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Reg Rumney

SANEF’s New State of the Media Report

Against the backdrop of an economy plunged into a recession by Covid-19 and then roiled by unrest as it recovered, the news media has had a turbulent time these past two years.

In response, the South African National Editors Forum (SANEF) commissioned this second study into the state of the media two years on into the impact of COVID-19 on the media. Reg Rumney, who is the Research Associate, Department of Journalism and Media Studies, at Rhodes University conducted the study.

Click here to download the study

Ironically, according to the study, the pandemic increased the need for trusted, reliable news as the blow to revenue from declines in advertising and third-stream revenue made life difficult for publishers and the public broadcaster, as SANEF’s interim report in June 2020 detailed. Retrenchments and newspaper closures or rationalisation of titles and circulation cutbacks continued through 2021.

The research has found that the print sector was hardest hit by the pandemic lockdowns in 2020 and continued to suffer the effects long after as readers lost the habit of buying newspapers or voted with their rands against content that did not satisfy their wants and needs.

It also found that circulations of major newspapers audited by the Audit Bureau of Circulation fell across the board in the last quarter of 2021 compared to the last quarter of 2019, before the pandemic hit hard – though some publications fell more than others. Local papers audited showed some variance but overall were also down. Community or small commercial media print publications were reported to be knocked by the pandemic, but no hard figures are available. The problem with the decline in print is that newspapers still produce a great deal of the news as well as the revenue of news organisations from copy sales and advertising.

As newspapers have migrated online, the research reveals that they have found online ad revenue far lower than print ad revenue, as Google and Facebook receive the lion’s share of online revenue. These two internet giants also, in the view of publishers, benefit unfairly from news content shared on the platforms and South African publishers have taken them to the Competition Commission to try to, in their view, put matters right and be compensated.

As print news media declines and news deserts threaten, the idea of a new version of the defunct South African Press Agency, which supplied a steady stream of news from around the country for decades, has been suggested. This report notes that a South Africa-focused news agency is a promising project, though it needs a champion, and the failure of news wires connected to the Big 4 publishers to take off suggests it needs state and/or donor funding to get off the ground.

The study also discloses that TV news received a significant boost during the pandemic. The figures tell their own story, with a notable increase in TV news viewers. However, the pandemic TV viewership bump was followed by some decline in 2021.

Radio listenership, along with that radio news audience, seems robust, though measurement problems prevented precise tracking. Using advertising spending as a proxy, radio might have suffered a slight decline in 2021 to TV’s benefit, the study says.

The pandemic accelerated the move from print to online news with a surge of new viewers, though this seems to have levelled off in 2021 and was not equally distributed. The study says a big beneficiary of the move online was News24, which adopted a subscription model in 2020.

Although most people, judging from the figures for TV news alone, probably get their news from TV and radio, online news is making inroads, it says. Online news, which has low barriers to entry, has also seen the entry of new online-only outlets.

Among the online-only outlets are non-profit, donor-funded news organisations. This sector has contributed significantly to deepening news coverage, and donor funding protected it from the pandemic-induced advertising drought. Nominally non-profit is community radio, which boasts around 280 stations across the country. These range from those that compete with commercial radio stations to those that the Media Development and Diversity Agency (MDDA), responsible for community media, confesses will never be commercially viable. Indeed, the MDDA pumped noteworthy amounts of money into the sector in emergency funding during the pandemic – over and above the money it already spends each year.

Amid global debates about the role government should play in ensuring media sustainability, MDDA funding shows that the government is already funding media and underlines the need for transparency in any further funding by, for instance, diversion of government advertising spending to any media organisations.

The advertising drought was identified as the key problem for news media during the lockdown period and it recovered well, showing a 16% increase in 2021 against 2020. As long as it remains a major source of revenue for news media, how advertising is allocated and to whom it will be contentious.

Advertising, the report notes, is supposed to achieve a purpose for the advertiser rather than being a subsidy. What this study also reminds us of, is that the advertising industry is one of the most important public sources of measurement of news media as well as underpinning all but the non-profit news sector, despite attempts by news organisations to diversify revenue streams through media and non-media activities and by increasing subscription revenue.

Finally, in the light of an international examination of what can be done to make news media sustainable, including state funding, this report looks at the defining characteristics of public interest news, the all-important flow of verified and verifiable information the society and economy depends on.

 

 

7 (2)

Media sustainability and universal access to public interest journalism

This is the Executive Summary of the Media Sustainability & Universal Access to Public Interest Journalists.

This report seeks to contribute to SANEF’s mission of achieving media sustainability and universal access to public interest journalism, and it forms part of SANEF’s response to the Independent Panel Report in the Inquiry into Media Ethics and Credibility, prepared by retired Judge Kathleen Satchwell, Nikiwe Bikitsha, and Rich Mkhondo. In particular, Recommendation D35 calls on SANEF to—
“[s]upport research into the financial viability and sustainability of all forms of news media, examining international approaches to funding independent media, including but not limited to taxation incentives/exemptions, allocation of public funds, the pursuit of royalties, levies on online advertising revenue routed offshore by online platforms, or other such methods.”

This report does not purport to offer the solution to media sustainability in South Africa. It does, however, present a series of policy options to promote media sustainability drawn from local, regional, and international comparative practices and examples for further deliberation and debate. Notably, this report complements a variety of recent and ongoing media sustainability initiatives5 and offers the reader a high-level overview of options that may be tailored for South Africa’s unique media landscape. Specifically, this report presents eight media sustainability strategies and over fifteen direct policy considerations.

These include:

• The establishment of a Media Sustainability Fund (MSF): One of the priority media sustainability strategies for SANEF is the possible establishment of an MSF. The mission of the MSF — which may include what is referred to as a local content fund in the Independent Panel Report6 — is to support the development, sustainability, and independence of public interest media organisations, in pursuance of the right to freedom of expression and democratic principles. In fully considering an MSF, this report considers its potential mission, eligibility criteria, sources of funding, and its structure and oversight.

• Promoting access to public interest news websites: Alongside an MSF, substantially reducing data costs and advocating for the zero-rating of public interest news websites and content have been identified as priority measures for SANEF. In considering these sustainability options, data costs, internet access, and possibilities related to zero-rating access to public interest content are considered.

• Fostering competition in the digital economy: In line with international trends, this report notes international developments, particularly in Australia and the United States, relating to fostering competition in the digital economy, including through enhanced engagement with the so-called FAANGs (Facebook, Amazon, Apple, Netflix, and Google). In the South Africa context, this report suggests possible areas of engagement with South Africa’s Competition Commission.

• Considering tax relief and other state support schemes: Allied to fostering competition in the digital economy, tax relief and other state support schemes are documented, including possibilities associated with converting license fees to a bespoke tax, the introduction of a new online advertising tax, and various other tax relief proposals for public interest media organisations and donors, including, for example, a proposed amendment to South Africa’s Income Tax Act to allow for tax deductions for businesses, donors, and individuals who subscribe to a community and local media.

• Engaging with different subsidisation, subscriptions, and other income-generating models: With an emphasis on comparative international examples, the benefits of subsidies are discussed, alongside the potential of “access tiering” — the practice of offering memberships and subscription discounts to older persons, students, and social grant recipients — and new business models.

• Assessing the potential of coupon and open-access systems: By way of new sustainability strategies, this report introduces a possible coupon and open access system which facilitates subscriber access to premium content on multiple public interest news websites; and it investigates the openTrust model, which promotes corporate social investment.

• Considering the establishment of public interest wire services: To assist with what Frances Cairncross refers to as the “humdrum task or reporting on the daily activities of public institutions” and to promote community media, the establishment of public interest wire services to assist under-capacitated public interest media organisations and ensure that additional public interest media content is produced and distributed for publication, particularly on matters relating to the exercise of the democratic function and its institutions; and to (2) collect local content from community media organisations and distribute it to larger media houses for a fee is discussed.

• Promoting education, training, and leadership: Lastly, this report reflects on the importance of fellowships to train young journalists, continuing development opportunities for mid-career journalists, and the need for the South African government to fund media information literacy (MIL) initiatives.

The report concludes by noting that despite years of decline in advertising revenues and the devasting impact of the COVID-19 pandemic, public interest media actors are proving to be resilient, working tirelessly to develop new media sustainability strategies. This research seeks to complement this tide. With concerted and collective action — and the requisite political will — strides can be made in not only sustaining public interest journalism in South Africa but working towards an enabling environment in which it can grow and flourish.

ACKNOWLEDGEMENTS

The South Africa National Editors’ Forum (SANEF) is thankful to everyone who has participated in this process.

For initial reviews of the preliminary draft of this report, SANEF is thankful to Izak Minnaar, Kate Skinner, and the amaBhungane Centre for Investigative Journalism.

For interviews based on the preliminary draft of this report, SANEF is thankful to Kate Skinner, Nwabisa Makunga, Professor Franz Kruger, Bilal Randeree, Izak Minnaar, Mary Papayya, Adriaan Basson, Mahlatse Mahlase, and Sbu Ngalwa. For reviews on the further draft of this report, SANEF is thankful to all of the participants who participated in the SANEF Ethics and Sustainability webinar on 5 May 2021, and to Phathiswa Magopeni, Martina Della Togna, Dunisani Ntsanwisi, Professor Franz Kruger, and Kate Skinner for their comments.

Importantly, SANEF is thankful for and acknowledges the recent research by Dr Harry Dugmore1 and Reg Rumney which has contributed significantly to this report. This report was prepared with the assistance of ALT Advisory. ENDS