Digital newspaper circulation spending in SA is expected to grow by a compound annual growth rate of 75.2% by 2017.
This was revealed in the PricewaterhouseCoopers (PwC) Entertainment and Media Outlook, which includes an estimation of the digital revenue of all paid-for newspaper Web sites in the country.
According to entertainment and media industries leader for PwC Southern Africa, Vicky Myburgh, this percentage translates into revenue of R215 million by 2017, compared to R13 million in 2012.
"We forecast the 2013 digital revenue to be R48 million, compared with R2.629 billion for print circulation revenue," says Myburgh.
The local forecast for paid-for online news content seems to be in line with the global trend.
The Reuters Institute for the Study of Journalism recently released the results of a study that looks at the attitudes of consumers towards different platforms and traditional news outlets. According to the study, there has been "a significant shift in public attitudes towards digital news, with more than twice as many people paying for digital news content than a year ago".
The institute surveyed a total of 11 000 people across nine countries about where they get their news and how they consume it. It was revealed that a growing number are reading or watching news on phones and tablets.
At the same time, the study revealed that while 50% of the global sample said they had bought a printed newspaper in the last week, only 5% said they had paid for digital news in the same time period.
"This is partly because the majority of online newspapers still do not charge for news, although that is changing rapidly with the erection of paywalls, combined subscriptions, and app-based purchases," says the institute.
Staying ahead
The ability to provide unique niche content will be the determining factor in the success of the paywall model, says Myburgh.
"As long as the content is quality customised to the specific needs of consumers, together with the correct price at which the content is sold, any media can be sold online," she says.
Owner of digital communications agency Retroviral, Mike Sharman, echoes this sentiment. "If you offer content that is valuable enough, you will survive by charging for it. If it is unavailable elsewhere and important to a range of customers, then said customers will pay for it."
Myburgh explains that because consumers have a need for continuously-updated information, the value proposition has to be pitched at the right price, to make the paywall model viable.
"It's a very interesting scenario. On the one hand, we are seeing news sites putting up paywalls, and on the other, when we look at traditional print newspapers, the circulation of free newspapers has risen by 7.4% annually. It all depends on the target audience."
Sharman notes that it still boils down to traditional business models conflicting with online social behaviour. "Because of the decline in print sales for some publications, it made sense for these titles to go online to reduce costs or to offer online content as a value-add to existing print content.
"The Internet is built on the principle of open source, knowledge-sharing. Paywalls are counter-revolutionary because they are implemented primarily by traditional publishing companies with traditional business models," he says.
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