The Times Media Group is the latest media owner to take action after the Competition Commission gazetted amendments to section 73A of the Competition Act in a move that has a direct impact on South Africa’s media owners and media agencies.
Any advertisements placed by agencies in Times Media titles from 1 May 2016 will attract new early settlement discounts, the Times Media Group has announced.
“Apart from creating a model that supports the viability of our business, and that of our clients, we have been reviewing our structures. As such revised rates have been introduced for both accredited and non-accredited media agencies across all of Times Media’s media platforms,” said Trevor Ormerod, general manager of sales and marketing for the Group.
Accredited media agencies will see their early settlement discount increase to 17% (up from 16.5%), provided settlement is on 45 days. An additional 0.25% increase will be effective for every 15 days of advance settlement. Settlement between 46 -60 days will see early settlement discount unchanged at 15%. There is no settlement discount after 61 days.
Unaccredited media agencies will also see the early settlement discount being increased to 15.5% (up from 15%), provided settlement occurs on 30 days. Similarly a 0.25% increase will be effective for every 15 days of advance settlement. There is no settlement discount after 31 days.
In both instances above, these new rates would apply only where there are no individually negotiated arrangements to the contrary, which is the case with a number of our clients.
“Since we are all operating in difficult times, we believe any adjustments that reward agencies for timeous payment are essential. We look forward to driving further mutual benefit between ourselves and media agencies, and assuring them of our on-going support of their businesses,” Ormerod said in a statement.
Capro not changing structure
The Country Central Advertising and Public Relations Office, better known in the newspaper industry as Capro, will not be cancelling or amending its agents’ 16.5% commission.
“Please be advised that Capro will continue with the current arrangement,” said general manager of Capro, William Davis.
Capro was set up in 1950 to represent small, mostly rural, newspapers at advertising agencies, government institutions and big national companies. It represents and procures advertising for 111 titles in six SADC countries, and has branches in Johannesburg, Cape Town and Durban.
On Friday, The Media Online reported that the Competition Commission had gazetted amendments to section 73A of the Competition Act in a move that has direct impact on South Africa’s media owners and media agencies. As a result, DStv Media Sales, Media24 and Caxton rapidly restructured their commission structures and therefore their rate cards ahead of the 1 May deadline.
But Davis said Capro would not follow suit. “We see no need to change. Why mess with what works?” Davis told The Media Online. He said members of Capro had not yet voiced their views on the Competition Commission’s move to amend the Competitions Act but said the organisation’s stance could change in the future.
“One should not change a system that has been in place for decades overnight. Some sort of notice is appropriate,” Davis said.
Davis said Capro had engaged with the Competition Commission investigation into the 16.5% commission, but that he personally was not involved.
While Capro is sticking to its guns, Media24 and DStv hastened to change their system. Media24 changed all its rate cards – across its newspaper, magazine and online properties – to exclude the long- established 16.5% early settlement discount or agency commission.
“In terms of the amendments to the Act any conduct that is found to be collusive or cartel-like is a criminal offence. Having assessed its exposure, and without acknowledging any wrongdoing, Media24 has decided to take these precautionary measures to create certainty and avoid any regulatory and legal risk,” the company said.
DStv Media Sales, in a statement issued on Thursday evening, said it had “amended the settlement discount structure for media agencies that book advertising on DStv platforms in order to address any legal uncertainty regarding our compliance with the Competition Act”. DStv Media Sales said it had reduced its rates to reflect this amendment, which would be effective as of 1 May 2016.
Caxton took a different route. “Going forward, the fee payable to accredited advertising agencies would be 15.5% and to unaccredited advertising agencies would be 14%. Furthermore, the Caxton Group would allow an additional 1.5% discount for timely settlement. This would only apply where there are no individually negotiated arrangements to the contrary,” said Gill Randall, CEO of Caxton’s Spark Media (formerly the Newspaper Advertising Bureau of SA).
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