Broadcast Media Africa has learnt that Naspers-owned media group Media24 – the parent of the country’s largest publication, News24 – has told South Africa’s Competition Commission that Google is abusing its “dominance” and threatening the viability of the Fourth Estate in South Africa.
Media24 CEO Ishmet Davidson recently told the Competition Commission that Google is taking advertising revenue out of South Africa, making it increasingly difficult for local publications to survive. He said even News24, despite its size, is loss-making – and he pointed the finger at Google and rival Meta Platforms, the owner of Facebook, for the dire situation facing local publishers.
Davidson said News24 was “forced” in 2020 to implement a paywall around much of its content. Still, even though more than 100,000 paying subscribers have signed up, the revenue from subscriptions “has not nearly been sufficient to offset the decline in advertising revenue”.
Despite the cost interventions, 100,000 subscribers and 20 million monthly users, News24 needs to be more reputable.
“To survive, we have been forced to manage our costs as tightly as possible, with zero cost growth over the past seven years. Despite the cost interventions, 100,000 subscribers and 20 million monthly users, News24 is unprofitable,” he told the commission’s media and digital platforms market inquiry.
“This indicates that the business model is unsustainable and, coupled with our dying print business, is an extinction crisis for media in South Africa. The Fourth Estate is on its knees. Yes, one or two media companies may survive, but a democracy thrives on a plurality of voices.”
And Google is at least partly to blame for this crisis, Davidson alleged in his oral submission, citing PwC and IAB research that suggested the media’s share of the digital advertising market declined from 8% in 2015 to just 3% in 2022. While Google and Meta have come to “dominate” South Africa’s digital advertising market, publishers have been left with “crumbs”.
