Resistance Is Futile

Amongst the villains who featured in the legendary Star Trek series were the Borg, a nation bent on total domination and subjugation.

All-conquering races of aliens, the Borg’s conquests were always prefaced by the ultimatum: “Resistance is futile. You will be assimilated.” And opponents who refused assimilation were annihilated, regardless of cost.

In South Africa today, the terrestrial Borg of the publishing world are the big publishing conglomerates - Caxton, Johncom, Media24 and Independent Newspapers - who are going head to head in the rush to buy up existing community and grassroots titles, carve out new markets, and start new titles.

The shake-up has also seen a realignment of advertising sales houses serving the sector, and an apparent breakdown in the long standing “gentlemen’s agreements” between the conglomerates around territorial spheres of interest.

As part of the realignment, and compounding the Borg effect, Caxton has withdrawn all its titles from the only specialist advertising sales house focusing on the community print sector, CAPRO - which turned over almost R75-million last year.

Caxton’s titles are now represented in-house, at the National Advertising Bureau (NAB), and are being bolstered by a string of new start-up titles that often directly mirror CAPRO’s remaining clients.

A preliminary scoping report by the Association of Independent Publishers (AIP), as part of a wider Media Diversity and Development Agency (MDDA) funded census of the sector, notes Caxton’s expansionist plans in KZN, with the buyout of the Rising Sun Group (six titles) and the North Coast Courier.

Caxton’s move into KZN appears to have prompted Media24 (through its local Witness Group) to purchase the South Coast Fever and Herald Group of newspapers.

“This in turn appears to have sparked an unusual alliance between Caxton and the Independent group to jointly launch a new freesheet in Pietermaritzburg in direct opposition to Media24’s local neighbourhood titles,” the report says.

And just to make it even more interesting, Caxton also launched the first of 20 new Get It community magazines in KZN’s Newcastle district.

The KZN turf war is mirrored in the Eastern Cape, where Johncom and Media24 are facing each down after the latter’s incursion into the Bisho and Mthatha (previously Umata) areas.
Johncom has responded by going on an aggressive buying spree, snapping up 10 of the province’s oldest, most credible or most vibrant grassroots titles, including the Wild Coast Herald, based in Port St Johns, the Talk of the Town, based in Port Alfred and, most recently, the Grahamstown Shoppa.

They have also launched the East Cape Agriculture Review, with plans to open a similar title in the Western Cape, traditionally - in the English market - an Independent Newspapers stronghold.

There are many theories why this is suddenly happening, but the answer appears simply to lie in the exponential growth in revenues earned by the conglomerate media’s so-called “community” newspapers.

They earned a whopping R605-million from advertising in 2004, up 51 percent from 2003 earnings.

And this figure is, in all likelihood, far higher as both AdEx and MIW classify neighbourhood and small town newspapers owned by the conglomerate media houses as “community” press. They do not measure ad spend in the majority of independent grassroots newspapers that operate in townships and rural regions.

Earlier this year, media research company AC Nielsen reported that the sector’s performance outstripped the mainstream print media over the past five years, posting an impressive 112 percent increase in ad spend.

This realisation that there is mega money to be made in the sector - as well as a fear of being left behind by the boom - has set off a veritable feeding frenzy by the big players.

But now warnings are being sounded, amidst growing fears that the vibrant, diverse and divergent voices of small, independent publishers and grassroots titles will be homognised or lost, as they lose the fight to survive. There are also real fears that the big players will move the production of their acquisitions in-house - and out of the communities they serve - to save costs.

Owning multiple titles in different communities will also mean that they can offer advertising packages across a range of titles that offer a wide reach, as well as generally capatalise on the other economies of scale, like reduced print and material buying costs.

There is increasing talk of a tipping point, a point of no return, being reached where the Borg will dominate and small independent voices will be stilled, not by harassment and legislation as was the case in another, now distant South Africa, but by the greed of big business.

Says Professor Anton Harber, Caxton chair of journalism at Wits University: “In the US and UK, the phase in which the local press was subsumed into national groups was a tipping point for media concentration and loss of diversity and local-ness. The danger is that there is likely to be increased homogenisation (as resources and editorial copy are shared across different papers) and less involvement in local issues and concerns, because these groups are usually run from a distant centre by people with little feeling for small communities.”

At the same time, there is also some anger at the perceived cynicism of the big media houses who, along with government, donate millions of rands each year to the MDDA to help fund the growth and diversity of small independent media in South Africa.

“There is a perception at grassroots level that the conglomerates are cherry-picking the most viable independent publishers, at the same time that MDDA grants for brand new titles are fragmenting already marginal or fiercely traded rural media markets,” says AIP president, Justin Arenstein. “The independent publishers are caught in between, and are often left with little choice except to sell out.”

This is strenuously denied by Libby Lloyd, CEO of the MDDA, who says: “— the MDDA has supported new initiatives to do feasibility studies and business planning in areas where there are other titles, however only in such instances where such publications are wanting to appeal to currently neglected audiences (for example publications that are wanting to appeal to rural or township audiences and produce papers in languages other than English or Afrikaans).”

As for the sudden interest by the big players in “community” media, Lloyd says:

“The existing major media players which run local knock-and-drops are benefiting from this - rather than independently run papers. The growth in the involvement of major media houses in the sector appears to be as a result of national advertisers wanting to advertise local branches in local newspapers.”

The only way to overcome this, says Lloyd, is for independents to organise and ensure advertisers are aware of their existence, as well as to market themselves, provide clear readership profiles of their papers and ensure that it is easy to place adverts with them.

“No advertiser is going to contact hundreds of papers individually,” she says.

Andrew Gill, Johncom’s head of business development, says he is aware of the danger of titles losing their individuality and plans are in place to stop this happening.

“A central hub removes diversity of voice and the relevance of local community news. The real key to successful, sustainable newspapers is a diverse set of products and quirky and unique news.”

His group strategy, he says, is to “take risks” and produce products that are relevant and have a long term sustainable outcome.

But the real clue to why Johncom - and others - are taking such an interest in this sector is in Gill’s comment that “national advertisers have a demand for reach. If you do not have the scale in terms of five to seven products, you will never go beyond the community you are serving.”

In another time and another life as editor and as part owner of a feisty community newspaper in Jeffreys Bay, territory that SAAN (now Johncom) considered their own, I saw first hand how the Borg operates.

We found ourselves in a position where the (SAAN-owned) opposition was giving away advertising at prices that were crazy and unsustainable and would have destroyed us if we tried to match them.

Business became very tough and I moved on as our paper became less and less profitable, although my erstwhile partner held out for some time.

But eventually he sold out to TML. Resistance was futile.

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