Can the media maintain independence without relying on political forces or private investments? This has been a long-standing question, especially in small countries like Armenia, where editorials mostly rely on private investments and are often unaware of alternative financial streams for maintaining relative independence.

We spoke with Tsovinar Babayan, a business consultant and the head of the entrepreneurship program at the “Ardi” educational academy. We discussed funding sources that are interested in the media and provide cash flow for many international media outlets.

Meanwhile, Tsovinar Babayan suggests that Armenian media should broaden their perspective and reconsider their attitude towards media content creation companies. View the media as a larger entity, encompassing more than one focus.

“In many countries, including Great Britain, where media plays a significant role, the media is considered a part of the creative industry, defined by the United Nations to include advertising, films, publishing houses, some IT sectors, music, architecture, design, etc.

Those who finance the British media also provide financial backing to both filmmakers and game developers, and the creative output of these ventures is considered equally creative. To attract more potential investors, Armenian mass media should position themselves not only as  news platforms but also as creative companies,” suggests Tsovinar.

In addition, according to the expert, the international media works closely with the technological sector, making it possible to attract financial flows from the IT industry as well.

According to Tsovinar Babayan, European investors have long recognized the creative sector as a less risky investment than technology, as it tends to be more stable during economic downturns. Therefore, they have been increasing their budgets for these spheres.

Tsovinar Babayan has outlined the potential media funding sources.

1.National and foreign governments 

Tsovinar Babayan proposed considering the programs implemented by foreign governments aimed at developing the media. She noted that the USA and EU countries are interested in involving the media in expanding and strengthening bilateral relations, so they allocate a budget for financing media projects and media businesses with a sustainable development perspective.

2. Grants and Competitions

Media grants and competitions, including those provided by international organizations, can serve as alternative funding sources for media.

3. Private and charitable foundations

Private foundations are typically associated with a family name. They seek organizations that share their goals and values and finance those that align with their mission.

4. Crowdfunding

According to Tsovinar Babayan’s prediction, network investments and fundraising will be the most common methods of attracting financial streams in the future. Babayan explained that crowdfunding encompasses crowdinvesting and crowdsourcing, where the investor becomes a shareholder. The third type involves subscribers who not only pay but also provide content.

5. Corporate partnership

Corporate support for creative organizations, including media, has untapped potential. Encouraging more companies to sponsor local and regional media projects and businesses could be beneficial.

Corporate sponsors often have goals beyond charity when supporting media businesses. Benefits for sponsors include marketing, business development, PR, and corporate social responsibility (CSR).

6. Private equity

This is the most common funding source in Armenian media when an individual funds a media outlet or establishes his own media outlet. Tsovinar Babayan says this is indeed an acceptable method, but we all know its consequences for the media field and how it affects independence.

Babayan says that attracting private capital in the media can be done without compromising its independence. One such way is through business angels – individuals with available funds who seek platforms to invest in. According to Tsovinar Babayan, business angels can provide the necessary funds to establish a promising media business, especially in its initial stages.

There are 100-150 business angels in Armenia who mainly finance information technology startups and are gradually becoming interested in the creative sector. If a media company presents a business plan as a creative platform, as discussed in the beginning, these investors will at least consider the application for funding.

The longest-operating group is BANA Angels, which has made around 25 investments. The Science and Technology Angels Network, the Angel Investor Club of Armenia, and Hero House are among the many business angel groups in Armenia.

7. Venture funds

These organizations have professional management and more funding than business angels. They also have experience investing in media businesses in the West.

There is experience financing media in Latin America and Eastern Europe through venture funds. The investor becomes a shareholder but has no control over the content creation process. They wait for profitability or a high business value to sell their shares.

Tigranuhi Martirosyan