Lack of sufficient advertisement revenues and a private sector that is developing affect the financial sustainability of Rwandan media. These and other aspects of the financial status of Rwandan media were at the centre of the Media sustainability Dialogue, which brought together media managers and Rwanda Governance Board (RGB) officials on Wednesday, October 16. Kelvin Katuramu, CEO and Chairman of Capital Media Group, attributes some of the financial struggles to the fact that Rwanda’s private sector is still developing and is not in proper position to support the media through advertisement and so on. ALSO READ: Financial constraints, tech shift key challenges for media in Rwanda – officials Below are key facts to know about media financial status, sustainability, and working conditions in Rwanda according to the findings from the assessment of the financial sustainability of media houses and media associations presented during the meeting. 1. Sources of start-up capital, revenues The findings show that sources of start-up capital vary from one media house category to another. For public media, the start-up capital was fully provided by the government as it started as a state-owned media organ. For commercial and non-profit media houses, majority of them started with their own funds and grants from donors, respectively. For commercial media houses, the fact that most of them started with their own funds is an indicator that profitability is possible assuming the start-up capital is adequate, there is efficient management of the media house, a favourable business environment as well as the market for their products. In addition to start-up capital, media houses need to generate revenues to fund their daily operations. The findings revealed that advertisement is the main source of revenues for 89 per cent of media houses in Rwanda. ALSO READ: Inside Rwanda’s media working conditions Other significant sources of revenues media houses include program sponsorship (32.4 per cent), grants (32.4 per cent) and live streaming services (27 per cent). Although media houses largely rely on advertisement as a major source of revenues, they also argued that the advertisement market is currently very limited which results in insufficient revenues. This was confirmed by 64 per cent of owners/ managers of the assessed media houses who stated that they had accumulated debts relating to masts rental (65 per cent), taxes (42 per cent), staff salaries (30.8 per cent), bank loans (30.8 per cent), licence fee (26.9 per cent) and office rent (15.4 per cent). Some of the reasons highlighted for the limited advertisement revenues are low advertising culture, lack of systematic marketing strategies on the side of media houses, advancement in technology that enabled institutions to replace media adverts with digital systems that are convenient and cheaper. 2. Use of funds Most of the media owners/managers interviewed said that they primarily spent on staff salaries and benefits; purchase and maintenance of equipment; as well as taxes. Specifically, for commercial and non-profit media houses, licence and masts rental take a bigger part of their expenses. Based on data provided by 15 media houses, 51.7 per cent and 46.7 per cent of them made profits in 2021 and 2022, respectively. On the other hand, 35.7 per cent and 46.7 per cent registered losses in 2021 and 2022, respectively. Additionally, 7 per cent and 6.7 per cent of media houses managed to break even in 2021 and 2022, respectively. 3. YouTube offer potential revenue streams Kelvin Katuramu, CEO and Chairman of Capital Media Group, pointed out that platforms like YouTube offer potential revenue streams for traditional media houses, but there is need for sustainable daily operations to make such ventures profitable. 4. Income status of media houses It is worth noting that a big proportion (61.5 per cent) of the assessed media houses were not able to provide information related to their financial situation. Therefore, it was not possible to ascertain their actual status in terms of profits or losses. Respondents highlighted that some owners of media houses use gained profits in other businesses unrelated to the media outlet instead of reinvesting for the growth of the media house. 5. Salary status According to research by Rwanda Governance Board (RGB), the government body overseeing the media sector, 19.2 per cent media houses paid over Rwf500,000 monthly salary per journalist while 43.8 per cent of journalists earned less than Rwf200,000. About 16 percent earned a monthly salary of Rwf100,000 or less. 6. Private radio stations in debts By the end of 2023, at least 23 private radio stations owed state broadcaster RBA a total of up to Rwf1.5 billion in unpaid mast rental fees. This is just part of the debt burden that radio stations are facing, which is significantly impacting their sustainability. 7. Employment contracts On average, 56 per cent of staff employed across all sampled media houses had employment contracts of over three years. The public media has the highest number of staff with such contracts (84.1. per cent) compared to commercial (47.8 per cent) and non-profit (38.6 per cent) media houses. The assessment revealed that about 28 per cent of journalists in all media house categories have contract types (e.g. verbal, part-time) which cannot guarantee stability of both the journalists and the media house. 8. Payment of social security and taxes for staff The labour law stipulates that employers must pay social security and employment related taxes for their staff. Failure to comply with this obligation exposes defaulters to sanctions for tax evasion and for jeopardizing the wellbeing of the employees. In general, about 77 per cent of media houses comply with the obligation of paying social security contributions and Pay As You Earn (PAYE) for their staff. However, there is a significant percentage of media houses that do not comply with this obligation, thus, being exposed to related penalties and jeopardizing employees’ wellbeing.
