"Trends of ownership and control of media in South Africa"

Introduction

In the financial year 2008/9, the Media Development and Diversity Agency (MDDA) an Agency established by the MDDA Act No. 14 of 2002 in partnership with the major print and broadcast media industry to create, support, promote and encourage an enabling environment for media development and diversity that is conducive to public discourse and which reflects the needs and aspirations of all South Africans, commissioned Z-Coms to conduct research on the trends in ownership and control of media in South Africa.

This is intended to assist the Agency in its pursuit of the mandate enshrined in Section 3 (b) (i) of the MDDA Act which requires that the MDDA in giving meaning and effect to Section 16 (1) of the Constitution Act No. 108 of 1996, encourages the ownership and control and access to media by historically disadvantaged communities as well as by the historically diminished indigenous language and cultural groups.

The main objectives of the research were inter alia to take stock of the number of print and broadcast media in the country on a national, provincial and district municipality basis and to assess the extent to which the previously disadvantaged communities are taking up ownership and control.

The first part of the report includes a brief history of the South African media industry and an overview of the broadcasting regulatory environment, including the background to the formation of the Independent Communications Authority of South Africa (ICASA). The reports identify major players in the media landscape in South Africa as; Avusa, Caxton / CTP, Naspers (Media24), the Independent Newspapers Group, Kagiso Media, Primedia and the South African Broadcasting Corporation (SABC).   Ownership structures and media offerings are outlined in detail in the report.

It is worth noting that the report serves as a baseline, which will assist the industry and interested parties in researching what changes take place in the future. The report was completed in January 2009 and given the reality of the dynamic nature of the media industry, we all know that there have been some changes since the finalization of the report. The report is available on the MDDA website, www.mdda.org.za and there is also an online database which captures the information. Some of the recent changes have been captured in the database. The Agency also invites media and broadcasting industry to send new information online for the purpose of keeping the database up-to-date. All the updates received from stakeholder will be captured by the database manager who will update the MDDA database on an ongoing basis.

An Overview

In South Africa, the Constitution Act of 1996 protects and provides for the freedom of the media and access to information. This is further supported by the legislative framework giving effect to the constitution, including the MDDA Act of 2002, ICASA Act of 2000, Electronic Communications Act of 2005, Broadcasting Act of 1999, Access to Information Act of 2000, etc.

The media and broadcasting industry is relatively open and reflects the country's diversity in respect of languages (as all eleven official languages are represented) and content in general.  However, English is the most commonly used language, more so in print media and television. 

For the purpose of this report, the South African media industry is categorised into three sub-sectors:

(1)               Broadcast media consisting of Radio and Television;

(2)               Print Media consisting of Newspapers and Magazines; and

(3)               New Media consisting of online media (Internet) and mobile media.

Radio is the most accessible medium of communication, with 94.1% of the adult population having access to radio.  According to AMPs 2008 Television has a population reach of over 83.8%[1][1]. Whereas, according to the Audit Bureau of Circulation 2008 (ABC), newspapers and magazines have a population reach of 48% and 40% respectively. 

Of interest, is the fact that South Africa's mobile penetration exceeds that of PC (computer) and internet penetration, and mobile internet penetration is still in its growth phase.  South Africa is Africa's highest mobile website page impressions as measured by AdMob.[2][2]

(1) Broadcast Media

Radio

The report concludes that the SABC dominates the radio industry, accounting for 41.6% of the total radio audience in the country. SABC has 18 public radio stations, divided into 15 public broadcasting service (PBS) stations and 3 public commercial services (PCS) stations.

There are 13 private commercial radio stations which are regional or provincial stations; they have 16.5%[3][3] of the total radio adult audience.  ICASA has recently licensed 3 other commercial radio stations in the so- called "secondary markets". 

There is also the Worldspace which is a subscription satellite radio service offering a limited number of encrypted channels. Recently, Worldspace together with On Digital Media, Telkom Media, etv and Walking on Waters applied for an individual electronic communications network services to self-provide broadcasting services to ICASA.

According to ICASA, there are 126 community radio stations, of which 87 stations are on-air.  Community radio accounts for 4.6% of total radio audience[4][4], according to AMPS data. 

Television

According to AMPS 2008, there are 11.1 million TV households in South Africa. 

The SABC has 3 public terrestrial television channels (SABC1, 2 and 3) with total viewership accounting for 69.3% of the total television audience. 

E.tv is the only privately owned free-to-air commercial terrestrial television station with an audience of 18.1 million, representing 22.3% of the viewing audience. 

MultiChoice owns M-Net (Pty) Ltd which broadcasts the M-Net premium channel; the Community Services Network (CSN) which targets special interest communities; Sports and the digital satellite bouquet on DSTv. This has been the only pay TV and satellite broadcasting service in the country for 12 years until 2007. According to Multichoice in South Africa the current subscription for DSTv is around 1.610 million and M-Net is 128 000 in the first quarter of 2009. In 2007, ICASA issued 5 new licences for satellite broadcasting.  These new Broadcast Service Licensees are: Multichoice, On-digital Media, Telkom Media, Walking on water and eSat.  None of the newly licensed satellite operators have launched yet. The exception of cause is Multichoice which has been broadcasting for the past 12 years as DSTv.   The newly licensed e-Sat decided to produce a 24 hour news channel that is now carried on the DSTv platform. 

At the time of finalizing the report, there were 4 licensed community television stations in South Africa; Soweto Community TV in Soweto/Johannesburg (Gauteng); Bay Television station in Empangeni / Richardsbay (KZN); Cape Town Community TV in Cape Town (Western Cape) and the Trinity Broadcasting Network (TBN) (Eastern Cape). Bay TV is not on-air yet and subsequently Tshwane TV in Tshwane (Gauteng) was licensed (February 2009) and is not on-air yet.  Two of these community TV services (TBN and Soweto TV) are also available on DSTv in addition to the terrestrial coverage.

Ownership and Control in Broadcast Media

This research found that historically disadvantaged individuals (HDIs) are well represented in ownership and control of the broadcast media. 

The 13 private commercial radio stations have HDI ownership of 58% on average.  (see table 9 of the report). On the television front, private commercial television station's HDI ownership sits on an average of 64.4% per television station. (See table 20 on the report) 

The changes in the broadcasting industry, reflects the success of the work of the then Independent Broadcasting Authority (IBA) (established in terms of the Independent Broadcasting  Authority Act of 1993) and ICASA's regulatory and licensing interventions. One of the criteria to qualify for licensing enshrined in the IBA Act and now Electronic Communications Act is ownership by HDIs, limitations on foreign ownership to 20% and that broadcasting is effectively controlled by South Africans. 

(2) Print Media

Print media is by far the largest sub-sector of media sector in South Africa (in terms of the number of titles and ownership). 

Newspapers

Newspapers in South Africa are printed in English, Afrikaans and some in the indigenous languages.  About 940 million newspapers per annum circulate in South Africa, this includes mainstream (or commercial), local, small commercial and community newspapers. 

AMPS 2008 indicate that the national newspaper readership is 15.2 million[5][5].  Gauteng audience reach accounts for 69% of this figure, followed by Northern Cape at 64%.  The province with most newspaper readers is Gauteng (4.4 million readers) followed by KwaZulu-Natal (2.6 million readers).  

The economically strongest provinces such as Gauteng, Western Cape and KwaZulu-Natal, receive about 71.9% of the newspaper titles circulating in South Africa, accounting for 69% of the total newspaper readership - a total of 6.6 million readers. 

In terms of newspapers titles available; Gauteng Province accounts for 26.6%, Western Cape Province 19.8% and KwaZulu-Natal 25.5%.  Northern Cape and North West Provinces receive the lowest number of newspaper circulation - below 10%.

Magazines

At the time this report was written at least 504 magazine titles were identified. 

AMPS 2008, reflects magazine readership at 12.6 million[6][6]. 

By province, the majority of readers are in the Western Cape (60%) followed by Gauteng province (55%) and then the North West at 38%.  However, in absolute terms, the highest magazine readership is in Gauteng at 3.5 million readers followed by KZN at 1.9 million readers.

Ownership and Control of Print Media

South African print media is concentrated among 4 major media players;

·                    Naspers through its subsidiary Media24;

·                    Caxton;

·                    Avusa and

·                    the foreign owned Independent Newspapers.

Media 24 is dominant in terms of circulation of newspapers according to the ABC. Regarding ownership, major print media players such as Media24 and Avusa have some degree of HDI ownership.  Avusa has at least a 25.5% HDI shareholding as a result of Mvelaphanda Holdings acquiring part of Allan Gray's stake in the company and Media 24 has 15%.

This research shows that the print media landscape in the post 1994 South Africa has not transformed much in terms of ownership and control. However, credit should be given to the sector in terms of operational control by HDI management and editors.  The majority of print media in South Africa is still owned / dominated by a few companies and individuals in spite of various interventions by the state through promotion of transformation processes and BEE. This research did not put emphasis on the editorial control of the media to determine how many media houses are managed by HDIs as this was not part of the objectives.

It is worth noting that the media and broadcasting in South Africa is guided by the noble principles of editorial independence.  The question of the degree of impact of ownership and control to editorial content remains a debatable matter in the media industry. But the legislative framework that exist promotes diversity in all spheres, from ownership, control, management, newsroom, sources of information and therefore diversity of views and opinions in order to enhance our democracy.

(3) New Media

New media encompasses the emergence of digital, computerised, or networked information and communication technologies and includes internet and mobile based media. 

This report indicates that new media is dominated by the major media companies such as Naspers/Media24 with their 24.com website/mobisite brand and Avusa with its various news (e.g. the times website/mobisite) and service (career junction website/mobisite) offerings.  These players that dominate the print media have repurposed their content. 

This research found that most print media (mainstream national newspapers and magazines in particular) have significant presence in the new media platform (online news papers and magazines).  According to AC Nielsen, the most popular news sites[7][7] on the internet are news24.com, IOL news, News24 South Africa and The Times.[8][8] 

Telecommunications companies are entering the content provision space with Telkom and Vodacom each having a web presence apart from the fact that they own and provide the technology infrastructure required to access the Internet.

In terms of media diversity and access by disadvantaged communities, there is a long way to go towards making digital content accessible to the rural and township environments. 

Conclusion

In print media space, there is a big challenge of affordability and sustainability by the new media entrants. The high cost of printing machines prohibits smaller media owners from growing into some significant operation.

Transformation of ownership in the media sector requires more focus. It is not enough to focus on employment equity thus ignoring shareholding transformation. Media assets are therefore still owned largely by the four major media companies (Naspers, Caxton, Independent News Media and Avusa) whose HDI ownership is below 26%. For any meaningful transformation to take place, the MDDA needs to be capacitated so as to come up with viable funding plan. This will help new print media companies to be independent of the big media operators.

Broadcast media has made significant strides in transforming in line with the national BEE strategy, regulatory and the legislative framework. The advent of community broadcasting also added to the objectives of diversifying the media landscape. As a result, in addition to the public broadcasting services and the private commercial broadcasting services available in the District Municipalities, they also have access to their communities own means of communication, in the form of community radio. Community radio services are owned and controlled by the communities they are serving as per their license as issued by the Authority, ICASA.

For example in the 52 District Municipalities, community radio is available in all 52 District Municipalities, community newspapers are available in all 52 District Municipalities. However community magazines are the less developed and the MDDA is focusing on ensuring that there is a wide choice of access to a range of diverse media for all citizens. The fact that there is a community newspaper in all District Municipality does not mean that all local municipalities have a community newspaper. Some local municipalities do not have their own community newspapers, even though they may have access to some local newspapers owned by either Media 24 or Caxton, etc and thus most of their local news is not covered by the District Municipality newspapers.

This report therefore found that a lot of changes have taken place in South Africa regarding the ownership and control of media. Having said so, it also means that there is a lot of challenges and a lot more work needs to still happen to transform the ownership and control of media in South Africa, in particular print media.

The task imposed on such bodies as the MDDA is huge and working together with the industry and the South African citizenry, we will build an environment where a diverse, vibrant and creative media flourishes and reflects the needs of all South Africans.

Details of the report are available on the MDDA website; this includes the database with primary research and the graphical picture of the media landscape in South Africa.

Statement issued by the Lumko Mtimde, Chief Executive Officer of the MDDA, July 30 2009

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[1][1] Amps 2008

[2][2] http://www.bizcommunity.com/Article/196/78/29860.html titled AdMob on realising the value in mobisites

[3][3] AMPS 2008

[4][4] Please note that not all community radio stations are included in AMPS 2008 data. Only 34 community radio stations out of about 86 stations which are on-air are included in AMPS 2008 data.

[5][5] AMPS 2008

[6][6] AMPS 2008

[7][7] Top five online news sites, as of last quarter of 2008 according to AC Nielsen.

[8][8] Nielsen //Netrating