SA media battles falling revenues: Reuters study

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 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 for the news.
The research was conducted 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 percent drop in ad spend last year for television, 5,6 percent for radio, and 7,7 percent 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 percent 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.

Consumption of print media is also continuing its decline, as data for the first quarter of 2019 shows that newspaper circulation declined 5 percent year-on-year, the research indicated. “Daily newspapers were the biggest losers, with a 10,5 percent drop, but weekly newspapers were almost as badly affected, with a 7,9 percent decline year-on-year,” the report read.
Data for the last 10 years shows a 49 percent 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 the 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 percent 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 percent using messenger apps, 40 percent using social networks and 39 percent 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 percent) 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. – Fin24