by Gill Moodie (@grubstreetSA) “Declining circulation” is a term that haunts editors and publishers today and, while some in South Africa point to the fact that Amps readership figures remain stable, the reality is that, every time a new set of Audit Bureau of Circulations of SA (ABC) numbers come out, one sees diminishing sales.
Whereas Amps figures are difficult to understand – and some say are too generous in their allocations of readers per copy – ABC numbers 
are easier to grab hold of because they are broken into detailed spreadsheets. Every quarter – as the industry did this week when the figures for April-June 2014 came out – the media owners and journalists can see exactly how many copies a particular title sold, how many went to individual, business, and “travel & commercial” subscribers, how many were sold at 50% less than the cover price and how many sold to third-party bulkers.
When it comes to circulation numbers, there are very few places to hide.
As simple as it may seem, circulation is a complex business involving hitting the right note editorially; managing supply and distribution – both to subscribers and to the streets and retailers – and doing effective marketing. It involves managing the mismatch with ever rising costs with diminishing revenue because newspapers today are under both circulation and advertising pressure.
Therefore, pinpointing what is causing a rise or fall in circulation is very tricky.
However, if you take a long view, trends do emerge and in South Africa over the past year, we can discern:
1. From the perspective of publishers of daily and weekend newspapers, Times Media Group (TMG) appears to be faring the best: The Sowetan, the Daily Dispatch, The Herald and The Times are all holding steady or growing slightly while the Dispatch has 
shown the biggest rise in daily-newspaper circulation for both its daily and Saturday editions for two successive quarters. This company trend appears to be the product of a combination of canny new management (under new-ish owner Andrew Bonamour) and solid editors who are being allowed to invest in newsrooms far more than rival newspaper groups such as Independent Newspapers, Caxton and Media24.
Further, in the case of the Daily Dispatch and The Herald, there is close co-operation between editorial, distribution and marketing, editors Bongani Siqoko and Heather Robertson have told Journalism.co.za. Circulation for TMG’s flagship, the Sunday Times, is down over the past year but a large part of this is because of the stripping out of costly incentivised sales, e.g., bulking and PMIE (that goes to schools for free to aid literacy development). For the first time in a decade or more, the Sunday Times had no incentivised sales to its name in the most recent ABCs. Copy sales (as opposed to total circulation) were at 237 721 compared with 248 721 year-on-year.
2. There’s no doubt that the Afrikaans papers are struggling. Die Burger is less affected but both Media24’s Beeld and Rapport are losing sales. In the most recent ABCs, Rapport was at 175 552 compared with 192 328 year-on-year while Beeld was at 59 544 compared with 64 073 a year ago. Die Burger’s decrease is less dramatic but it is still down: 57 423 compared with 59 704 a year ago. This is despite some very good editors – Beeld’s Adriaan Basson and Rapport’s Waldimar Pelser are among the smartest of their generation – so could this be a combination of Afrikaans readers moving to English-language news and shrunken newsrooms (far smaller than at TMG, for instance)?
Then there is the fact that distribution at Media24 is quite far removed from the newspapers because it is done by a completely different (though still owned by Media24) company, On the Dot. Certainly, few of the Media24’s titles have managed to come back from the massive disruption to distribution and subscriptions in 2010 when a new enterprise resource system was put in place – something that Koos Bekker, CEO of Media24 parent company Naspers, described in 2011 as a “bloody mess”. The recent ABC figures tell us that Afrikaans daily papers have declined by 7.1% annually since 2010 (compared with 3.9% annually for the English dailies) while Afrikaans weekend papers have dropped 8.9% annually over the same period (5.6% for the English titles).
3. Vernacular titles – mostly on the back of Independent Newspapers’ jewel in the crown, the isiZulu-language Isolezwe – have bucked the [downward circulation] trend consistently. Isolezwe, which is a seven-day-a-week publication, has really hit 
the spot in every way and even seen off rivals such as Ilanga (owned by the IFP’s investment arm and which is in a significant circulation slump), UmAfrika (owned by the Catholic Church and stopped as a commercial product in 2013) and an isZulu edition of the Sunday Times (closed in 2013). The circulation of daily vernacular newspapers has risen annually by 1.4% since 2010, according to the latest ABCs, while the weekend papers have increased by 11.5%.
4. In terms of interesting individual titles, Media24’s City Press and Sunday Sun appear to stabilising or turning around after a couple of years of decline while the Daily Sun is still in the wars: at 274 165 in the second quarter of 2014 compared with 287 222 year-on-year.
5. The majority of Independent Newspapers’ English-language titles are in sustained decline – as is Caxton’s flagship, The Citizen, which just cannot get out of its funk even after making bold moves such as a cover price and ad-rate drop in 2010 and a significant redesign last year.
6. This general circulation decline means that media inflation for the print sector – which tracks the cost of reaching people through advertising in the media – is on the increase, making newspapers less attractive to advertisers, which are themselves squeezed in our tight economy.
Mike Leahy’s Ibis Media Data Services numbers tell us that DStv – which sells a combination of ad packages and spots – has become much more competitive recently because it reduced the price of packages in 2012 and gave advertisers more spots in the packages. The latest Ibis figures – for the first quarter of 2014 – put print-sector inflation at 4.29% compared with overall media inflation of 7.4% (for print, radio, TV, online, out-of-home and cinema). However, Gordon Patterson, who compiled the most recent ABC presentation, noted the “devil is in the detail… (because) the compound effect of circulation declines has resulted in Print Media Inflation Watch reaching 9.72%”.
7. While PMIE free newspapers to schools is largely a thing of the past – it was considered to be of little value to advertisers because it didn’t reach the right target markets – Patterson also noted in the most recent presentation that there was an increase in both newspapers and magazines of sales below 50% of cover price.
“There is little doubt that our economy still faces significant economic challenges during 2014,” he said in his comments in the second-quarter presentation. “The declining GDP growth, coupled to the growing labour issues, means that both publishers and purchasers will be cash strapped for the foreseeable future.
“There is a real need for leadership in print, and a renewed effort by newspapers, in particular, to invest in their own future, and to compete with new technologies.
“Improved content, strong marketing efforts and perhaps the adoption of several of the known digital marketing strategies, could turn the trend around. Doing nothing, however, rarely produces a change in fortune!”
He also warned: “One thing is clear from my perspective, and it’s that the solution won’t be found in further distribution at less than 50% of the cover price. Marketers and decision makers should take account of such tactics in their negotiations.
“… the decline in press circulation started well before new technologies established themselves, so the issue is not competition, it’s relevance…and that can be addressed if we invest in understanding the problem.”
South Africa’s leading media commentator, Gill Moodie (@grubstreetSA) offers intelligence on media, old and new. Reprinted from her site Grubstreet. This piece was published first on Journalism.co.za, the website of Wits University’s journalism school.
— MarkLives’ round-up of top ad and media industry news and opinion in your mailbox every three work days. Sign up here!