Last week two of the big players in the free sheet newspaper space indicated their intention to gradually withdraw from the Community Press Association (CPA), an independent body representing publishers’ interests.
It is another step in a process that could eventually lend the local free sheet market the balanced complexion envisaged by the government’s Media Diversity and Development Act, passed last June “to encourage ownership, control and access to media by historically disadvantaged communities”.
For years Caxton, Independent Newspapers and Media 24, who between them publish the vast majority of South Africa’s “knock and drops”, have dominated the CPA. But it now looks certain that Caxton and Independent will pull out of the organisation, making way for marginalised members.
Breaking the news of the conglomerates’ looming departure last Friday, Business Day commented that “while [the CPA] aims to represent the interests of all owners of community newspapers, smaller publishers claim they are often sidelined as the big players … work to protect their interests, rather than those of the entire industry”.
Natasha Stretton, general manager of Print Media SA, the umbrella body that embraces the CPA, told Media Weekly that Caxton’s withdrawal proposal recognised the need for greater diversity within the body. “There’s an acceptance that Caxton’s requirements are met by their own corporate structure,” she says.
Stretton also points out that at the beginning of the year, the CPA embarked on a “transformation strategy” with the key goal of giving publishers access to collective bargaining power on paper and print costs. “This new approach highlighted the different interests of the various members and ultimately led to the review of the CPA structure.”
Given the number of titles owned by Caxton and Independent (78 of the CPA’s total 166, according to Business Day), as well as their control (with Media 24) of the newspaper printing market, bulk deals on procurement clearly are not an imperative.
But while the restructuring of the CPA is a fait accompli, the body’s eventual make-up is still a matter for speculation. One camp would like to incorporate all new publishers funded by the Media Development and Diversity Agency (MDDA), the government-corporate partnership that will soon be supporting community and small media organisations with serious financial challenges. Another group of members is arguing for less sweeping adjustments to the CPA’s structure.
A sticking-point, it seems, is the body’s future financing. With Caxton and Independent out, the CPA will lose a hefty chunk of its operating capital, which comes from membership fees set against a newspaper’s circulation figures. As Business Day makes clear, changes to the CPA’s structure could result in lower fees that take account of a title’s revenue, and therefore attract the poorer, rural free sheets that “may have the support of circulation, but not of advertisers”.
Whatever the scenario, the availability of funds for the CPA’s various training initiatives is likely to be a crucial question. Stretton says that the body’s transformation strategy has identified broad training areas, including the development of sales and business skills specific to a media environment. “These haven’t been implemented yet, as the strategy is still new,” she adds.
Nevertheless, when the time comes to act on the strategy, it’s doubtful that enough independent publishers will have joined to make up for the shortfall caused by the big groups’ withdrawal. So perhaps the CPA’s best restructuring bet is indeed some sort of alignment with the MDDA, whose financing is secured.
The Government Communications and Information System (GCIS) has committed R10-million to the MDDA from 2002 to 2004, while various media owners have pledged another R10-million over a five-year period.
As for the financial upside on the free sheet titles themselves, AC Nielsen’s AdEx reveals that the top advertising revenue earner for the period August 2002 to July 2003 is the Sandton Chronicle, at around R24,6-million. The other weekly titles in the top five are Vaal Ster (R21,9-million), Fourways Review (R20,8-million), Roodepoort Record (R19,5-million) and Randburg Sun (R18,3-million).
As all these titles except the Vaal Ster belong to Caxton, they are on their way out of the CPA. But since Caxton, along with Independent, contributes a significant share of the R10-million pledged by media owners to the MDDA, here is the back-handed argument for the CPA’s alignment with the agency.
And lest the obvious point is made that the most successful titles in this segment are those with a majority “white” footprint, there are always examples that buck the trend.
BigNews, a monthly free sheet focused on small business and black economic empowerment, was launched more than eight years ago with a loan of R150 000 backed by the government’s finance agency, Khula. Initially a Western Cape title emulating the direct-mail distribution of the suburban knock-and-drops, it found the model unsuitable for its market and identified “agents” with small business readers as its clients, where the paper is provided for collection.
Today it has 1 000 agents countrywide, a national circulation of more than 165 000, and advertising revenue of about R250 000 per issue.
Whether or not the CPA and MDDA join forces, they would both do well to note the BigNews story.
Media Weekly is produced for the Mail & Guardian by The Media magazine and is edited by The Media’s editor Kevin Bloom.