Home to one of Africa’s most dynamic media markets, many of South Africa’s leading media houses trace their roots back many decades. However, the end of apartheid created a new era of freedom in which independent voices have blossomed. There is a diverse range of outlets, from popular tabloids and serious business publications establishing an international presence to niche blogs that are seeing rising traffic. A population of over 50m and economic growth provide sound fundamentals. Technological changes can be challenges for traditional outlets, but also provide opportunities for those willing to innovate. “The audience for mass media is massive,” said Phillip de Wet, associate editor of the Mail & Guardian newspaper. “The emergence of mobile digital media in particular offers a lot of potential.”
Fit To Print
Total major newspaper circulation, including dailies, weeklies and weekends, was 3.997m in the third quarter of 2012, down 5% on 4.209m in the same period of the previous year, according to Print and Digital Media South Africa (PDMSA), an independent industry body. Circulation of dailies averaged 1.367m, down 9.1% from 1.504m, while weekends fell 3.6% to 2.045m from 2.121m, but weeklies slid only 0.1% to 583,918. It is worth bearing in mind that daily circulation can fluctuate considerably – big stories will boost sales for several days at a time. South Africa’s newspaper market is dominated by three main players: Media24, the Independent Group and Times Media Group (TMG)/BDFM.
Media24 is the print media wing of Naspers, a media company listed on the Johannesburg Stock Exchange (JSE), which has interests in a number of other countries. Media24’s share of the daily and weekend newspaper markets was 44.1% and 40.1%, respectively, in the third quarter of 2012, and an overall market share of 36.3%, including weeklies.
Independent News & Media South Africa (INMSA) is another major newspaper company. It had a 27.2% share of the daily and 22.4% of the weekly newspaper market, with an overall share of 21.9%. INMSA is in the process of being acquired by a consortium led by Sekunjalo Independent Media, an investment company, from Ireland’s Independent News & Media for around R2bn ($243.8m). The sale is controversial as Sekunjalo is reportedly close to the ruling party, the African National Congress (ANC), and the bid is also being backed by the Government Employees Pension Fund, which has a 19.5% stake in INMSA rival TMG. The bid is also supported by the Congress of South African Trade Unions, which is the investment arm of the trade union federation and part of the ruling alliance alongside the ANC.
TMG is a public company listed on the JSE, and in April 2013, it struck a deal to take full control of BDFM, buying the 50% stake owned by UK-based media company Pearson. The company had a market share of 23.9% of dailies and 31.1% of weekly newspapers, giving it a total newspaper market share of 24%. Other players include Mandla Mata, with a 5% overall market share; the Mail & Guardian, with 1.2%; and CT Media, with 9% through its Soccer Laduma weekly, South Africa’s biggest association football newspaper.
South Africa’s biggest newspaper by circulation is the tabloid Daily Sun, with an average 336,319 copies shipped daily in the third quarter of 2012, according to PDMSA. The Daily Sun sells over twice as many copies as its nearest rival, TMG’s flagship The Times, with a circulation of 140,078. In third place is INMSA’s Zulu-language Isolezwe, with 107,628, followed by The Star (105,686) and TMG’s Johannesburg-centred Sowetan (101,155). These are the only five newspapers to break the 100,000 average daily circulation barrier; Media24’s Afrikaans-language Son dropped beneath it in mid-2012. All the top English dailies saw circulation shrink in the same year to the third quarter of 2012 – the Daily Sun by 10.2%, The Times by 1.2%, The Star by 22.6% and the Sowetan by 13.1%.
To an extent these figures reflect the falling circulation of English-language newspapers and the relatively healthy performance of local-language press, though only The Times dropped less than the daily market as a whole. It appears that rising competition is eating into the leading publications’ print circulation more than those of smaller outlets, but this may also reflect the stronger online presence of the top papers.
In the weekend newspaper market, TMG’s Sunday Times had a circulation of 451,686 in the third quarter of 2012. Media24’s Afrikaans-language Rapport ranks second, with 220,494, and is followed by the Sunday Sun (199,183), TMG’s Sunday World (141,260), Media24’s City Press (125,148) and Independent’s Isolezwe ngeSonto (84,577). Isolezwe’s Saturday edition also ranks in the top 10 weekend newspapers, with a circulation of 73,187. Circulation fell for all the major weekends in the year to the third quarter of 2012.
The weekly newspaper market, not including weekend papers, is dominated by Soccer Laduma, which has a circulation of 360,668. Bucking the market trend, the paper saw circulation grow by 17.5% in the first three quarters of 2012. The only other weekly crossing the 100,000 mark is Ilanga, a Zulu-language paper published by Mandla Matla, with 124,400 copies sold a week.
South Africa has 11 official languages and a substantial market for non-English-language publications, particularly in Afrikaans and Zulu. Media24 is the leader in Afrikaans dailies, with a circulation of 248,307 for its dailies alone: Son (94,610), Beeld (70,070) and Burger (61,817). As mentioned, Rapport is the country’s second best-selling Sunday newspaper. “The Afrikaans press is holding its own after a couple of torrid years,” said De Wet. “Talk of its demise is exaggerated – there is a growing young market.”
According to De Wet, Isolezwe is part of a “battle for Zulu language space, for which there is enormous pent-up demand”. While there is considerable discussion of the space for newspapers in other local languages, De Wet says the populations tend to be too small and dispersed, with the possible exception of Sotho. However, the development of online news, which obviously does not have the same distribution costs, suggests that there may be a future as more gain internet access.
TMG’s buyout of Pearson’s 50% stake in BDFM, known patriotically as “Project Springbok”, fulfilled the South African company’s ambition of more than a decade and a half, Peter Bruce, BDFM publisher and editor-in-chief, told the local press. With Pearson under new CEO John Fallon since January 2013, the long-mooted sale was able to go ahead. Following the deal, outlets including the African Business Channel, which owns Summit Television, another business channel, Business Day and the Financial Mail, will be under TMG’s full control. The firm has stated that it sees the media market as going through fundamental Top five daily newspapers by circulation, Q3 2012 changes, which will require investment, innovation and tough decision-making. It is now in a stronger position to push through its vision for BDFM.
Certainly, the company faces challenges; Business Day fell 40% behind budget after its revenues were hit by changes to rules on publication of JSE financial notices, which relaxed the requirement for detailed announcements in the newspaper. However, Business Day’s website, BD live, has done well, reporting more than 507,000 unique browsers per month. BDFM will continue its cooperation with the London-based Financial Times (FT), which includes content syndication and training.
With its range of outlets in different media and strong internet presence, TMG hopes to step up its “digital transformation”. It also aims to develop BDFM’s television offerings. The company will likely use digital platforms more for its outlets, boosting the synergies between them, while looking to leverage economies of scale.
Restructuring at TMG will also see parts of the company sold off. In early 2013 the company labelled its subsidiaries Gallo Records, cinema chain Nu Metro and book retailers Exclusive Books and Van Schaik “non-core” assets, and began selling them off. TMG is also likely to push forward with BDFM’s strategy of becoming less dependent on advertising – demand for which fluctuates depending on the economy’s performance, as a slowdown in recent years indicates – and earning more from customers accessing its outlets’ content.
In May 2013 Business Day introduced a pay-wall to its online site, BD live, limiting the number of articles that can be viewed without registration, and requiring a paid subscription to view more than 15 articles in a month. Steve Matthewson, the managing editor of news at Business Day, told OBG that he expected the paywall to “push intense users towards subscription.” The paywall model that has been adopted by Business Day is similar to that used by major newspapers the FT, Wall Street Journal and Spain’s El País.
The subscription model will also allow Business Day to generate a more detailed profile of its readership, helping its advertisers to target specific demographic groups with considerably greater precision. “The advertising market is cyclical, and the downturn has put enormous pressure on revenues. We need to get over the idea that digital content should be cheaper than print. If it’s good quality, people will pay for it. In 2010 the FT’s content revenue overtook advertising earnings. We want to do the same, though we won’t do it as quickly,” Matthewson said.
TMG estimates that there are around 500,000 people in South Africa in the socio-economic brackets that it is targeting, including key decision-makers in business and politics. The print publication’s circulation was 35,828 as of the third quarter of 2012, with a ratio of three readers per copy, suggesting a readership of over 100,000. However, the large number of individual readers accessing BD live and the opportunity to offer multi-user corporate subscriptions gives the media company confidence that it can grow its subscriber base using its online platform.
There are more than 15 major South African news websites, seven of which are online versions of newspapers. Mail & Guardian Online is one of the first news sites in Africa, while The New Age is the site of the country’s newest national daily paper. Media24 operates two news sites: News24, which is run in partnership with a number of the firm’s publications, and Fin24, which offers breaking news and company updates. South African Broadcasting Corporation (SABC) also hosts an online site, SABCN ews. Although the shift to online partly reflects demand – more and more people are consuming media via the internet, and particularly mobile devices – there is also an element of supply shocks encouraging newspapers to focus on web content. While journalists’ wages still constitute the bulk of costs that are involved in publishing print editions, the costs of production inputs, such as paper and ink, have been rising, says Matthewson of Business Day.
But not all companies share TMG’s confidence in the paywall model. De Wet says that he expects few other publications to follow suit in the near future, as they fear a considerable loss in online hits and thus advertising revenue. While for a relatively specialist publication such as Business Day, the move may make sense, for the mass market, retaining a large and broad audience is likely to be the priority for some time.
TV & Radio
Although television was late to come to South Africa – the nation was the last in Africa to have a television service and the first nationwide broadcast did not take place until 1976 – today it is offered in all 11 official languages, as well as German, Hindi, Portuguese and sign language. The most watched channel is SABC1, which carries news, entertainment and sports in a variety of languages. SABC’s other two domestic channels are SABC2 (which carries most of the semi-public broadcaster’s Afrikaans programming) and SABC3 (which runs most of the broadcaster’s English-language content, including comedies, dramas and other popular TV shows from the US and the UK.
Radio, with its ease of accessibility and low costs, remains the medium reaching the greatest number of citizens. The largest stations currently are the public service broadcaster’s African language stations, and more digital stations are expected in the future to meet audience demand, though this has been hindered. “Increasingly, radio audiences are moving online to digital stations, but an inhibitor is the lack of broadband availability and costs,” said Kuben Pillay, the CEO of leading media group Primedia, which owns radio assets with a combined count of roughly 3m listeners. Meanwhile, liberalisation has seen radio licences granted to a number of new commercial stations (see analysis).
South Africa’s magazine market is dominated by lifestyle publications. Circulation of the 68 magazines surveyed by PDMSA, with combined sales of 3.62m, rose by 0.6% in the year to the third quarter of 2012. However, the market has seen something of a shakedown in recent years, according to De Wet, having been “overplayed”. A number of magazines have folded, “and that correction was coming,” De Wet told OBG. Less successful publications have lost out to online rivals, whether through social media or international magazine websites. TMG has been hit particularly hard.
Media24 is the giant of the magazine market, publishing titles with a total circulation of around 2m and a market share of 54.2% in the third quarter of 2012. Its top brands include Huisgenoot, a general interest magazine with a circulation of 273,772; You, with celebrity news and lifestyle pieces (162,879) and Move!, a women’s weekly (125,952). Among the leading international magazines it publishes for the South African market are Men’s Health, Grazia and Heat.
JSE-listed Caxton & CTP Publishers and Printers is the second-biggest magazine player, with a total circulation of 777,465 and a market share of 21.4%. Its top titles include Rooi Rose, an Afrikaans-language women’s magazine with 100,949 copies shipped each month; Woman & Home (86,153); People (84,323); and Bona (82,855). The company is also South Africa’s largest commercial printer. The other major magazine publishers surveyed by PMDSA are Associated, which has titles including Cosmopolitan and Good TV audience, May 2013 free-to-air television channels, but has not proved particularly fleet of foot in response to the rise of private competitors. Pay-TV companies offer a broad range of channels and have driven up subscriptions with low-cost packages. SABC, funded both by licence fees and advertising revenues, has to both preserve a public service remit and ensure that it offers mass-market programming that brings in viewers (see analysis).
South Africa’s internet penetration rate of around 20% is low by developed-country standards, reflecting the fact that the country has lagged somewhat in developing its broadband infrastructure. But the growth of mobile internet, as well as rising incomes, is driving up usage. Mobile operators are increasingly looking to internet services as a way to drive up revenue, with competition and rising capacity helping bring down costs. “The readers of the broadsheet newspapers mostly already have smartphones,” said De Wet. “While many tabloid readers don’t, in a few years they will. Thus, the growth of mobile internet provides another channel for our content.”
As well as the growing presence of more mainstream media outlets online, South Africa also has a number of flourishing independent websites, which have blossomed from small start-ups. They include the Daily Maverick, which has found a niche in thoughtful news and analysis, as well as photojournalism; Tech Central, a technology news site which regularly breaks stories in the sector; and 2 Oceans Vibe, a lifestyle, news and features site which started as a Cape Town blog.
South Africa’s media is among the freest in Africa, having blossomed in the post-apartheid era. However, there are concerns about the political dominance of the ANC and the influence of hardliners in the party. In 2010 Freedom House, an international non-governmental organisation, downgraded South Africa from “free” to “partly free” on its press freedom index for reasons including increased government rhetoric against the independent media and government encroachments on state broadcaster SABC. More recently, Freedom House also criticised the Protection of State Information Bill, passed in April 2013 by a vote of 189 to 74 in the National Assembly, following three years of debate over the legislation.
Dubbed the “secrecy bill” by some, it expands the government’s power to classify information when it deems necessary, and imposes tougher penalties on those who publish such information. The new bill has also drawn criticism from Human Rights Watch, particularly for its lack of protection for whistleblowers exposing corruption, who currently face up to 25 years in jail if they are found to have revealed classified information. However, before being passed, an amendment was included, stating that disclosing information related to criminal activity is not in violation of the act.
In other areas, the media and government have cooperated more closely and come to mutually acceptable conclusions. In October 2012 South Africa introduced long-awaited and sweeping changes to press regulation. The changes shift from a model of self-regulation to “voluntary independent co-regulation” in the words of the Press Council of South Africa (PCSA), the regulatory body. The new PCSA has six members from the print media, nominated by a number of industry bodies, and six appointed by a panel from nominations made by the general public. The new rules introduce an independent chairperson, a retired judge who is expected to be another public voice balancing the influence of the media on the council.
To ease pressure on the press ombudsman, more powers have been granted to a director who has a full-time role focusing on engaging the public on issues of press ethics and freedom. Meanwhile, a public advocate acts as a conduit for complaints from the public to press outlets, including encouraging the settlement of disputes. If this fails, the public will have recourse to the ombudsman and ordinary courts. Sanctions include “space fines” in which newspapers will have to publish apologies and corrections with due prominence, as well as monetary penalties for repeated infringements.
Originally, the ANC intended to replace self-regulation with a form of state legislation. But after long negotiations, a compromise was reached strengthening public oversight of the press. “There were grave fears about a parliamentary tribunal, which would inevitably represent the ruling party view,” Matthewson told OBG.
As elsewhere, South African publications are seeing an erosion of print sales partly driven by the rise of the internet. Growing competition both from independent local outlets and international rivals is forcing some to adopt new strategies. Those that innovate successfully now will be best placed for the future. The mass tabloid market may be increasingly affected by this phenomenon as a larger share of its readership secures regular internet access.
But while online media are likely to become more important in the coming years, talk of the death of print is premature, with millions of newspapers and magazines still sold every day. There is a prevailing sense that the declines in circulation and advertising revenues seen in recent years are slowing in 2013.