SA newspapers not dying, says PwC report

The survey shows that contrary to the opinion of many experts, the newspaper industry is not dying - even though advertising on online media forums continues to grow at a faster rate.

Newspaper advertising is expected to grow 6.2% a year to R10.1bn by 2017, while online advertising will grow 27% a year, but still only be worth R506m by that date - only 5% of newspaper revenues.

"The South African market bucks the trend seen in other nations. Its revenues are increasing even while the market evolves to digitised formats ... the threat from digital is now correctly seen as an opportunity for existing providers, which have the content and distribution channels to engage large audiences," the 288-page report concluded.

Vicky Myburgh, PwC's entertainment and media industries leader for southern Africa, said that while most of the growth would be from digital technology, the traditional non-digital media would still dominate the industry over the next five years.

Internet access drives growth

The landscape would not become unrecognisable, as many pundits had predicted.

What the survey shows is that South Africa is growing faster than the global entertainment and media market, which is expanding at 5.6% per year. As in SA, internet access is the major force behind the growth.

In a global context, internet advertising is set to be worth over US$185bn in 2017, equal to 31% of the world's total advertising market. This would make it the second largest advertising medium after television.

The slowest growing segments are educational books and music, both growing at 0.4%. The music industry is still struggling, as physical sales of recorded music drop off and digital sales are not yet bringing in enough bucks to compensate.

Myburgh said consumers, especially the youth, were increasingly comfortable with piracy and the music and publishing industries had not been agile enough in shifting to digital to give consumers what they wanted.

In South Africa, books were struggling as they were "largely unaffordable", lumbered with 14% VAT, and mostly written in English or Afrikaans - not the home languages of most people. Yet magazines and newspapers continue to grow, partly because they do not cost as much, and are likely to be read by more people, she said.

Source: Business Times, via I-Net Bridge