New research suggests that the South African newspaper market will continue to derive most of its revenues from the print format, despite predictions by global commentators about its imminent demise.
This is according to the Fourth South African edition of PwC’s South African entertainment and media outlook: 2013 – 2017, published on Thursday (19 September).
The financial services firm believes that the shift to digital advertising for the newspaper industry will not be as pronounced as in other markets, but digital will nevertheless double its share of total newspaper revenues from 2% to 5% in 2017.
PwC says that, while newspaper readers will begin to switch to reading copy in digital formats, digital’s share of circulation revenues will reach only 7% in 2017.
Urbanisation in South Africa continues to rise by over a million people per year and this, PwC argues, will boost the newspaper market.
Newspaper advertising revenue will grow from R7.5 billion in 2012 to an estimated R10.1 billion in 2017, a compound annual growth rate (CAGR) of 6.2%.
Circulation revenues, PWC says, are forecast to grow modestly, at a CAGR of 2.2%, but the whole market will be boosted by spend on advertising, as newspapers attract new untapped audiences.
Readership of daily newspapers remains constant with 31% of the population aged above 15 reading a daily newspaper in December 2012.
Print circulation revenues are forecast to recover from a 2% drop in 2011 to reach R2.7 billion in 2017.
Total circulation spending is expected to recover fully from the effects of the recession in 2009 reaching R2.7 billion in 2014, which is approximately the same level of revenue achieved in 2008, PWC said.
Digital circulation revenues are forecast to grow from R13 million to reach R215 million in 2017. “But contrary to markets with higher broadband penetration, the majority of South Africa’s newspaper readers still prefer print over digital news content,” the financial services firm said.
Print advertising revenues in South Africa will reach approximately R9.6 billion in 2017, while digital advertising is forecast to grow by a 27% CAGR to reach R506 million in 2017.