Virginia Hollis, joint MD at the MediaShop, says that the media industry is not coping very well with the economic slowdown. “Everyone is feeling the pinch. We are all in for a tough ride, both internationally and locally.
align=justify”It is a time of doom and gloom and it will be for a while. None of us are going to be happy as we won’t make as much money as we used to.”
align=justifyHowever, adspend figures from AC Nielsen do not reflect a decrease, with total adspend for South Africa increasing from R12,527-million from January to July 2007 to R13,288-million in the corresponding period this year.
align=justifyHollis adds: “Interestingly budgets haven’t been affected yet.”
align=justifyIt seems print media is feeling the brunt, spurred on by economic conditions and technological factors resulting in a decline of advertising revenue and circulation.
align=justifyHollis says people in the print industry have realised that trouble is coming, “It is going to hit the print industry. People need to rationalise their budget better.”
align=justifyMedia24 has confirmed that it plans to reorganise some parts of its business, which may lead to the possible retrenchment of staff, particularly in the newspaper department. “We have embarked on a number of cost cutting activities. Currently we are looking at the entire company and are at a consultative process,” says Lutfia Vayej, head of corporate communications at Media24.
align=justifyThe affected divisions will include pre-press, administration finance, marketing communication, advertising administration and human resources. At this stage the editorial and advertising sales division will remain unaffected. The company’s plans to curb costs include a capex freeze and curtailing development spend.
align=justifyA number of titles have already been closed by Media24 including True Love Babe, Blunt, ZOO Weekly/Weekliks, TopMotor, Max Power and Insig. In the newspaper department, Son Noord and Son Sentraal were also dropped.
align=justifyThe most recent financial results showed that operating profits had dropped by 11%.
align=justifyAMASA chairman Brad Aigner previously told TheMediaOnline that there is a lot of negativity in the market at the moment. “Budgets will get cut. However, in tough economic times some companies thrive and some don’t. I have noticed that investments are becoming more considered. Clients want to see what they are getting for their money.”
align=justifyHollis concludes that as an industry we need to accept that the problem is here. “It isn’t going to go away soon. I think it will be here until 2011. 2010 won’t make such a big difference, it will just be a little blip in a flat economy.”