The launch on Sunday of a new title is the first clear shot in a newspaper war likely to radically change the face of the South African media.
The Sunday World, aimed at a wealthy, top-end black readership, hits the streets this weekend, drawing counter-attacks from its competition, the Sunday Times and City Press. Eight days later, the country’s first daily sports paper, Sportsday, takes on The Citizen and the Sowetan, while The Citizen draws a bead on a weakened Star.
Independent Newspapers – reportedly planning a competitor to Sportsday – is set to begin a massive purge of staff on its mainstream titles in an effort to shore up its profits.
On the flanks, the government this week indicated it will launch a renewed push for media houses to diversify their ownership.
There have not been press wars of this magnitude since 1985. Those battles resulted in the closing of the Rand Daily Mail and Sunday Express and – with the launch of Business Day and several small, independent newspapers, including The Weekly Mail – the birth of niche newspapers.
Meanwhile, the influence of Cyril Ramaphosa on the media world is hanging in the balance as market talk of efforts to oust him as the chair of Times Media Limited (TML) grows.
The paper wars and publishing battles come at a time of ever-shrinking circulation and falling advertising revenues.
But while the newspaper industry may be struggling, it has been the scene of more corporate shuffling than any other sector of the economy. The shifts seem set to continue with the battle lines drawn for an all-out pricing war, as editors try to beat back the challenge from Sunday World.
Nasionale Pers’s City Press will drop its cover price – for just one week -from R3,20 to R2. In an aggressive marketing campaign, the newspaper will also launch a R1-million Lucky Bucks competition on Sunday.
At TML, editor Mike Robertson was reportedly stopped by his board from cutting the cover price on the Sunday Times’s City Metro edition -although he denies he ever had plans for a drop in price. He also stopped the Sunday World’s staff from gaining access to the Sunday Times picture archives and refused to take advertising from Sunday World.
Robertson says he stopped one advert which he didn’t like and he won’t allow any newspaper to use the Times’s photographic archives. “We welcome the competition,” he said.
Both newspapers are owned by TML. Sunday World is a joint venture involving TML and the black conglomerate, New Africa Investments Limited (Nail) – which is a major player in the National Empowerment Consortium conglomerate which owns a controlling interest via Johnnic in TML.
Robertson is undeterred by the Sunday World’s sibling status. He lost two key staff to the World: its editor Fred Khumalo and general manager Bongani Keswa. More serious, he apparently objects to the pitch of the new paper.
Sunday World is aiming for the same wealthy black readership which the Sunday Times is working to cultivate. This is the market segment most attractive to advertisers. With this target readership, Sunday World says that it has already achieved its advertising ratio for the maiden edition.
Insiders thought that the newcomer would be more downmarket. Sunday Times managing editor Peter Malherbe still holds that view. He said the new title won’t be competing for the same top-end market the Sunday Times sells itself to.
“We don’t expect to lose any sales. We’ll be a more quality product than Sunday World. We’re the top end of the market – we’ll protect that. They should be competing head- on with City Press,” Malherbe said.
Just in case the World is competing head-on with the Sunday Times, however, the Times has pre-emptively beefed up its sports coverage, especially the soccer section, and is launching a new consumer-oriented investigations team.
“We’ve obviously been getting ready,” says Malherbe, “with one or two big investigations lined up. We’ll have some good stories on Sunday.”
The paper has also moved forward plans to hire an Africa editor to increase news coverage of the continent. To entice new black readers, the Sunday Times has introduced the readRight educational supplement.
The World seems to be going for the same market as the Sunday Times’s extra edition, which carries the City Metro section and is aimed at the black market. The City Metro has shown significant growth in the last few years in these areas.
The new kid on the block is small competition to its big brother. Sunday World has an initial print-run of between 150 000 and 200 000 newspapers and limited distribution in Gauteng, the Northern Province, North- West, Free State and the Northern Cape. It has chosen not to contest KwaZulu-Natal and the Western Cape, which have strong regional titles like the Sunday Tribune and the Sunday Argus.
“Nothing focuses the mind like competition,” says Tim du Plessis, deputy editor of City Press. With a readership of 1,5-million, City Press is the newcomer’s closest competition. The paper is Nasionale Pers’s only hold on the English market which it covets and it is pulling out the stops to defend this market space.
Sportsday, South Africa’s first daily sports paper, is hoping to steal readers from The Citizen and Sowetan when it is launched by TML on March 15.
Its R1,70 cover price is the same as the Sowetan’s and 10c more than The Citizen’s – and the new paper will tap into the respective strengths of the two: strong soccer in the Sowetan and racing content in The Citizen. Racing will be provided through TML’s 50% share in Computaform, the leading racing betting guide.
Hoping for 35 000 to 40 000 readers in Gauteng initially, the paper plans to grow to KwaZulu-Natal and the Western Cape.
Advertising support has been tough, but Rob Wicks, Sportsday’s general manager, is bullish: “It’s heads down and go. It’s tight out there and all dailies are suffering but remember we are making a conscious effort to run our ad content at 20% to 25%.”
He says advertisers are adopting a wait-and- see approach, watching how circulation does.
The paper is aimed at sports fans, 50% of whom will be black, 35% white and 15% coloured and Indian, and will make history with Bronwyn Wilkinson, the first woman editor of a major daily newspaper.
With Nasionale Pers and TML expanding, it is only the foreign-owned Independent Newspapers group which is cutting back. Morale is low at its operations in Cape Town, Durban and Gauteng, where notices were put up this week advertising voluntary retrenchment packages.
Yet Independent Newspapers is not losing money. In an interview with the Financial Mail this week, Irish magnate Tony O’Reilly said: “We have trebled the profits of the company…”
This week, the group’s chief executive officer, Ivan Fallon, said: “Government itself is retrenching. There isn’t a company which hasn’t gone through this. We must make more efficient use of resources and take out layers of [unnecessary] costs.”
Some at Independent Newspapers see the staff cuts as part of its transformation plan to get rid of dead wood and to bring in black talent. But others point out that much young talent has left or is looking to leave because they question the pace of change at the company and its commitment to newspapers in South Africa.
“Morale in the building has gone through the floor,” says a senior Independent employee. “It’s at a record low. O’Reilly has cut to the bone; now he’s working on the marrow.”
“Management has had their blood replaced by ice,” says another source, who contends editors fighting over their own salaries are uninterested in their staff problems.
O’Reilly is likely to face a rougher ride from the South African authorities. Not only is his friend, President Nelson Mandela, about to retire but it is well known that the push to diversify the print media is a particular bugbear of Deputy President Thabo Mbeki.
At a meeting last week, Independent Newspapers told Mbeki that it would find a black empowerment partner. The company will not sell a share of its national holding to black empowerment partners, but it is likely to sell such partners’ shares in individual titles and regional operations. Said Fallon: “We have much more effective plans for empowerment than bringing in a minority shareholder.”
Media is a very popular investment for black money: BusinessMap has listed 40 empowerment consortiums with significant media interests. Yet only one – TML – of the four major newspaper publishers has significant black ownership. Caxton is about to swop 42,9% of its shares with Nail, which will give Nthato Motlana’s holding company joint control of the daily Citizen.
“If that were to happen, it would be terrific,” says Caxton joint managing director Noel Coburn. “We like the Nail people and have known [Nail media division head] Zwelakhe Sisulu for 10 years. We also have a good working relationship with the Sowetan people.” The Sowetan is wholly owned by Nail.
As the media giants kick up dust storms on the battlefield, the government is not impressed.
“We have made the point that South Africa’s electronic media is more vibrant because of diversity. This is not happening with regard to the print media and this is a matter of concern,” says government representative Joel Netshitenzhe.
The Government Communication and Information System (GCIS) will finalise government policy on media diversity this year, he says, and new competition law can probably be used to end newspaper monopolies. The government is particularly keen to prevent monopolies which own both publishing and distribution interests.
This might spell problems for Caxton, which recently acquired The Citizen. Caxton has also just invested in a new printing plant in Industria, Johannesburg, with plans to duplicate those facilities in other parts of the country. It also has large book and text book publishing interests.
The Citizen is the dark horse of the daily newspapers, a tabloid-sized daily started by former rugby supremo Louis Luyt that is trying to shed its perceived right-wing leanings.
It is likely to undergo a revamp and is to move to new offices in Industria, where a new computer system is to be installed. Its Doornfontein offices are a veritable media museum where some reporters still work on typewriters.
Coburn, characteristically playing his cards close to his chest, says Caxton is assessing how to develop the paper . “We’re very excited. Fundamentally the product has great potential. It has a big, well-established readership. Ad revenue and circulation is buoyant. It will be better printed, better and more timeously distributed.”
Editor Martin Williams is similarly upbeat. Local staff copy has increased in the year or so since Williams took over from Johnny Johnson. “I think our strength is as a paper of record. We’re hoping to get as much backing as possible to beef up editorially,” says Williams.
He points to the presence of new chair Frederick van Zyl Slabbert on the board as a sign the paper is in a new swing, which he adds “also gives credibility to the paper”.
The paper’s demographics bear out the new plans: 60% of its readers are black, with 35% white and 15% coloured and Indian.
A worrying aspect of the print media is the lack of diversity of media voices, says Clive Emdon, the director of the Independent Media Diversity Trust.
The South African newspaper industry over the past 25 years has been characterised by cartels which own the major interests and newspapers, he says. In the past five or six years, he says, this has intensified: “They are more concerned with their internecine wars than the diversity of media and increasing the number of newspapers.”
The government’s criticism of local newspaper groups hinges on the media’s focus on its mainly “comfortable, middle-class constituency”. The big conglomerates will ultimately retain the same readership they always had and not progress into new markets, says Emdon.
“The way in which we are going to get diversity is through many small radio stations and newspapers at community level – to debate and contest issues at a local level.” This would service the two-thirds of the country’s population that he says are living in Third World conditions.
And with funding being cut by a big operation like the Independent Group, it makes roll-on funding for smaller newspapers harder to get, which is essential for the hundreds of small community newspapers and magazines.
A part of the problem, he says, is also that the launching of new radio stations is being hindered by the Independent Broadcasting Authority, which, due to staff and funding cuts, cannot speedily process applications.
“There’s funding for 16 new community radio stations, but they can’t get their licences,” says Emdon. They are part of a group of 254 applicants who are hoping for a much speedier resolution.
Emdon also warns against the looming spectre of syndication: senior editorial staff being lumped together in teams to handle news for a pool of newspapers.
The problem with the pooling journalists – such as the financial writers for Business Report, which is inserted into four regional titles and has just launched on Sundays – is that it creates a lack of diversity. This “when the country needs more publications, more writers and a greater number of reporters and voices”, Emdon says.
Most of the country’s newspapers are belatedly coming to the party with Internet news services. (see sidebar)