The South African consumer magazine market will be worth approximately R10.7 billion in 2017, up from R7.7 billion in 2012, having increased by an average compound annual rate of 6.9%.
This is according to the Fourth South African edition of PwC’s South African entertainment and media outlook: 2013 – 2017.
PwC says that digital magazine revenues are beginning to gain traction and will grow substantially as fixed and mobile broadband penetration increases along with tablet ownership.
Digital circulation revenues will increase more than tenfold from R34 million in 2012 to R370 million in 2017, the financial services firm says.
Overall, the shift away from advertising spend is expected to slow significantly. Advertising spend accounted for 40% of total consumer magazine spending in 2012, down from 52% in 2008.
By 2017, it will only fall to 38%, as advertising spend remains strong. Advertising spend will increase from R3.1 billion in 2012 to an estimated R4.2 billion in 2017, increasing at an average compound annual rate of 6.1% over the forecast period.
The report finds that digital advertising spend will increase at a slightly slower rate from R31 million in 2012 to approximately R236 million in 2017.
While South African publishers have been experimenting with new titles and closing unsuccessful titles, merger and acquisition activity remains stagnant despite significant growth in the market, PwC says.
And while overall circulation in South Africa is increasing, readership is decreasing. In 2011, 50.5% of South Africans read at least one magazine in the year, but in 2012 this fell to 46.9%.
Readership of individual magazines also fell, with fewer magazines reaching the threshold of 1 million readers per issue than in 2011.
This is due to the changing demographics in South Africa, with a growing middle class resulting in an increase in magazine purchases by young professional couples or singletons.
With more magazines being read in smaller family units, overall readership has declined at the same time as circulation has increased, PwC said.
The report notes that growth in the middle class in SA has also led to increased advertising revenues, as brands seek to target households with growing disposable incomes.
Digital advertising in particular will grow by a forecast CAGR of 50.4% as advertisers look to target more affluent households.