting shuttered all around the world, either because of political pressure or because of market forces, but we don't all have to be bystanders in the face of those trends. And what we have seen, again, we haven't really scaled this – and we hope with the Viability Accelerator that we'll be able to do so – is that this kind of planning around who your target audience is, how you seek advertisers in a more sophisticated way, how you show to those advertisers the benefit of actually investing in these sites, you know, can make a major difference.
The other thing, last thing I'll just say is an example of what we're doing and a kind of fresh approach I was just talking to Brad about offline is one of the corrupt actors or the oligarch or the repressive leaders tools, sort of new tools in the toolbox here in the twenty-first century and especially in the last five years, is the lawsuit against the plucky independent media or local news outlet or even an anti-corruption organization that is doing an investigation where people with a lot of money have an interest in keeping that money and in keeping sunlight away from what they're doing. And so we've actually just launched something called Reporters Shield, which is an insurance fund for journalists doing work that is politically perilous. And journalists will be able to buy in. It's basically a global public good because it's in everybody's interests, as we’ve discussed, for the independent media to not only survive, but to thrive. And so we're trying to resource that now. We're making an additional USAID commitment, and we brought in some foundation partners at the beginning.
But imagine, again, a journalist who just knows the bargaining advantage that the corrupt actor has and the ability that that corrupt actor has to throw money at the problem. What does the journalist do in the face of that and how does that – how do we create, again, a model where journalists can sustain themselves as they do this work that we know is so critical for our societies?
So the last thing I'll say is, just in the face of this so-called mass extinction event, we need so much more than what USAID or any donor or development agency or country can do. We're thrilled to have Microsoft and Internews using, respectively, their business acumen and media acumen to scale this, but we have a mindset here, at USAID, now which is progress beyond programs. So we have a program now that is enshrined in this Media Viability Accelerator. But the question is how do we catalyze others? How do we leverage the financial resources and technical knowledge, you know, of companies like Microsoft, of organizations like Internews? How can we crowd in other actors to support this effort, given as Brad articulated at the society-wide interest we all have in sustaining this form of accountability and this check and balance that is so vital to all the other needs that a society has. And so that's the call to action, in closing, which is we need more partners. This is a true partnership from the ground floor between government, civil society and the private sector. And yet we're only getting started. And so would love folks who are in the room there to talk about this. We have five other organizations that have pledged technical financial support for this initiative, but we are looking for more partners to join us. And I think it's a chance to be a part of a really cutting edge effort internationally, but one, of course, that has really resonance given the needs of our own democracy. So thank you so much.
MS. BOURGAULT: Thank you so much for joining us. And I totally agree with that, intentionality can really make a huge difference and let's go beyond the program to really make some real progress. I want to note that La Prensa is in the room. We're very grateful to have a representative from there. I know you both need to run quickly. Brad, if I could have one more question for you. I just want to check on a time check. We're thrilled to have Microsoft as a partner. You know, we're pretty good technologists, but I'll say it's comforting to have Microsoft as a partner. Can you talk a little bit about how your team is engaging with the Accelerator? And even if you want to go broadly about how your products are supporting the news media, but like whatever, you have time for.
MR. SMITH: Sure, let me just offer a few thoughts. And I know Tracy Hudson from Microsoft is in the room and will be part of the panel that will follow. But first of all, I just want to say thank you. I mean, USAID is really the one that is making this happen; Internews is making it happen, and we at Microsoft are supporting it with the kind of technology and data tools that I think can help media organizations become more successful.
I do think it's worth reflecting on the fact that most, not all, but most media organizations actually are businesses. And that means that they at least need to ensure that their revenue is equal to their costs and maybe even exceeds it. And if you look at the history of media around the world over the last 50 years – you were just touching upon it a moment ago. Let me just remind us all of just the U.S. data. It's better and worse in some ways than some other countries. But over 50 years, the United States subscription revenue for U.S. media organizations – newspapers – has gone from 10 billion to 11 billion. So it hasn't kept pace with inflation, but it at least has kept pace with itself nominally. Advertising revenue for newspapers have gone from $50 billion to $10. So, in effect, $60 billion of revenue have been turned into $21 billion of revenue. What do you do when you lose two thirds of your revenue? You cut two thirds of your costs. That's sort of this fundamental market challenge and I'll even say market failure given how important this is.
And so I just don't think that the media can cost cut its way out of this problem any further. It's got to find new ways to grow revenue. And as you are hearing, that requires data and it requires insights that can come from data and that comes with the tools that exist today, like our Cloud services: Azure, our data intelligence platform: Power BI. It'll be even better in the future with the assistance of A.I. and then the ability for successes to spread using technology as a platform so people can learn from each other.
And in closing, what I'll just say is, in some ways what I find is the most important and to some degree, even the most powerful and inspirational, is I feel that the fundamental strength of every democracy was in some ways captured the best, interestingly enough, by a book entitled, "Democracy in America," written by Alexis de Tocqueville. And even though it was written almost 190 years ago, what he fundamentally captured was that democracy in America and in most democracies is a three legged stool. It is the public sector, it is the private sector, it's the business community, and it is civil society, it is the nonprofit sector. And a lot of times within a democracy, we spend most of our time, frankly, talking about the tensions between the three legs of the stool. But what sets us apart from the world's authoritarian governments is the power of each leg. And when we find the way to build on each other, which the MVA is all about, that is how we sustain democracy in America and around the world. And so for us to be a supporting actor, I will say, as part of this three legged stool, this is just extraordinarily important to us, and we couldn't be more happy and excited to be part of this initiative.
MS. BOURGAULT: I want to thank you both. Brad, I want to thank you for your long leadership in the news and information space. You might not remember it, but way back in 2000 you and Microsoft were some of the first supporters of civil society getting engaged in internet policy. We've all come a long way, along those lines. Ambassador – Administrator Power, thank you. You're an inspiration for journalists all around the world. And I want to specifically thank you for taking time to meet with local media in many of your visits to partner countries. It is noted and very much appreciated.
Thank you both for joining us and for joining forces to help us save local news.