Potential in media industry remains untapped

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By Nyasha Chabururuka

THE media industry is by far one of the most complex industries in the business environment, especially in African countries, as it requires astute business acumen to survive.
Over the years, media houses around the world, and in Zimbabwe in particular, have been dogged by a plethora of challenges which have followed the centuries old English adage: ‘Survival of the fittest’.
Funding constraints and social constraints, among others, have also made the industry inaccessible to small players.
This article explores the various survival challenges in the media industry and the imperatives for competitiveness in the sector.
Some of the imperatives include opening up of the airwaves to competitive firms which are not cushioned by monopolies and an increasing mechanisation and technological innovation on the part of media houses.
Competitiveness is a relatively new term in the business environment; it was not mentioned in the Economic Structural Adjustment Programme (ESAP) document of 1990 which was handed down to Zimbabwe by the International Monetary Fund (IMF).
Until recently, competitiveness was regarded by the IMF and World Bank (WB) as essentially an exchange rate issue, which was seldom treated as a mainstream policy issue in Africa (except in South Africa, Botswana and Mauritius).
The World Economic Forum defines competitiveness as ‘a set of institutions and policies supportive of high rates of economic growth’.
When it comes to the media industry in Zimbabwe, the level of media houses’ competitiveness has been greatly affected by issues such as funding.
Funding remains one of the major challenges hampering the operations of media houses as the money generated from sales, of a newspaper for example, is much less than the cost of production of one issue.
According to media economists, sales account for a quarter of the costs of production of a single issue of a newspaper, with advertising revenue covering the rest of the costs and the bulk of the profits.
Due to a depressed business environment, media houses have to rely on funding from a parent company which funds the operations of the media houses whenever advertising revenue is low.
But this system has bred inefficiencies as profit leadership falls by the wayside and gives in to subsidies which result in the business operating at a loss or merely breaking even.
The lack of competition brings inefficiency both in pricing and in operation.
Media houses, particularly the press, have resolved this problem by forming clusters as a cost cutting measure as they acquire significant stakes in the media house itself, acquire the printing company which operates the printing press and manage their distribution channel by employing vendors who are managed by a head vendor.
With migration to digital, from the analogue system, there is vast potential for entrepreneurs in the media industry.
Despite efforts being made in the media to increase local productions, foreign content still dominates local space.
There are times when you look around and get surprised by what could have been if people, especially in business, had just taken off their blinkers and pursued the opportunities staring them in the face.
If only they did not think within the frame of the conventional box.
For the past two decades, some business ventures in the country have argued that the turbulent economic environment has been the major impediment to their growth, as most of the firms’ top managers have become pre-occupied with ensuring their survival more than chasing long-term profitability.
The media industry holds so much potential
Prof Richard D’Aveni, in his book Hyper-competition: Managing the Dynamics of Strategic Maneuvering, argues that competitve advantage is no longer sustainable over the long haul.
Advantage, instead, is continually created, eroded, destroyed and recreated through strategic manoeuvring.
The only way to control the future is to participate in shaping it.
Superior stakeholder satisfaction is the key to winning each dynamic strategic interaction with competitors.

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