SA online content challenge to print media, study says

Newspaper readership is on the rise in South Africa but online content is set to seriously challenge traditional media, reveals a recent South African report by professional services group PricewaterhouseCoopers (PwC)

Newspaper readership increased from 29.4 percent at the end of 2010 to 30.8 percent by late 2011.

PwC entertainment & media industries leader Vicki Myburgh said: “It remains to be seen if the growing readership trend for print newspapers will continue as online editions are attracting more readers. We expect print readership growth to slow and ultimately decline as digital readership expands. This will have a significant effect on the advertising growth of newspapers.”

The PwC study says that with the ongoing broadband penetration, digital content will be easily accessible and at a reduced price. This will appeal to many advertisers in the industry, currently dominated by traditional media.

“Classified advertising on the internet tends to be more easily searchable than in print. Furthermore‚ the rates are lower and ads can be inserted any time‚ can be changed easily and are not as limited with respect to word count,” notes Myburgh.

Competition in the emerging technology gadget sector has made tablets more accessible to readers of media. “Tablets are proving to be popular in SA and as prices come down‚ we expect penetration to expand,” said Myburgh.

According to her, as the penetration of tablets and news quality increases, paid digital will be positively influenced, and the report indicates that by 2016 paid digital unit circulation will be at 86‚000 from 2‚000 in 2011.

She further said that people still have a negative perception towards digital products as inferior to traditional physical format, but are willing to buy them at a discount.

Newspaper readership increased by 7.7 percent in 2011 but unit circulation has been affected over the past years as people tend to share newspapers. Last year there was a drop in unit circulation by 6.7 percent, and PwC expects the trend to continue.

The South African total newspaper market increased by 5.7 percent in 2011 to R11.4 billion (US$ 1.312 billion) compared to the previous year. The positive results are a result of growth in advertising spending by 10.8 percent and 6.4 percent decline in circulation spending.

The report predicts an increase of 20 percent annually in the next five years leading to a shifting from print to online media. It estimates an annual rate increment of up to R272 million (US$ 31.2 million) with general expenditure rising from R 1 million (US$11,000) in 2011 to R52 million (US$ 5.9 million) by 2016.

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