Death of the traditional newspaper: A strategic assessment
Die dood van die tradisionele koerant: 'n Strategiese assessering

Ronnie Lotriet
2018 Tydskrif vir Geesteswetenskappe  
Death of the traditional newspaper: A strategic assessment The newspaper industry in South Africa has been placed under severe pressure with the digital era in recent years. Circulation figures have dropped and profits have decreased. The influence of the Internet and news online could have a significant impact on the manner in which newspaper publishers generate revenue and profits in the future. If the current decrease in circulation continues, there could be as little as 750 000 newspapers
more » ... 50 000 newspapers in circulation in South Africa by the year 2020. The latest figures still confirm the decline in all classes of newspapers: daily newspapers, pdf replicas, weekly newspapers, weekend and free newspapers. The study shows that one-fifth of SA has partially or completely migrated to online news, which can be the dominant factor for the decrease in circulation rates. The dilemma manifests itself in South Africa's traditional largest daily newspapers in an increasingly thinning newspaper versus higher than inflationary price increases. The latter culminates in price sensitive readers who respond by purchasing their favourite daily newspaper on selective days only. The Internet of Things in South Africa will grow exponentially as data costs decrease and Internet access improves so that online media usage will grow accordingly. The growing phenomenon of digital media is changing the market landscape significantly and could have dire consequences for the newspaper publisher who does not manage any migration strategically. Is this a case of the famous newspaper cliché: "stop the press!" -especially for Afrikaans daily newspapers? The Internet undermines newspapers' advertising revenues and news became a commodity that could dramatically change the traditional business model. From the contrasting market trends pointed out in the article, it is clear that this complex news ecosystem requires interaction with the readers to pinpoint future consumer journeys. A major challenge is advertisers who now reach larger audiences with digital and broadcast media at a much lower price than those of newspaper advertising. The worrying aspect for the industry is that a loss of advertising revenue in printed newspapers has not been supplemented by an increase in revenue for digital advertising on newspaper websites or online newspapers. Although most newspapers in the world already have an online version, the majority struggle to run it profitably. The news industry is therefore still looking for a sustainable business model. Market structures are constantly changing due to market dynamics. The article indicates that in a fully competitive market, the industry's demand and supply determine the prevailing market price, and with the concentrated media market in South Africa, several strategies can be followed to win market share. In essence, the South African media industry is oligopolistic in nature. The growing presence of complementary and substitute products in the media industry for printed newspapers has caused significant changes with the ecosystems in terms of the quantity demanded versus changes in demand. Newspaper publishers in the new fragmented media market need to make strategic decisions for sustained growth and improved operational efficiency. In response to the challenges of newspapers, several strategic considerations are proposed -a series of consolidations are already happening in the industry with larger media houses that aggressively acquired smaller competitors. Mergers and acquisitions can provide traction to newspapers and rationalize the number of major players in the industry. The above implies changing business models that are adaptable for strategic considerations to increase subscription and advertising income levels and revenue from other avenues. The strategic options aim to realize greater scale, increasing circulation and income stability.
doi:10.17159/2224-7912/2018/v58n4-1a7 fatcat:piroig2cl5fbjfr6p5bc6rzxxy