Grubstreet: 2014 — the year of epic media battles and empire building
While the industry watches for a pattern to emerge in what kind of media owner Dr Iqbal Surve will be — and what he will do with Independent Newspapers after a fiery start that saw Cape Times editor Alide Dasnois shafted in controversial circumstances — we have a powerful new player in the market last week: Johann Rupert’s Remgro that is part of a consortium taking over ElementOne in a R2.3bn deal.
ElementOne is an unlisted investment holding company that holds a 39.38% stake in Caxton, the owner of printing presses; newspapers, such as The Citizen; and a swathe of community titles. Caxton, which is owned and run by Terry Moolman, also has a 20.62% stake in ElementOne plus a stake in Times Media Group (TMG).
ElementOne has a complex shareholding structure but that doesn’t obscure the significance of the billionaire Rupert’s move into media. (Remgro also owns a stake in Sabido, the parent firm of e.tv.)
While Caxton has been careful to point out that Moolman is still very much at the helm, you cannot underestimate the influence of his new business partner. And Moolman and Rupert are united in an intense dislike for Media24 — the owners of the Afrikaans press, Daily Sun, City Press and a large magazine house.
I’ve heard tell that Moolman never got over the fact that Media24 beat him to snapping up The Witness newspaper but the companies compete fiercely on many fronts: in printing, in community titles (in KwaZulu-Natal) and in magazines — and now we have Caxton leading the charge at the Competition Commission against Media24 in a predatory-pricing investigation and with Moneyweb pitted against News24 in the courts over content aggregation tha tCaxton claims is copyright infringement, plagiarism and unfair competition.
The Caxton deal may be small potatoes for Remgro but Alec Hogg reminded us all last year that Rupert is “still smarting” from a bust up with Koos Bekker, the CEO of Naspers, owner of Media24, in the early days of pay-TV so I think we can expect the battle between Caxton and Media24 to intensify.
Here, below, are the other big battles, moves and plays to watch out for this year:
On the subject of Caxton v Media24, I think we can expect to see these companies — and TMG, the owners of the Sunday Times, Business Day and the Sowetan — to come under more pressure to transform in both ownership and editors. The Movement for Transformation of the Media in South Africa that popped up out of nowhere amid the Dasnois saga has already said it will target TMG on this score.
2. Independent Newspapers: tiffs, tantrums and greater competition
I’m sure more tiffs and tantrums — but also greater competition — are coming from Independent Newspapers’ quarter. Surve has made few friends in the industry, making wild allegations about the Mail & Guardian, Business Day and TMG but there are also signs that he plans to jump into territory long dominated by the other players. He has said he wants to go aggressively into digital — where Media24 reigns — and open more vernacular titles, and the Eastern Cape looks like the first play.
TMG dominates with the Daily Dispatch and The Herald in this region. Personally, I’d love to see someone invest properly in an Eastern Cape vernacular tabloid and test the research done by other media houses that says there is no market for this is this marginalised region.
I think we can also expect to see the exit of more Indy editors this year and a change of guard in the management of the company.
3. TMG explorations
TMG is certainly exploring TV and radio more confidently (with Business Day TV as its base). It has bought significant stakes in a Ghanaian TV and radio operation and a Mpumalaanga radio station but cross-ownership restrictions will make a more concerted radio play difficult in South Africa.
TMG’s attempt to expand its magazine division with a deal with RamsayMedia (torpedoed by 30% Ramsay-owner Caxton) may not yet be over. It’s quite possible that Caxton may make a side deal with TMG on Ramsay, although Grubstreet understands that Moolman and TMG CEO and owner Andrew Bonamour are not hitting it off.
4. Kagiso moving into TV
On the subject of TV, Kagiso — the owner of radio stations such as East Coast and Jacaranda — is moving into this space with Glow TV on the new OpenView HD satellite bouquet owned by Platco Digital, a sister company ofe.tv.
Kagiso is a very nimble, forward-thinking company, so watch it carefully. This is part of a much bigger play, as not only does Kagiso have content-producing capability in Urban Brew, it is also bidding for a pay-TV licence.
5. eNCA to shift from DStv to OpenView?
Meanwhile, there is speculation that eNCA (sister operation of e.tv) will move from Naspers’ DStv to OpenView, while SABC GCEO Lulama Mokhobo made it clear at the launch of SABC’s 24-hour news channel last year that the plan is for it to move to digital terrestrial television after it finally arrives in South Africa. The international deadline for the final switch over from analogue to digital is June 2015.
6. Media24’s push into e-commerce
It is well worth watching Media24’s push into e-commerce starting with Spree.com — which is part of a bigger expansion globally into this sector at Naspers level — while apps such as My Edit are clearly part of a larger exploration into delivering newspaper and magazine content digitally.
Also at Naspers level, it is reportedly in talks with both Telkom and Vodacom about mobile TV, while Naspers’ DStv Explora decoder means that subscribers are already watching “Catch Up” on their iPads. Way cool!
7. Keep an eye on Given Mkhari
In the radio space, Given Mkhari is the man to watch: his Power FM is certainly all over social networks and I’m sure the audience figures will be good once they are in. Mkhari, whose consortium also owns the successful Capricorn FM station in Polokwane, is also bidding for new FM licences in the Eastern Cape and the Free State.
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