While media houses and legacy publications across the world are struggling to stay afloat and remain profitable, Nigerian startups are beginning to build out future media models that could provide widespread solutions for the ailing industry.
The name of the game is diversification. Whether it’s different products or different arms of the business, the revenue stream needs to be diversified. It is also vision. How does the way that you view a publication change the way you build and monetise products?
“The big idea was: can we build publications in niche spaces that are monetised efficiently and very effectively across multiple revenue lines, that can scale to be massive, influential publications?,” CEO Tomiwa Aladekomo, told Tech54.
The publication has grown steadily alongside the ecosystem, proving the demand for tech-led news in Africa. TechCabal’s newsletter is read by 50,000 people each day and the website has over 350,000 monthly hits. Opting for the high-volume model, Big Cabal Media, which also produces Zikoko!, makes around 30% of its revenue from advertising.
However, this is surprisingly low compared to industry standards, where counterparts rely almost solely on advertising. The remainder of the income comes from a thriving events and consulting business.
“The solution in media is to monetise the same product multiple times,” said Aladekomo. “The same editorial content can serve as the basis for a report, and as the basis for a series of live events.”
After moving past the minimum viable product (MVP) stage, the challenge for Big Cabal Media is “casting a wider net” to bring in readers from outside the tech landscape.
“Anyone in the business community who wants to understand how tech is changing industries and what impact the digital transformation is having on their business,” said Aladekomo.
Another publication making waves in the tech-media space is Stears.
The company was conceptualised by four Nigerians who were studying abroad in London but wanted to make investments back home in Nigeria. They found the process of investing extremely difficult due to a chronic lack of corporate information and data. What followed was an “information company”, said CEO Preston Ideh.
Stears Business, a subscription-only website that covers tech, was combined with Stears Data, a research, advisory and consulting business. The dual-pronged model allowed Stears to not only report on Africa’s budding tech scene but to raise capital as a tech company itself.
“Investors liked our unique business model,” said Ideh. “Seeing that data component, seeing that advisory component is a welcome edition. They saw another side to the business that could hedge risk.”
Last year, the company raised $600,000 in seed investment led by a Nigerian-based fund, local investors and Luminate, a philanthropic fund for media ventures. This year, Nigeria’s CcHUB invested in Stears ahead of their next funding cycle. It is a unique model that could be replicated across Africa.
The upfront capital allows Stears to take on the market in a fundamentally different way to normal media companies, Ideh says. For instance, it allows Stears to hire economists and industry players to report on economic matters alongside traditional journalists.
The spread of private sector individuals throughout both arms of the business also means that the startup thinks about content in a different way. During election day in Nigeria, for example, Stears Business created a visual representation of the vote backed by the latest data. The page attracted two million views, far more than would be possible by writing articles.
This article first appeared in African Business’s Tech54 bi-monthly newsletter. For more coverage on Africa’s tech sector, sign up here.