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SA media faces 'grim future' as it battles falling revenues – Reuters study

Jun 16 2019 13:27
Lameez Omarjee, Fin24

Newsrooms are going to have rely on subscription and membership models to ensure their sustainability in the face of declining revenues across various mediums, a study by the Reuters Institute found.

The recently released Reuters Institute Digital News Report for 2019 unpacks SA's media landscape. It shows that, while consumption of news in print form is declining, consumers are increasingly relying on digital platforms to get the news.

The research was conducted using a questionnaire completed by a sample of the English-speaking population in South Africa. It was completed between January and February 2019.

"Despite relatively high trust levels in the news overall, revenue for news media has been on a downward path for several years, with a 12% drop in ad spend last year for television, 5.6% for radio, and 7.7% for print," the report states.

"With newspaper circulation dying, broadcast revenue dropping and journalism resources eroding, news is going to have to increasingly rely on subscription and membership models to sustain volume and quality."

The research shows that, of those sampled, 16% of respondents claimed to pay for online news. There has also been a "surge of goodwill" through reader donations to independent publications like Daily Maverick and amaBhungane to support their investigative reporting.

"But this is an uncertain form of income, and with no sustainable revenue model available currently, South African media houses are facing a grim future," the report warned.

Daily Maverick, Daily Vox, GroundUp, New Frame and amaBhungane, rely on a combination of donors and crowdfunding. "AmaBhungane has been particularly successful when it comes to crowdfunding, with it listed as the single biggest source of revenue in 2017 and 2018," the report noted.

Print decline

Consumption of print media is also continuing its decline, as data for the first quarter of 2019 shows that newspaper circulation declined 5% year-on-year, the research indicated. "Daily newspapers were the biggest losers, with a 10.5% drop, but weekly newspapers were almost as badly affected, with a 7.9% decline year-on-year," the report read.

Data for the last 10 years shows a 49% drop in circulation for newspapers. "No newspapers have a convincing route out of the print mire into a sustainable digital future," the report read. Paywall and subscription models implemented by papers like Mail & Guardian and Business Day are showing "disappointing numbers". The study pointed out that most digital advertising revenue goes to big social media and search platforms.

Meanwhile, 90% of respondents said they get their news online, including on social media. Data measured by IAB South Africa shows 11 of the top-15 local sites are news sites, but this does not necessarily translate into digital revenue, according to Reuters.

Respondents also indicated that they share news online, with 36% using messenger apps, 40% using social networks and 39% commenting on news using social media or news websites.

Social media is increasingly becoming a gateway to news. "A third [of respondents] said they prefer to come across news via social media, ahead of direct access (28%) through a news website or app."

In its conclusion, the Reuters Institute stressed that the opportunities afforded by the digital world must be leveraged to rebuild ties between producers of news and those who consume it. 

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