African news service thrives as cooperative

Justin Arenstein never really wanted to work for a big corporation, but that is how he started out in journalism. He was a reporter working on contract covering one of the desperately poor shantytowns of his native South Africa.

He and his colleagues ran afoul of corporate management by covering the death squads that were assassinating black activists opposed to apartheid. They quit en masse and decided to start their own news organization, which was the beginning of what is today the African Eye News Service.


African Eye functions as a cooperative, with each reporter keeping half of the revenue generated by his or her own stories and the rest going to support the enterprise. Launched 18 years ago, it has 15 full-time journalists and a network of correspondents covering six countries -- South Africa, Zimbabwe, Mozambique, Swaziland, Tanzania and Malawi. It has gained a reputation for editorial independence and aggressive investigative journalism.

Arenstein, 40, is publisher and his life partner, Sharon Hammond, is editor-in-chief. They are classic entrepreneurs who taught themselves the business side of journalism so that they could remain independent. 

Arenstein has learned some lessons the hard way. One mistake of African Eye was buying a group of magazines just before the financial crisis hit and advertising revenues plummeted.

Arenstein prefers not to talk about current revenues, but in an interview last year (in Spanish, here) he stated that the organization generated about $2.5 million USD annually.  

An unusual business model

The articles produced by reporters are offered to non-competing media -- newspaper, magazine, television, radio or digital. Media that want to publish a piece on their related websites have to pay a 20-25 percent premium. "That means we can sell each story a minimum of five different times and we generate more income for the journalists than they could on their own," Arenstein said. Reporters earn about $2,500 to $3,000 USD after taxes, much more than they would make at a mainstream news outlet.


The cooperative, based in the rural province of Mpumalanga, South Africa, uses its half of the story revenue to cover the cost of a central editing team, administration and capital investment, mainly computers and electronic equipment.

African Eye does not publish its work on the Internet so as not to compete with its clients. The cooperative is also aggressive in defending its copyright against sites that republish the work of clients without authorization. So far, the Internet has not undermined the business model. Digital clients represent only about 15 percent of the business. The cooperative also owns a 10 percent interest in an FM radio station, MPower.

African Eye publishes in English, but its reporters bring knowledge of 11 different languages. 

A career path

Arenstein is proud of the fact that many of the editors and reporters of major media in the region have been groomed as reporters at African Eye. He recruits talented people from rural areas and puts them through a rigorous process of training. 

These apprentice correspondents -- there are 20 now, down from 40 before the worldwide financial crisis -- receive pay for stories but do not have access to the cooperative’s facilities and resources. After eight or nine months, if they do well, they get access to resources and receive more training. The best can become full-fledged reporters with the service.

African Eye’s reporting has brought down two provincial governments, sent senators and cabinet members to jail for extended terms and forced the government to disband its 300-year-old militia because of its use of torture, Arenstein said with pride in an interview last year.

Technology

Arenstein is experimenting with new ways of delivering news, especially to mobile telephones. So far, his clients have not been very successful selling a news service delivered to mobiles. 

African Eye has begun offering its clients more data-driven reporting and interactive computer graphics. These graphics give clients and readers a deeper insight into the news, Arenstein said.