JEREMY MAGGS: Small papers blossoming
Sales figures for the larger publications in SA have begun to drop as audience migration to digital platforms increases. Could the growth of niche titles be an indication of the way to go?
The long-term outlook for SA’s newspaper sector points to targeted opportunity that is buried in a worsening climate.
That blunt assessment is contained the latest "Entertainment & Media Outlook: 2017-2021", compiled by consultancy PwC.
Project leader Vicki Myburgh says, however, that the sector is a difficult one to predict, as the market showed growth in 2013, declined in 2014, and in 2015 contracted at a slower rate.
Myburgh says larger titles, which make up the bulk of the industry, have begun to feel the commercial impact of audience migration to digital platforms, and that this will become even more pronounced.
The report says that on top of declining circulation and revenue — a global trend — SA’s economic situation makes matters worse: "If politicians cannot restore confidence and economic growth quickly, publishers will continue to experience an exit of advertisers to alternative platforms.
"The lesson from other markets is that adspend lost to big online platforms rarely, if ever, comes back to print."
That can already be seen. Myburgh says SA’s Internet advertising revenue is set to increase to R8.1bn in 2021 from just under R2bn in 2012.
PwC’s newspaper-sector assessment is well illustrated by the latest circulation figures from the Audit Bureau of Circulations of SA for the third quarter of 2017.
Daily newspaper circulation has declined by almost 4% since the second quarter and by 12% since the previous year. The Pretoria News showed the biggest quarterly decline (8.7%), with The Star and The Times down by 6.3% and 6.2% respectively.
Tiso Blackstar, owner of The Times, has announced that the title will become an online product only.
Weekend newspapers’ circulation was down 3.4% on the previous quarter and just over 12% in a year.
PwC says the newspaper market’s contraction will continue over the next four years. "In 2021 the newspaper market is expected to be R1.5bn smaller than in 2016. The market last year was worth R8.9bn, but that figure will drop to R7.4bn in 2021."
The Nigerian newspaper sector, by comparison, is forecast to remain stable thanks to growing national consumption, while in Kenya print advertising dominates and revenue is expected to grow at 2% until 2021.
Though the SA sector looks gloomy, Myburgh sees latent opportunity in the market. "While the big publishers grapple with revolution and rightsizing themselves, small and grassroots publications have blossomed.
"Many serve targeted groups such as regional language [groups] and newly affluent local consumers, and they may find that they boast a customer connection larger providers have lost."
She says the key question is the extent to which the industry can capitalise on these promising signs. She asks: will hundreds of titles with growing but tiny circulations add up to a scale sufficient for an industry facing big challenges, or will the momentum prove too disjointed and the market too crowded for it to return to overall growth?