Connect with us

People 'n' Issues

Online and print media grow together in SA

Published

on

According to a study by PwC, South Africa is experiencing an increase in the growth of readership for traditional newspapers and a developing digital market, in contrast to the more developed countries, which are experiencing a migration of readers to online platforms.

Unit circulation has however been steadily declining over the past few years and this trend is expected to continue into the future. This anomaly arises from newspapers increasingly being shared by more readers.

Although there has been a significant increase in the growth of readership of newspapers, it remains to be seen if this trend will continue as broadband penetration increases in the market and online editions start to attract more readers. These are some of the findings of PwC’s recent South African Entertainment & Media Outlook 2012-2016 (‚’The Outlook’) report.

The total newspaper market in South Africa rose by 5.7% in 2011 to R11.4 billion, a significant increase from the 1.9% growth recorded in 2011. This increase was largely due to strong growth in advertising spending (10.8%) offsetting a 6.4% decline in circulation spending. Although there was an increase in overall newspaper readership of about 7.7% in 2011, this was mainly as a result of more people reading the same copy, rather than increased paid-unit circulation. There was a net drop in paid unit circulation of 6.7%, with a subsequent decline in overall circulation spending.

The overall incidence of newspaper readership increased from 29.4% at the end of 2010 to 30.8% at the end of 2011. The study found that the growth of readers tended to be among the larger newspapers, which generate more advertising than smaller titles.

Vicki Myburgh, Entertainment & Media Industries Leader for PwC Southern Africa, says: ‚”It remains to be seen if the growing readership trend for print newspapers will continue as online editions are attracting more readers. We expect print readership growth to slow and ultimately decline as digital readership expands. This will have a significant effect on the advertising growth of newspapers.‚”

The Outlook shows that the improving advertising market for newspapers led to several new launches in the market in 2011. Myburgh says that new launches tend to run contrary to the trend in other countries where newspapers are closing shop. ‚”The launch of new editions provides additional outlets for advertisers and contributes to an overall growth in advertising.‚”

With economic growth expected to moderate in 2012, the study projects advertising growth to improve to 7.1% in 2013 and to average 8.5% compounded annually during 2014-16.

As broadband penetrates the market, the potential for digital content and advertising is increasing significantly. The major newspaper titles in South Africa also have online editions that are attracting a small, but growing advertising stream. The study predicts digital newspaper advertising to expand at annual rates in excess of 20% during the next five years, reaching about R472 million in 2016. Digital newspaper circulation spending is projected to total an estimated R52 million in 2016, up from only R1 million in 2011.

Myburgh says that newspapers are also seeing an ongoing shift in classified advertising from print to the Internet. ‚”Classified advertising on the Internet tends to be more easily searchable than in print. Furthermore, the rates are lower and ads can be inserted anytime, can be changed easily and are not as limited with respect to word count.‚”

When digital advertising is included, total newspaper advertising is forecast to grow by an estimated 7.9% on a compound annual basis during the next five years, rising to R12.3 billion in 2016 from R8.4 billion in 2011.

Print circulation

Although the growth of readership of newspapers rose during the past two years, circulation figures fell, declining by 6.3% in 2010 and a further 6.7% in 2011. Between 2007 and 2009, the cumulative decline for the two year period was 5.7%, less than half of the decrease of the past two years.

‚”As broadband penetration increases, we can expect a decline in circulation in print newspapers. Because South Africa is still well behind other countries in broadband penetration, it will experience rapid broadband growth in the coming years. Consequently, we expect steeper declines in newspaper unit circulation compared with most other countries,‚” says Myburgh.

As the economic climate improves, declines are expected to even out to 5.6% annually during 2015 2016, which will still be sharper than in most other countries, states the report.

Digital circulation

While readers do not appear to be willing to pay for online newspapers, they do appear to be willing to pay for the convenience of having a newspaper downloaded to a mobile device. A paid digital circulation market is developing in a number of countries as the convenience of having a newspaper on a mobile device increases, states the report. As the cost of accessing the internet decreases and more people get connected, fewer people will turn to print newspapers, particularly those that they have to pay for their information. This may be regarded as a negative trend but does point to an opportunity in the digital news sphere, says Myburgh. ‚”

Tablets are proving to be popular in South Africa and as prices come down, we expect penetration to expand.‚” As the penetration of tablets and the quality of available news applications increases, the potential market for paid digital circulation will increase. The report projects that by 2016 paid digital unit circulation will total 86 000 from only 2 000 in 2011.

Generally people still view digital products as inferior to products in their traditional physical formats and have only been willing to buy digital products at a discount. ‚”We expect this behaviour to characterise digital newspaper use.‚” Average annual newspaper spending is projected to be less than half of print newspapers and to decline from R610 in 2011 to R600 by 2016. Aggregate spending will total an estimated R52 million in 2016, up from only R1 million in 2011.

Myburgh says that traditional print sales will continue to decline for the foreseeable future. ‚”Emerging technologies create new opportunities for the newspaper industry to increase online distribution and to reach larger audiences.

‚”Partnerships and acquisitions will be vital, allowing penetration into new markets and diversifying revenue streams. Tablets and mobile devices will provide access to a more youthful demographic and will help newspapers evolve their offering to appeal to younger readers.‚”

Continue Reading

Trending

Copyright © 2020 World Wide Worx