New strategies for old media - understanding media convergence in South Africa. Presentation made at the launch of Media Management in the New Age: How managers lead media in Southern and Eastern Africa on 2 September 2013.

1. Jude Mathurine
New Media Laboratory
http://nml.ru.ac.za
Presented on 2 September 2013 @ launch of Media Management in the
New Age: How managers lead media in Southern and Eastern Africa
‘New’ strategies for
‘old’ media
Media convergence approaches in SA

2.  ‘Convergence’ generally describes the coming together of parts
that were formerly discrete to constitute a new whole.
 Media convergence occurs in the areas of content, technology,
business models and professional activity (Jenkins 2006).
 Media convergence describes the processes, phenomena and
consequences that often follow from the digital and networked
nature of contemporary media production, distribution and use.
 Some of these are cross media collaboration, media
consolidation, integrated newsrooms and multiplatform
publishing
Convergence

3.  ‘Convergence’ is NOT SOLELY TO BLAME FOR NEWS
ORGANISATIONS HAEMORAGGING MONEY, SACKING
JOURNOS OR CLOSING.
 Other reasons include recession, unemployment, poor content,
high debt, increase in cover price, inept management,
increased local competition
 However, convergence poses large threat for media
managers who fail to understand its manifestations, or who fail
to act on opportunities to adopt convergence strategies that
will suit their organisation, consumers and customers.
The convergence challenge

4.  USA - newspaper circulation dropped by 30 per cent from 62.3 million in 1990 to
43.4 million in 2010 (Grueskin et al 2011).
 USA network TV news audiences fell by half since 1980 (Guskin & Rosenstiel 2012).
 USA newspaper advertising revenue less than half of what it was in 2006
 United Kingdom - circulation of paid-for local and regional newspapers in the UK
plummeted by 20 per cent (2007-2009).
 UK communications regulator Ofcom found that Great Britain’s Internet
advertising expenditure (ad spend) exceeded television and print advertising in
2011
 Turkey newspaper circulation declined 6 per cent (2007-2009)
 Greece newspaper circulation down by 18 per cent (2007-2009)
Why convergence?

5. South Africa - Audit Bureau of Circulations indicates SA
daily newspaper circulation down over 5% per year since
2008

6.  Old economics of media production and distribution were
dependent upon
 aggregation of a large number of consumers (mass audience),
 obtaining economies of scale in production and distribution of
content,
 and provide of scarce commodity (e.g. news journalism) to the market
at a cost relative to input expenses, market demand etc.
 However, media’s principal income based on connecting
consumers (audience) to the market (advertisers).
 The traditional media were the primary mediators of trusted
news and information due to specialized access to sources
and technologies of media production
The traditional economic model

7.  Certain groups and classes in our societies migrate attention to
DVDs, satellite TV (Africa has an estimated 7.6 million pay TV
subscribers [Balancing Act 2012), PCs and mobile phones and online
channels like YouTube, Facebook, online newspapers and blogs.
 Limited traditional media content has been devalued by almost
infinite supply of competitive professional and amateur produced
content
 The new media economy is an attention economy.
 In SA, for example, 22% go online everyday while only 17% of
population read a daily paper (de Lanerolle 2012)
The new model

8.  African print circulation actually grew (up 4,9% in 2009)
 One in four Africans own a radio receiver
 15% of Africans had access to Internet in 2012 (ITU) but greater
number had access to mobile phones.
 Among young audiences we see generations growing up
without the desire to use traditional media.
 In many African countries we see hybrid audience media
consumption patterns at top LSMs which creates new
competition for traditional media for attention and adshare.
Audience flight

9.  Advertisers realise that digital and networked advertising distribution
is more targeted, customisable and measurable than traditional
models
 Facebook, Google connect the market directly to consumers
through sophisticated tools that help target advertising at users
based on their social graph, geographic location, buying habits
and other online behaviours.
 In 2012, the South African online advertising market had an
estimated value of R1.52 billion with annual average growth of 30-40
per cent. However, some estimate that companies such as Google
may account for at least half of local online revenues
Ad flight

11.  Slash costs:
 Retrench
 Close loss making printing presses
 juniorise newsrooms, hire interns;
 hire more contract staff, fewer tenured staff,
 outsource reporting
 Try to sue Google
 Charge for online content through paywalls
 Fund content production through sponsorship or
donations
Industry response

12.  Source funds through state subsidies e.g. Sarkozy gives
€600m in emergency aid to troubled newspaper industry.
Every 18-year-old gets a year's free subscription to the
paper of their choice
 Harness free User Generate Content including citizen
media to provide more content
 Push for tax breaks for news industry (USA)
 Media organisations convert status from commercial to
not-for-profit service organisations
Industry response

13.  A convergence strategy helps media cos cope with fragmenting
media consumption, and helps make content and online brand
ubiquitous by being where your consumers are – consequently
opening opportunities for digital advertisers and new revenue
streams
 For top LSMs (Living Standards Measure) convergence channels may include
search and social optimisation and marketing, app and mobile website
development, blogs etc.
 For low LSMs convergence channels might include outdoor advertising and
SMS advertising
Convergence: The long game

14.  Structural convergence may involve consolidation (merge
operations and increase ownership of content, production and
delivery (eg. Naspers, Nation Media Group)
 However, it may also involve strategic partnerships for content
sharing between traditional media (e.g. local newspaper tie-in with
a community radio station to combine ad sales)
 Save costs by consolidate editorial roles across large media group
e.g. sub-editors, sports reporters report and work for multiple titles
e.g. Media24 Afrikaans newspaper titles.
Convergence responses

15.  Classifieds markets decimated by free online classified companies like
Gumtree or Craigslist. Recruitment advertising lost to LinkedIn, PNet, jobs
noticeboards etc. Media organisations create or buy own classifieds
websites for dating, jobs (CareerJunction – Times Media Group), classifieds
(OLX-Naspers)
 Premium SMS revenues (although mobile companies may take up to 50%
for premium SMS line).
 SMS used as circulation builders e.g Daily Nation & Star classifieds
 Build aggregator websites to house content from all group titles e.g
Independent Online, News24
Convergence responses

16.  Create or buy out new digital platforms for publishing and revenue
generation e.g. Caxton buys up mobile business Foneworx.
Purchase may be used to leverage mobile enabled discounts
 Be the bank – Kenya’s Nation Group’s N-Soko and Nation Hela card
allows international money transfer
Convergence responses

17.  Become the store. Convergence between online
shopping and magazines (see Media24’s Spree)
Convergence responses

18.  The future of journalism as a public service and as a
commercial pursuit is dependent on the strength and viability
of its organisations
 Media managers require an in-depth understanding of
convergence and local and international online markets and
marketing to adapt strategies that will ensure future viability of
the organisations they manage.
 Follow me @newmediajude on Twitter
Final word

19. Follow me
@newmediajude on Twitter
Presentation will be made
available on Slideshare
Last word