Big Stories Boost Newspaper Circulation: Price Waterhouse

The South African newspaper market showed growth of more than 6% last year, buoyed by big stories like Nelson Mandela’s death and Oscar Pistorius’s murder trial.

This is according to PwC’s Entertainment and Media Outlook: 2014-2018 report.

“High-profile news stories such as the trial of paralympian Oscar Pistorius and the death of former president Nelson Mandela resulted in a spike in total newspaper circulation in the fourth quarter of 2013.

“Consumers chose print newspapers as a key source of information and reflection,” the report stated.

The country’s total newspaper publishing market grew at a compound annual growth rate (CAGR) of 6.2% last year, generating almost R11bn in revenue.

This was up from R10.3bn in 2012, according to the report.

Most of the growth came from advertising, which rose to R8.2bn last year from R7.7bn the year before. Print still accounted for nearly 98% of the total.

Advertising revenue was expected to grow from R8.2m in 2013 to R11bn in 2018. This was a compound annual growth rate of 6%.

Revenue for digital remained low, however, a growing number of titles had created paywalls to maximise revenue from digital content.

The report presented annual historical data for 2009-2013 and annual forecasts for 2014-2018 in 12 entertainment and media segments.

“Improving education, consumer spending power and an increasing thirst for ‘need-to-know’ news are driving the steadily growing demand for newspapers, as well as providing encouragement for investment in new advertising campaigns,” PwC entertainment and media leader Vicki Myburgh said.

“With digital technology still out of reach for the majority of the population even in urban areas, print newspapers fill the time for commuters using public transport.”

She said this led to small growth in tabloid newspapers’ circulation.

Myburgh said the low level of broadband in SA meant that print publishers were less affected by digital.

“For many consumers, print remains the first news medium, which will ensure that print revenue will grow for years to come.”

She said newspaper revenue would also benefit from the country’s expanding and urbanising economy.

“This expansion will provide a boost to the newspaper publishing market as reaching rural audiences remains a challenge, both in terms of the distances involved in getting the newspapers to the areas and finding outlets to sell the newspapers.”

Among the biggest change drivers for the industry were tablets and mobile devices.

Cost cutting and the restructuring of newsrooms, often implemented to maintain profit margins, had forced publishers to “right-size” their businesses for new digital ways of working.

However, the report warned that cuts could only go so far before quality started to suffer to a point where consumers could find the same content for free elsewhere on the internet.

Print would continue to dominate revenue in the near term, but the shift to digital would have an effect.

Newspapers would need to incorporate social media for picking up and breaking news if they were to remain relevant and use digital and/or print coverage for features, analytical insights and long-term investigations.