Growth of almost a quarter in paying online news readers has not been enough to save Media24 from its continued buckling under the pressure of trying to sustain one of SA’s largest news publishers in the first half of its financial year.
It has been a trying year for the Naspers-owned media group as it works to manage the costs that are wiping out its profit.
As part of the effort, the group earlier this year announced a strategic shift that put 400 jobs at risk as it sought to close the print editions of five newspapers, transitioning three of them into digital-only brands.
Media24 is also hiving off its media logistics business, On the Dot, and its community newspaper portfolio to Novus, subject to regulatory approvals. In October, the Competition Commission approved Novus’ bid to acquire those assets.
This comes as the group says it is working to contain costs as part of an effort to offset “growth headwinds,” which entails “continued investment in premium content to enhance reader engagement.”
Media24’s two main units, News24 and Netwerk24, saw a huge 23% rise in paywall subscribers to 217,580. The company has not disclosed how many paying customers it would need to be sustainable. Even then, revenue for the six months ended September 2024 fell 6% in local currency, from $82m to $81m, while maintaining its adjusted loss before interest and tax position at $1m.
Paywalls are seen as one of the ways in which media outlets can ensure their financial viability over the long term. In essence, some or all of a news platform’s content is only made available to paying customers. However, paywalls are not a winning strategy for all publishers. Many have faced challenges in implementing paywalls due to the availability of free news content.
In the case of Media24 and many others in SA’s media landscape, the cost base appears to be unsustainable as little of the money earned is retained as profit.
In September, Daily Maverick became the latest casualty when it announced it would begin a cost-reduction exercise, aiming to cut about 15% of operating costs.
Restructuring would affect the entire organisation “both through retrenchment and the absorption of responsibilities and duties”.
Some freelancers and contractors would be affected, but in terms of retrenchment about 5% of permanent employees were expected to be affected by the move. The company did not disclose how many people it has on staff.
In the same month, Independent Media — owners of publications such as The Star, Cape Times and Isolezwe — announced retrenchments, citing substantially the same reasons as Daily Maverick about an unsustainable media industry.
According to Google Analytics, Media24’s platform saw 9.7-million average daily unique page views in the period. The business also saw Ishmet Davidson step down as CEO at the start of September, with Raj Lalbahadur taking the reins as interim chief.
Print editions on the chopping block at Media24 include Beeld, Rapport, City Press, Daily Sun and Soccer Laduma, as well as the digital editions of Volksblad and Die Burger Oos-Kaap and the digital hub SNL24. Those transitioning to digital-only publications are Rapport, City Press and Daily Sun. As digital brands, these will reside on the group’s Netwerk24 and News24 platforms.
The company also appears to be shutting down two of SA’s best-known magazine publications, Drum and True Love.
Caxton had previously approached the Competition Commission to oppose the closure of the titles and the sale of the media logistics business.
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