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Readers falling into the Web

Pure digital media platforms are starting to prove their worth as stand-alone businesses, but they need huge scale to be profitable.
According to recent estimates, online audiences in SA have caught up with print at around 10m active readers. However, digital advertising makes up only 3% of all SA marketing spend, compared to print's 30% share.

Jannie Momberg, editor in chief at, says it is now possible to operate a profitable digital news service without relying on a larger print organisation for content. "We are 100% digital publishers, a separate business within Media24," he says. "We are completely digitally focused and the fact that people are buying fewer magazines and newspapers doesn't matter in my life. We have nothing to do with those businesses."

The portfolio encompasses 12 distinct properties which include news, finance, property, food, women, motoring and entertainment. Together they record 5,3m unique browsers and 122m page views in SA monthly. Worldwide attracts 7,8m unique browsers and 147m page views.

Momberg says that unlike other publishers in the SA market, has no immediate intentions to erect a pay wall. "Our business is entirely funded by advertising and it is profitable," he says. "We are not costing the shareholder any money. We've only recently shown profitability, however, as we've invested heavily in the business."

Momberg says that advertising-only models work only for publishers with very large audiences. "A lot of medium-sized and smaller publishers are struggling because they don't have the audiences."

The impact of paywalls on traffic

What remains to be seen is the effect of moves by both BDFM Publishers (which publishes Business Day and the Financial Mail) and Media24's Afrikaans newspapers to launch pay walls for their digital properties. After receiving a certain number of free articles, readers are redirected to a subscription page where they must pay a fee to read unlimited content on the sites.

The Sunday Times, which is published by BDFM holding company Times Media Group, was the first major publication to launch its pay wall last year. It charges for content upfront and doesn't give away any free content.

Independent Online (IOL), the digital division of Independent Newspapers SA, which is in the process of being bought by a consortium led by businessman Iqbal Survé, records an average 2,2m unique browsers and 21,7m page views across the various IOL products.

Editor Alastair Otter says he is happy with the site's performance so far. "We are fairly consistent in the market we operate in," he says. "Google is a significant driver of traffic for all our sites, with a growing (but still small) portion coming from Facebook and Twitter

"Some of the traffic is from regular readers who go directly to the site but the bulk of traffic comes through search engines such as Google News and Yahoo," he says.

Gaining traction

Times Media Live general manager Derek Abdinor says the various digital properties within the Times Media Group's stable are gaining traction. "Our properties have held a leading position in the industry for nearly two years now," he says. "They would have grown even faster were it not for restrictions we have imposed on free content, for instance not publishing Sunday Times articles online.

"Our revenue from advertising has nearly doubled, year on year, and we've enhanced our reputation as an effective medium."

Abdinor says Times Media Live is a profitable network and the growth forecast is good. But "no-one should be satisfied in this industry until we are somehow able to replicate the sustained success of print in the years to come", he adds.

BDFM digital general manager Bronwen Auret says readers of the group's content are shifting online.

"It's a known fact that print has been in decline around the world since 2005," she says. "Print is feeling the effects of audiences moving to digital options."

She says the Business Day Live website now has 500,000 unique users a month, up from 200,000 since it was relaunched in August last year. In its All Media & Product Survey, the SA Advertising Research Foundation reports that 59,000 people read Business Day in print during 2012, a decline of 4,8% from the previous year.

"Though audiences may be shifting, I don't think digital advertising is going to make up for the loss of print advertising," Auret says.

Source: Financial Mail, via I-Net Bridge

SOURCE is a South African government news service, published by the Government Communication and Information System (GCIS). (formerly BuaNews) was established to provide quick and easy access to articles and feature stories aimed at keeping the public informed about the implementation of government mandates.
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