Changes and challenges in media diversity

South Africa’s broadcast industry is doing well in terms of black ownership, but the same can’t be said for our newspapers, according to a study released last week by the Media Diversity and Development Agency (MDDA).

That’s not exactly what the newspaper bosses want to hear right now, with their focus fixed on the challenge of surviving the recession. Nor is there an easy solution of banks waiting in line to finance potential black buy-outs.

On the other hand, from an ownership diversity point of view, broadcasting still has some issues. Commercial radio scores 58% ownership by “historically disadvantaged individuals” thanks to conditions set out for licensees. But state-owned SABC commands 70% of TV audience share and 46% of radio (as figures in the MDDA study record).

Ownership is important because it provides potential power to dictate editorial content.

That’s why everyone agrees that a plurality of media owners (of varying colours and configurations) is fundamental to democracy.

While SABC is directed by the general interests of black South Africans as reflected in the democratic state, our citizens could benefit from diluting the significance of this ownership. One way to do this would be to expand the broadcast sector for non-state players and thereby provide more audience choice.

The same principle applies with double relevance to the newspaper companies. This media sector not only has a limited number of dominant players; its ownership is also very narrow in racial terms.

Of the four major newspaper companies, Caxton and Independent (foreign-owned) have no black shareholders at all. While Avusa has 26% and Media24 15%, this representation equates symbolically to a mere 6% of total newspaper circulation.

The imperative of improving these and other media ownership patterns is complex:

  • Although not covered in the MDDA study, gender and class dimensions of ownership are also important. Geographical locality of ownership is also significant, as an MDDA online database shows. So while ownership diversity involves the important issue of the colour, it is also wider than that.
  • Diversifying ownership can sometimes conflict with media sustainability — especially when the recession is pushing privately owned newspapers everywhere towards greater concentration of ownership (and towards cross-ownership between broadcast and print).

Looking at South African media, the following can be said:

  • First, workers, the unemployed and women are little represented in private ownership, except in part in e.tv and Primedia. While these demographic axes are prevalent in community radio ownership, that sector serves probably less than 10% of total radio audience share.
  • Second, across several sectors, one company is predominant: Media24. This 85% white-owned entity owns the biggest newspaper (Daily Sun), subscription broadcast (DStv and M-Net), and the biggest local website. However, the sectors of commercial free-to-air broadcasting form an important exception in which other players predominate.

What all this means is that while South Africans do have a degree of diversity of owners and ownership forms, the bigger point is that there’s still much room for improvement.

Right now, however, the big private newspaper companies are likely to want inter-consolidation amongst them, rather than unbundling ownerships to black (or other-defined) interests. For example, a single company owning all newspaper websites would be able to better negotiate revenue shares with Google, internet service providers and cellphone companies.

That scenario could exacerbate the problem of ownership concentration, although it would also be good for sustainability.

It is in this overall context that the MDDA itself represents a different approach to decreeing ownership diversity through law and regulation.

The agency was born in 2002 in a compromise between the mainstream media industry and the-then fairly new majority government. In effect, the deal was that newspaper ownership would not be tampered with, if it donated funds to the cause of expanding the sector as a whole.

The logic is that the problematic racial ownership character of newspaper companies diminishes in significance if it becomes a mere portion of a wider industry in which a majority of black (and other) owners operate independently of the big four. The same reckoning is relevant to diminishing the predominance of state-ownership within the broadcast mix.

The MDDA was designed just to create ownership diversity by growing new media outlets and owners, and especially in smaller markets in which language needs are poorly served by the mainstream. The low cost structures and profit margins of small media mean that such entities can make a business in these markets eschewed by the bigger companies.

The newspaper industry recently renewed its support to the MDDA for the next four years, but — citing the recession — it has also frozen contributions at current levels irrespective of inflation. Broadcasters and government contribute the bulk of MDDA’s budget.

Yet for the MDDA to make a real impact in extending ownership in print and broadcast, and thereby in enhancing the ownership spread across the media industry as a whole, the agency will need a lot more resources. That’s a debate that is yet to happen. But it’s also one that’s vital to the contribution of media to South Africa’s democracy.

Disclosure: the author is a member of the board of the MDDA.

RSS feed for this column: http://www.mg.co.za/rss/guy-berger

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