Expanding client reach is a central objective of MDIF’s work. From a mission perspective, our goal is to increase access to the free and independent information citizens need to participate in the economic, political and social life of their countries. For our clients’ reporting to have an impact on their societies, it must first be heard, seen or read by citizens. From a financial perspective, the larger a client’s audience share, the greater the likelihood that it will become a sustainable, independent business in the long-run. In certain situations, clients may first consolidate publications or implement other cost-cutting measures that decrease audience in the short-term, but in the longer term are likely to refocus on audience growth once costs have been stabilized.
The longer clients are involved with MDIF, the greater audience growth they experience. From years one to two,clients see a median increase of only 2% (on average 23%). After three years of working with MDIF, median reach increases by 12% and after five years by 33% (on average 82% and 136% respectively). Historically, 69% of clients see an increase in their reach while working with MDIF, with 38% doubling their audience or better. Across all clients, median reach increases by 22% from the beginning to the end of MDIF’s involvement with the company (on average 400%).
MDIF invests in independent media outlets with the goal of improving their long-term financial sustainability so they are able to protect the editorial independence they have so carefully cultivated. When financially sustainable, media companies are better equipped to fend off external pressures on their editorial decisions from politicians, oligarchs and other special interests. Media outlets with weak sales, on the other hand, are susceptible to economic pressure in the form of advertising boycotts, dubious asset seizures and other forms of financial intimidation and interference.
To assess our impact on client sales, we evaluate the change in sales over the duration of their involvement with MDIF. For the 57 clients involved with MDIF for at least two years, sales increased a median of 21% between years one and two. And for the 37 clients involved with MDIF for at least five years, sales increased a median of 115% between years one and five (on average 228%). The average year-over- year growth rate for clients over the first five years of their involvement was 25%. Across the entire portfolio, clients saw an average 10% year-over-year growth in sales from their first year working with MDIF to their last.
Central to MDIF’s work is the idea that media outlets with quality management, efficient operations and strong financial foundations are able to maintain editorial independence and weather market volatility. To assess our clients’ financial viability we maintain an official risk-rating metric validated yearly by independent auditors. For the purposes of our Impact Dashboard, the metric is composed of seven financial and operational indicators built using data from client business records. The indicators are weighted and combined to form a nine-point rating scale with nine equaling the highest possible risk and one the lowest. Clients with a risk rating of seven or above are considered high risk, those between 6.99 and five are moderate risk, and 4.99 and below are low risk.
In 2013, the median risk rating across our portfolio was 5.22, a slight increase from 2012 when the median risk rating was 5.07, but still within the moderate risk range. Portfolio- wide median risk peaked at 5.46 in 2009 when the global economic downturn combined with the digital disruption of the media sector put a significant strain on our clients. Since 2009, the global economy has slowly recovered and many of our clients have adapted to meet the challenges of digitalization. Through our Knowledge Bridge program we continue to provide our clients with the technical assistance they need to develop digital products, generate revenue online, and make informed decisions about their digital strategy.
Two of the most critical roles of independent media in society are to shine a light on corruption and to hold governments accountable for abuses of public trust. Historically we have evaluated our clients’ impact on corruption and accountability through ad hoc, in-depth case studies and short impact profiles. This year, for the first time, we have added a portfolio-wide element to our annual impact assessment process. To evaluate our clients’ impacts in these two areas, we conducted a survey, asking our clients if they had (1) exposed a corruption scandal or (2) reported on whether government officials had followed through on their promises over the preceding year. For those clients that had reported on either corruption or government accountability, we asked them to describe their reporting and its impact.
According to this survey, 87% of our clients exposed corruption scandals in their country. Through trenchant reporting, the media businesses MDIF supports uncovered sweetheart deals given to connected developers, extortion schemes organized by police, rigged food-inspection regimes and many other corrupt practices. Their reporting led to legal action and in many case broader policy changes across government bureaucracies.
The survey also revealed that 89% clients held their governments accountable for policy promises in 2013. Our clients revealed uncompleted infrastructure projects, failures to implement planned reforms and inadequate responses to natural disasters. For specific examples of client impacts, see the map on the next page.
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