TAMRA VELEY: Why corporate SA can’t let journalism die

 Medieval Europe gave us the concept of the first, second and third “estates”: the clergy, nobility and commoners. These days, the terms refer to the three branches of government — executive, legislative and judicial — with the fourth estate, journalists, holding the others to account.

Future historians reflecting on the first 30 years of democracy in SA will remark on the role of the fourth estate in helping to head off certain disaster by relentlessly exposing the venality of the first and second. And four months into the next 30 years, there’s no sign of this role diminishing in importance.

Last week alone the media revealed that a senior diplomat is accused of selling SA visas, the new justice minister is fundamentally conflicted in the VBS Mutual Bank scandal, the DA leader is discovering the risks of employing a highly controversial adviser in his ministerial office, and a long-standing ANC benefactor is being investigated for an allegedly unlawful R600m police contract. 

In other words, just another week of shenanigans, SA style, none of which we would know about without journalists.

In the same week the Audit Bureau of Circulations reported that total newspaper sales in the second quarter of the year remained in free fall — down 17.3% year on year and 13.7% quarter on quarter. The ground is fast approaching, and no-one is rushing in with a parachute, least of all Naspers, which in spite of a trading profit of $5.763bn (about R103bn) in the year to end-March, has announced the closure of four Media24 print titles. Shame on them. 

What about online news? The 25 publishers that belong to the Interactive Advertising Bureau SA shared 246-million page views in July, but well more than half of them (56.5%) went to Media24, and English and Afrikaans were the only languages represented. This represents not even a passing acquaintance with diversity. 

Only $2m of Naspers’ latest trading profit was due to Media24, so even with page views significantly bigger than all its competitors put together, it’s barely scraping by. Why? Well, there are the loss-making newspapers to consider, but as Media24 CEO Ishmet Davidson told the Competition Commission in March, Google is stealing its lunch, and it appears as if the Competition Commission is either hopelessly behind the times or asleep at the wheel. 

Only 5% of News24’s impressions on Google last year led to visits to the publication’s site from which the company could generate revenue, said Davidson. And the decline in advertising revenue outpaced the increase in subscription revenue, leaving News24 unprofitable. 

It’s clear, at least to me, that the Cold War that exists between the media and social media will heat up, and fast. It is estimated that in SA, Google and Facebook attract 60%-70% of digital advertising spend. And only a fraction of this, as Davidson noted, is finding its way back to the source, where the hard work is done and salaries are paid. Apart from that there is another pretty important implication: for one, I don’t relish the idea of having my news permanently disintermediated by Facebook or Google.

“So what,” a chief marketing officer of an entertainment, retail, fast-moving consumer goods or financial services company (together responsible for 69% of ad spend) might say. “I’m here to sell stuff and programmatic ads are killing it — not to mention making my life so much easier.” 

You can’t really blame them. Their key performance indicators (KPIs) bristle with terms such as sales and revenue growth, customer acquisition cost, return on marketing investment, brand awareness, market share and lead generation, so they’ll naturally grab any advantage available to boost their scores. 

But there’s an unintended consequence of their reliance on algorithms, and it’s existential for a fourth estate staggering through life with a broken business model on its sagging shoulders. Before much longer the burden will become unsupportable and more titles — print and digital — will collapse and expire. 

Those that survive will continue to shrink and journalism, which is expensive when done properly, will be the casualty. Relieved of the attention of pesky reporters, bad actors will thrive. Because we’ve seen this movie before, we have a good idea of what will happen next: corruption will multiply, governance will disintegrate and SA’s international reputation will be dragged down still further, destroying any economic green shoots that might have taken root there. 

Those chief marketing officers will be sweating by this time because deepening poverty, decaying public services and infrastructure, social unrest, the collapse of the rule of law, investment downgrades and Financial Action Task Force greylistings are not helpful for their KPIs. One or two of them might even wake up in the middle of the night, wishing they had supported a robust free press instead of simply selling more widgets. 

But to be fair, that would not have been in their job description, and certainly above their pay grade. It is CEOs and board members who should be thinking about the kind of country their companies want to operate in, the economic environment that will be the most beneficial for the long-term wellbeing of their businesses and shareholders. 

If they did that they would realise a functional fourth estate is a bulwark that deserves their intentional support; not handouts, but advertising in which rand and cents directly change hands in return for space in newspapers and on websites. It might not drive sales, but it could save SA. Not to mention adding credibility to their brands. 

Perhaps Business for SA should create a fund to which its members pledge a certain percentage of their marketing spend. And at the same time, given that broadcasters have to pay royalties to artists for using their songs, shouldn’t news aggregators similarly be forced to pay the media for content they post on their platforms in which they had no role creating?  I suggest that is what the Competition Commission should be focusing on to win public trust and usher in a fairer operating environment. 

On the other hand, we could just decide to be the nation that fulfils Kurt Vonnegut’s prophecy: “We’ll go down in history as the first society that wouldn’t save itself because it wasn’t cost-effective.” 

• Veley is MD of reputation management agency Corporate Image. She writes in her personal capacity.