Around 70 percent of South African dailies experienced a year-on-year drop in circulation in the third quarter last year. Circulation declines (not only for dailies), combined with a slowdown in adspend and an expected increased preference for news from digital sources, have been cited as reasons why Media24 and the Independent group have embarked on a “restructuring” process.
According to Audit Bureau of Circulations (ABC) figures, the Afrikaans Media24 daily Die Burger‘s circulation dropped from 81,733 to 80,004 between the second and third quarter (2008).
These figures represent a significant drop from 2007, when the comparable figures were 90,927 (Q2) and 87,562 (Q3) respectively. Beeld‘s circulation decreased from 105,131 to 104,141 between Q2 and Q3 (2008), while Volksblad experienced a decline from 28,065 to 27,699 in the same period.
At Independent, The Star‘s total circulation was 164,298 in the third quarter 2008 (down from 169,196 in the second quarter, 2008). Cape Times experienced a decline, from 50,799 to 46,919, in the same period; and there was quite a steep drop for Cape Argus: from 70,033 to 63,546. Daily News, The Mercury and Pretoria News also experienced declines.
At Media24 Newspapers, editorial staff were informed in November that the company had decided to cut jobs in order to save costs due to the impact of an “unexpectedly sharp and deep” economic downswing, and to prepare for the “digital wave”. Staff members could apply for voluntary retrenchment packages and those nearing retirement age were giving the option to apply for early retirement.
Up to 20 percent of editorial posts at Beeld, Die Burger, Volksblad and Sunday paper Rapport were expected to be cut (a figure which Media24 was not able to confirm at the time of writing), and the company was considering centralising a number of line functions.
For example, sub-editing functions could move to Johannesburg, where a team would edit the copy of the Afrikaans dailies and Rapport (where circulation dropped from 300,019 to 296,218 from the second to the third quarter 2008 – a significant decrease from 321,802 in Q2, 2007).
At the Independent group, two senior writers, Jeremy Gordin (the South African Journalist of the Year) and Hans Pienaar, were given the option of taking voluntary retrenchment packages (which they did).
Employees in the group were reportedly told that the jobs of more than 20 editorial staff members countrywide were on the line. As is the case with Media24, the sub-editing duties were expected to be centralised. According to Sapa, Cape Times editor, Tyrone August, resigned because he did not agree with the company’s decisions in this regard.
Gordon Patterson, deputy president of the ABC, believes the decline in newspaper circulation does not “justify the emotional response of the executives at the different newspaper groups”. He adds that publishers have failed to point out that much of the decline in circulation is self-inflicted.
“Most major newspapers have cut back on print orders because of rapidly rising input costs like printing and transport, which in some cases have increased by up to 40 percent.”
This means that newspapers have in some cases stopped distribution in certain areas because they do not believe the small number of readers in these areas justifies the cost of transportation and printing, which brings down circulation figures.
“If there is a 5 percent loss in print orders, it is only logical that the circulation figures will come down,” Patterson says.
Arrie Rossouw, a media consultant who, as a former newspaper editor (Beeld and Die Burger) and content editor of 24.com, has seen many changes in the media landscape, says South African newspapers will come under even more pressure in 2009.
“Due to the economic crisis, there will be increased pressure on media houses as clients continue to cut down on advertising expenditure. Because of economic restraints, many consumers will also stop buying newspapers in an effort to cut costs. We will see growth in broadband expansion, which will accelerate the digitisation process in South Africa as internet access becomes more affordable.”
Guy Berger, head of the school of media studies and journalism at Rhodes University, warns that the pressure to cut costs could endanger the integrity of newspapers and other media products.
“In the short term, rationalisation may help companies. But in the long term, the quality of the content could be undermined. Rationalisation often means that expertise is spread too thinly at newspapers,” he says.
“It is extremely sad when experienced journalists are forced to leave media companies. However, some of them will not leave journalism entirely. Many of them will continue to write blogs and books and some will start their own media companies.”
Berger also believes that the departure of older, cynical journalists opens the way for younger, more optimistic voices to come through.
“Of course there is some loss with regards to wisdom and experience, but younger journalists are more attuned to the nature and needs of a younger audience.”
Patterson argues that offers to journalists to accept voluntary retrenchment packages – as those offered to Media24 journalists – often result in the best people being lost.
“Talented journalists are few and far between. When an offer like this comes around, the best journos leave a company because they know that they can get better-paying work elsewhere. There is often a strange confluence between loyalty and mediocrity,” says Patterson.
For years, Afrikaans journalists were secure in the knowledge that once they joined Media24 with its near monopoly in the Afrikaans media sector, they would be assured of life-long job security. Their loyalty to the company has now come under pressure. Uncertain times “Afrikaans journalists have never before felt so threatened,” a senior reporter at one of Media24’s dailies, told The Media at the time of writing. “I have been with the company for over two decades and have never seen such negativity amongst my colleagues. We have been living with uncertainty for months while Peet Kruger (former editor of Beeld, who was recently appointed editor-in-chief of Beeld, Die Burger, Volksblad and Rapport) did research on how to streamline the newspapers. We all knew changes were coming and this led to huge uncertainty about job security.
“Although there were some attempts to talk to us by management, there has as yet (by mid-January) been no satisfactory explanation from top management about how the company will be restructured. We know certain functions of the different papers will be amalgamated, but we do not know how this will be done. When this crisis blows over, the Afrikaans newspaper industry will have to deal with a unionised editorial corps – something they have never had to deal with before.”
Kruger was part of a Media24 team, which researched the operations of newspapers in Europe and the US. In the latter country, thousands in the newspaper industry lost their jobs in 2008, with big brands such as The New York Times laying off journalists. “In the end, Kruger used the best examples to build his proposed model while taking our own realities into consideration,” says Francois Groepe, CEO of Media24, in response to an enquiry from The Media.
Groepe admits some of the functions at the group’s newspapers should have been centralised “many years ago”.
“Various tasks have been duplicated and triplicated without good reason for years.”
However, he claims the company has not been caught unawares by the economic crisis. Media24 had frozen posts the year before in anticipation of an economic slowdown and increased digital media consumption.
Given this migration to digital consumption, what will the future hold for newspapers? “Worldwide, the growth of the internet affects traditional newspapers. (The situation) is aggravated by the international economic slowdown… Those newspapers that adapt the best… will be the most authoritative source of news for many years to come,” he says.
Groepe adds that while most established newspapers experienced a decline in circulation due to the economic crisis, titles aimed at emerging markets are less affected. Generally speaking, these titles have good growth potential – in part because their readers are expected to migrate to digital media consumption at a slower pace.
In these uncertain times, Afrikaans journalists have turned to trade unions for help. Some have joined Solidariteit, which also represents a number of people at the Independent group, and others, the Broadcast and Electronic Media and Allied Workers’ Union (Bemawu).
Jaco Kleynhans, spokesperson for Solidariteit, says there is no indication that major newspaper groups in South Africa are losing money. “There has been a decline in advertising revenue, but this does not mean that the different companies are losing money. The companies still post healthy profits. We believe plans to reduce (the number of staff members) at newspapers were premature.”
Figures obtained from Nielsen AIS, show total adspend for various media groups’ newspapers of R6.1-billion for the period January to November 2008 (R6-billion in 2007).
Avusa’s newspapers attracted adspend of R1,068-million in 2008 (R968-million in 2007). The comparable figures for the Independent group are: R1,701-million (R1,744-million), and for Media24: R2,196-million (R2,142-million).
Kleynhans agrees that there will be a change in how Afrikaans journalists in particular approach their working environment in future. “Before this crisis, journalists felt secure in their jobs, partly because of the proliferation of Media24 products. But things have changed and they will try to protect their jobs by joining unions which will fight for their rights.”
In contrast to the US market, South Africans still have a lot of faith in the printed media, says Kleynhans. While a growing number of South Africans are turning to the internet and mobile-phone technology for their daily news fix, Kleynhans says South African digtital-media consumption does not come close to that of the US.
“A large part of the population does not have access to the internet. Yes, there is optimism that broadband access will increase connectivity, but we will not see the kind of numbers to equal those in America. And how many people who use pre-paid cellphones will use the internet to access news reports?”
David McKay, editor of Fin24.com, the online financial arm of Media24 (which also incorporates the magazine Finweek) says that too much is made of the division between online and print media. He believes the way forward is an integrated approach for print and online media.
According to him, the most competitive media products will survive the crisis. Consumers make a lifestyle and loyalty choice when they buy a printed product – whether to read it in the bath or while lying in bed, or for ease of reading when commuting. The comfort of holding a printed product in your hand can not be equalled by reading news digitally.
However, McKay believes that the potential for growth in digital media is huge. When the installation of the Seacom broadband cable is finalised (expected by mid-2009), internet access will become much cheaper and the number of new users will increase dramatically.
And while Media24 newspapers are getting rid of employees, Fin24.com is hiring new people.
Although many Afrikaans journalists who leave Media24 will most probably find new opportunities in online media, some are concerned that Afrikaans will lose ground.
The argument has always been that in spite of competition from English, a dominant international language, Afrikaans will survive because of its robust literature, entertainment, arts and media industry. The fact that Afrikaans papers are cutting jobs and that some are experiencing a drop in circulation (the tabloids are notable exceptions) is causing concern in some quarters.
Although it was unclear at the time of writing how exactly Afrikaans newspaper operations would be restructured, speculation was rife that the dailies, Volksblad, Beeld and Die Burger, would in effect become one newspaper. Separate teams of reporters at each newspaper for beats such as politics, sport, health, science and the environment might be rationalised into single teams serving the different titles.
If this does happen, there will effectively be one mainstream (non-tabloid) daily paper to serve the Afrikaans community.
This has led to concern that diversity of voice will suffer.
“Afrikaans is indeed under threat if this happens,” agrees Patterson.
“In South Africa not only is Afrikaans being threatened; this is also happening to the indigenous languages. Why is there not a proliferation of newspapers in these languages?” Rossouw does not agree that changes in the Afrikaans newspaper industry is necessarily a threat to the Afrikaans language.
“New media – the internet and cellphones – offer a myriad of opportunities for people to communicate in their language of choice. There are many portals where Afrikaans speakers are active and where they converse in their mother tongue.” He believes that the digital media will increase diversity.
“The internet offers a voice to every individual. Anybody can blog. Opinions are no longer limited to a few columnists who are appointed by an editor and with whom consumers are stuck.” And although there is indeed a lot of nonsense on the internet, there are also some very important voices.
“Some of the most respected analytical voices in the world are currently read through blogs,” says Rossouw.
• The Media repeatedly tried to get comment from the Independent group. Both e-mailed questions and phone calls were ignored.
• At Avusa, where retrenchments were expected to affect Daily Dispatch, the CEO, Prakash Desai, responded as follows to questions about possible retrenchments and the effect the economic crisis has had on the group: “… Avusa has had strong adspend support in a softer market. We are not planning the merging of editorial functions with our core focus of providing quality content, nor is an across-the-board staff reduction exercise foreseen at present.”
Stephanie Nieuwoudt is a freelance journalist.
This article first appeared in The Media’s Newspaper Collection (February 2009).