Glenda Nevill asks the CEOs of South Africa’s biggest newspaper (and now multimedia) groups some leading questions on where to for print media in a multiplatform world, how they’re planning to monetise their media products this year, the role of data journalism and the challenges facing the industry, among many other issues.
Media24’s Esmare Weidemann and Times Media Group’s Andrew Bonamour answered in full but Independent Media’s Dr Iqbal Surve declined to be interviewed for the piece. Using previous interviews with senior staffers at Independent, we pulled together answers similar to the questions asked of Weidemann and Bonamour. The Independent Media story will run on Friday.
‘Newspapers have to transform, and transform fast’
Andrew Bonamour is CEO of the Times Media Group. The past year has seen TMG not only publishing the news, but making the news too. The high profile resignation of Sunday Times editor, Phylicia Oppelt, coupled with ongoing fallout from the newspaper’s publishing of its SARS ‘rogue unit’ story continues to make waves, especially as it was coupled with massive ructions within the revenue service and finance minister, Pravin Gordhan. New editors were appointed to the group’s most influential titles, including Business Day and Financial Mail, and the group has embarked on a process to redesign and ‘innovate’ its newspaper titles, as well as to push further into the events space as a financial driver.
Bonamour believes 2016 will be a “watershed year” for South Africa’s newspaper industry, battling with a weak economy, declining circulation and reduced marketing spend in print and other platforms. Consolidation in the industry has to happen sooner rather than later, he says. “There are too many titles competing for declining advertising spend and unless there is a conscious effort to consolidate there will be significant failures. “
He believes non-profitable or marginal titles won’t survive, or not without “fundamental change.
“ We expect a year of partnership and merger activity that will result in lower overall costs of distribution and printing while producing premium products with a higher level of quality content.”
The Sunday Times has issued a revitalised app for mobile, which promises enhanced user experience, more audio visual content and improved download speeds. It is designed, the group says, to position the newspaper for “a contemporary print and increasingly digital future”.
The Media caught up with Bonamour and asked him a series of leading questions on newspapers, print media, the state of advertising and the company’s strategy for 2016.
Question: What are you three most important, overarching goals for 2016?
Answer: 1. Transforming our newsrooms into quality multimedia content producers across multiple platforms in line with changing consumption habits. 2. To build a sustainable base for growing the business by removing excess costs, creating a cost effective distribution and printing network, and ensuring we develop new revenue streams by leveraging off the strong brands we own. 3. To constantly innovate in a rapidly changing market, both in terms of new revenues and consumer needs, and to be fast followers of international trends.
Q: What do you see as your biggest growth drivers in 2016?
A: Newspapers and print in general are still generally run with an old mindset based on how things once were. One needs to be able to adapt quickly to changes in a fast evolving market. What we did or wrote 10 years ago won’t work in the new environment
Digital will enable growth in users and revenue, both advertising and consumer, but only if done with a targeted, value driven mindset.
Magazine type products within newspapers are showing good growth locally and internationally and we are seeing increased revenues from these products
Native advertising will be a significant growth market.
Eventing is a major opportunity and we are expecting high growth in the sector.
Q: What, in your opinion, are the biggest challenges facing South African newspapers, and what are you/your company doing to address them?
A: Many of the issues are endemic such as changing consumption habits, a shift to digital in readers and advertisers and increasingly weak macro-economic performance.
The cost of distribution of newspapers is one of the greatest threats to sustainability. There is a crucial need for industry consolidation to share costs and routes if newspapers are going to remain profitable. This has occurred across most developed markets and has added life to products that would otherwise have closed.
We are highly focused on transforming our business to be more lean, agile and capable of sustaining and growing under these circumstances.
We are developing new revenue streams through native advertising, innovative digital and multimedia products, eventing, high quality magazine type products and by growing reader revenues through various forms of digital subscription.
Q: What are your hopes for the new Publisher Research Council? What do you want to see come out of the organisation to benefit newspapers?
A: The organisation needs to be a focused body able to be a credible provider of data for advertisers, to deliver powerful research into the power of newspapers and quality news, and to provide a forum for the key players in the industry to focus on the common issues that most affect them.
Q: Where do you stand on native advertising and how is your company ensuring that the way you publish sponsored content is ethical and clear in its intentions?
A: Native Advertising done poorly, or unethically, is suicidal. Our view is that, done correctly and within the boundaries of ethics and good taste, it is an enormously beneficial solution for advertisers and publishers alike. We have strong representation on the IAB Publishing Council, and they are finalising industry guidelines and recommendations for the use of native advertising.
Q: How important are news videos to you and will your digital properties be investing in video and multimedia products?
A: Incredibly important. This is a huge investment area for us, and we are very pleased to have Dan Calderwood on board as head of Multimedia. He is a force, our numbers are up more than 400% month on month, and we’re collaborating with advertisers on a number of new solutions that we are now able to bring to the market. Socially and on-site, video is literally exploding, and the appetite for news video is huge. We are lucky to have an excellent multimedia team and a large contingent of world class and proficient photographers on board to help drive this stream forward.
Q: In terms of your strategic overview for your company, what are your plans ahead, and what are some of the results of strategies from the previous year? Are you on track and happy with progress?
A: Strategically we are on track. We have ignited a fundamental change in the way we do things and by next year we will be in a new newsroom, with new workflows and new designs for our products. We are highly focused on ensuring we set the correct base for our business, and rapidly innovate to ensure we remain leaders in our market.
We are fortunate to continue to run profitable titles and strong well-resourced newsrooms. It is this that will allow us some space to deliver the changes required to retain and build our market position.
Q: In the modern media economy, with all its challenges, do you think the role of the editor is changing? And if so, why and how is it changing?
A: Definitely, editors are more commercially aware than they have ever been. They have had to learn to do more with less and in a multimedia world, but they have to do so without crossing ethical lines. Editors have to understand the environment and the business they are working in, know how budgets work, and understand commercial pressures.
That said, our content remains our central differentiator and editors are the lifeblood of ensuring we retain that. Newsroom productivity and continued high quality editorial will be the key to succeeding in a multi-platform news environment.
Q: The same with the Press Code and media ethics. Is our Press Council working and does our Press Code adequately cover what it needs to? Does it have teeth?
Yes, but there is always room for improvement. In this case it in the area of social and digital media, where the codes that apply to newspapers and broadcasters also be applied in order to ensure healthy regulation that continues to support freedom of speech but also ensures a remedy system for public response.
Q: The relationship between government and the media is quite often tense. Government threatens the MAT, and media pushes back. Is this just the way it is or should measures be taken to improve the relationship? Do you see government as a threat to media freedom?
There will always be a natural tension between state and non-aligned media. No one will change that. But we should be constantly engaged from both sides to ensure that there is a mutual respect and understanding of each other’s role. If that doesn’t happen then there is a direct and clear threat to media freedom.
Q: What is your latest thinking on your online properties, paywalls and monetising content?
A: All products will have different requirements. On a recent trip to the UK I visited four different news organisations, which frankly had four starkly different strategies on monetisation. They key is how valuable and unique your content is, and in which sectors you operate. We’re in a remedial phase at present, overhauling old tech, getting the basics right and then systematically rebuilding and relaunching our products. We absolutely believe in paid for content, and have the editorial strength in our products to explore that option.
The new Sunday Times app is now available in the Google Playstore and the App Store, and it is part of a paywalled offering for Sunday Times journalism, which is entirely worth paying for. The app itself is clean, quick, light and beautifully designed. We’re very pleased with it. Our business sites too are in the process of being relaunched. Monetisation is not a one-dimensional strategy online, it is multifaceted. The spend migrating to online is significant, and we’re ensuring we are ready for it.
Q: What is your view on ad blocking and is it/will it become a threat to your online properties?
A: Our numbers are unaffected at present, but we have already started diversifying from banner and display as the stock standard format. Advertisers and readers alike deserve a richer experience, and the abundant opportunities available in innovative ad ops, video, multimedia, VR, interactive, and eventing means that the humble banner, blocked or not, is not the beginning and end of the road.
Q: There’s been an awful lot of movement of senior staff between the big media houses. Is retaining staff becoming a problem, especially highly skilled digital people? Is there a shortage of such people and if so, how should it be addressed?
A: There is a shortage of digital skills in South Africa, certainly. As digital access improves, so will skills and hopefully our national training facilities will start focusing harder on digital literacy. We’re not having a problem retaining staff: we’re investing in digital, having a lot of success with our products and projects, and TMG is an exciting and energised place to work at the moment. We’re attracting a lot of interest from younger multimedia journalists who want to experiment and innovate with us, and we’re only too happy to have them, learn from them and let them teach us. We’re having a lot of fun.
Q: Where is your newspaper in terms of data journalism? Is this something you are embracing?
A: Yes again, an area of investment that is underway as part of a broader restructuring and investment programme. Infographics and data journalism are top of the pile as content streams for online. We have job descriptions for coders, designers, data journalists and statisticians drawn up and we will be advertising in the next few weeks. Andrew Trench, our new digital editor, has a particular interest in datajourn, so we will get a lot of momentum through him too.
Q: What is your outlook on advertising this year? Your goals, the challenges? Did you ad sales teams meet target last year on some titles, if not all?
A: The advertising outlook is negative. The combination of major advertisers cutting budgets or reducing spend via smaller ads and government cutting back will have a major impact on the industry. Certain advertisers such as retailers remain supportive of print and big brand advertisers are realising print remains a core part of the mix. But the weak economy is slowing marketing spend in general. Innovation is key to sustainability and our sales teams need to be multi skilled. Any sales team that met target this year set the bar too low.
Q: Any other insights?
A: Our industry and business models are undergoing fundamental change, as they have done internationally in recent years. We need to realise there will be casualties in the industry in the coming months and years in terms of titles, and that industry consolidation will play an increasing part in the sustainability of newspapers. But there are many bright spots in what is happening and in the learnings from what has happened internationally. New revenue streams are clearly identified, and the digital world offers both challenges and opportunities. Newspapers will remain a fundamental and relevant part of the media for a long time, but those that succeed will have to transform and transform fast.
Due to space considerations, an edited version of this story was first published in the April 2016 issue of The Media magazine but is run in full on The Media Online.
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