Consumer magazine publishing
150 | South African entertainment and media outlook: 2012-2016
Chapter 7
Consumer magazine
publishing
Sharon Horsten
Associate Director, PwC Southern Africa
The consumer magazine publishing market consists of
spending by advertisers in consumer print magazines
and online magazines, on magazine online websites,
on magazine mobile websites and in magazines
distributed to tablets and other mobile devices.
Consumer magazine publishing includes spending
by readers to purchase magazines via subscriptions
or at retail outlets as well as paid digital circulation
principally through downloads to tablets and
smartphones. Trade magazines are covered in the
chapter on business-to-business publishing.
PwC | 151
Consumer magazine publishing
Outlook
... at a glance
Consumer
magazine
publishing
total spending
(R millions)
2011
2016
4 365
5 653
2012-16
CAGR(%)
5.3
2012-16
CAGR (%)
2011
2016
2 400
3 400
7.2
12
56
36.1
Total advertising
2 412
3 456
7.5
Print
1 953
2 102
1.5
Print
Digital
—
95
—
Total circulation
Digital
1 953
2 197
2.4
Total
4 365
5 653
5.3
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
152 | South African entertainment and media outlook: 2012-2016
Consumer magazine publishing
...in brief
• Stronger than expected economic growth, the launch of a number of new titles, growth
in readership and rising circulation have resulted in higher than expected growth in
2011.
• Growing penetration of tablets and the launch of paid mobile apps will cut into print
circulation by 2015-16 and stimulate the digital market.
• Unlike print advertising, digital advertising is expected to grow at higher rates than the
growth expectations for the economy in the forecast period.
• Magazines are increasing their online presence by interacting with readers on their
websites, through blogs and through social media.
Overview
The consumer magazine market rose 7.8% in 2011, more than twice the 3.4% increase in
2010. This increase is significantly greater than the 1.6% we had anticipated in the last
edition and is due to stronger than expected economic growth, the launch of a number of
new titles, growth in readership and rising circulation.
The growth in the economy is expected to slow in 2012, which we believe will lead to
slower growth in consumer magazine spending. We then expect an improving economy
during 2013-14 followed by moderating growth in 2015-16, a pattern that will be reflected
in the consumer magazine market.
Digital editions are becoming popular and are beginning to attract advertising. As
broadband and mobile Internet penetration increases, we expect the digital market to
grow. Rising digital readership will lead to large percentage gains in digital advertising
from a currently small base.
Publishers are developing mobile apps and a paid digital circulation spending market is
emerging in 2012. Growing tablet penetration will expand the potential market for paid
digital distribution. Digital circulation will become large enough to start to affect print
circulation in 2015-16.
[The consumer
magazine publishing
scene] is a struggle
for survival, with too
many titles fighting for
the number of existing
readers and an everdiminishing slice of the
advertising pie.
Source: ‘The magazine circus!’,
http://www.marketingmix.
co.za/pebble.asp?relid=5743
(accessed 22 February 2012)
PwC | 153
Consumer magazine publishing
Figure 7.1:
Percentage print vs digital circulation 2011 and 2016
4%
Print circulation
Digital circulation
2011 – 100%
2016 – 96%
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Print circulation spending growth is expected to be moderate in 2012 and then pick up in
2013-14 as the economy accelerates. We then expect growth to slow in 2015 and spending
to decline in 2016 as distribution to tablets begins to become significant enough to cut into
the print market. Growth for the forecast period as a whole will average an estimated 1.5%
compounded annually.
We expect digital circulation spending to total approximately R95 million in 2016, which
will boost overall circulation spending growth to 2.4% on a compound annual basis.
We project total spending on consumer magazines to grow at a forecast 5.3% compound
annual rate, rising to R5.7 billion in 2016 from R4.4 billion in 2011.
Figure 7.2:
Total consumer magazine spending (R millions)
6000
5500
5000
Total consumer
magazine spending
4500
4000
2011 2012 2013 2014 2015 2016
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Print advertising is projected to increase at a 7.2% compound annual rate and a
developing digital advertising market will boost overall advertising growth to a projected
7.5% compounded annually.
154 | South African entertainment and media outlook: 2012-2016
Consumer magazine publishing
Consumer magazine publishing market (R millions)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2 176
2 265
2 085
2 150
2 400
2 500
2 700
2 950
3 200
3 400
3
6
6
8
12
18
24
32
43
56
2 179
2 271
2 091
2 158
2 412
2 518
2 724
2 982
3 243
3 456
1 750
1 880
1 825
1 890
1 953
1 988
2 052
2 116
2 124
2 102
—
—
—
—
—
14
20
31
63
95
Total circulation
1 750
1 880
1 825
1 890
1 953
2 002
2 072
2 147
2 187
2 197
Total
3 929
4 151
3 916
4 048
4 365
4 520
4 796
5 129
5 430
5 653
2011
2012
2013
2014
2015
2016
2012-16
CAGR
Advertising
Print
Digital
Total advertising
Circulation
Print
Digital
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Consumer magazine publishing market growth (%) 2007
2008
2009
2010
Advertising
Print
Digital
Total advertising
Circulation
Print
Digital
9.6
4.1
-7.9
3.1
11.6
4.2
8.0
9.3
8.5
6.3
7.2
50.0
9.7
100.0
0.0
33.3
50.0
50.0
33.3
33.3
34.4
30.2
36.1
4.2
-7.9
3.2
11.8
4.4
8.2
9.5
8.8
6.6
7.5
8.0
7.4
-2.9
3.6
3.3
1.8
3.2
3.1
0.4
-1.0
1.5
—
—
—
—
—
—
42.9
55.0
103.2
50.8
—
Total circulation
8.0
7.4
-2.9
3.6
3.3
2.5
3.5
3.6
1.9
0.5
2.4
Total
8.9
5.7
-5.7
3.4
7.8
3.6
6.1
6.9
5.9
4.1
5.3
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Figure 7.3:
Advertising vs circulation spending:
2007 vs 2011 vs 2016
2016
2011
2007
Circulation
Advertising
45%
39% 45%
55%
55%
61%
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
PwC | 155
Consumer magazine publishing
Advertising
Print
Print advertising jumped by 11.6% in 2011 due to an accelerating economy, an increase in
readership and the introduction of a number of high-profile international titles. Playboy,
Good Housekeeping, Rolling Stone South Africa, Top Gear, Forbes Africa and Quest were
among the successful international publications that launched local versions in South
Africa in 2011.
Custom magazines – titles offered free to selected audiences as an advertising vehicle
for the publisher – also flourished in 2011. Among the successful titles were W and Taste
from Woolworths, Dish from MultiChoice, Mercedes from Mercedes Benz and Spaces from
Plascon.
Overall readership rose 4.6% to 23 million in 2011 from 22 million in 2010. South Africa is
one of the few countries in which the print consumer magazine readership base is growing.
The combination of increased readership and an expanding economy contributed to the
double-digit increase in print advertising in 2011.
Readership growth appears to be continuing in 2012. There were 13 titles that averaged
more than one million readers per issue in 2011, led by Bona at more than three million
and Drum, True Love, Kickoff, Move!, You and Huisgenoot at more than two million each.
This is compared to 10 titles that averaged more than 1 million readers per issue in 2010.
New titles continued to be introduced in 2012, including Grazia and Live SA. Free titles are
also contributing to readership growth. On Route and Beer are two new free titles which
were launched in 2012.
Figure 7.4:
Bona
Drum
True Love
Kickoff
Move!
You
Huisgenoot
Amakhosi
People
TVPlus
Vuk’Uzenzele
Car
Men’s Health
Average issue readership 2011 (millions)
3,772
2,895
2,722
2,707
2,475
2,428
2,264
1,681
1,475
1,370
1,261
1,145
1,003
Source: All Media and Products Study
156 | South African entertainment and media outlook: 2012-2016
Consumer magazine publishing
Consumer magazines are one of the more cyclically sensitive advertising media because
the readership base tends to be more upscale than other media. High-quality glossy paper,
rich colours and targeted content make magazines attractive environments to display highquality products to a greater degree than other media. As one publishing blogger put it:
‘The real issue for us: What does the customer want (and what is she willing to pay for)?1’
Upscale products generally benefit more than staples do when the economy is expanding,
but suffer more than staples when the economy is falling. The large swings in print
advertising growth rates reflect this pattern. Print advertising rose 9.6% in 2007, fell 7.9%
in 2009 and increased by 11.6% in 2011.
The plunge in real GDP
between 2007 and 2009
accounted for the decline
in print advertising and the
rebound in real GDP growth
between 2009 and 2011
contributed to the rebound
in consumer magazine print
advertising.
Figure 7.5:
Real GDP growth vs print advertising growth %
12
10
8
6
4
2
0
-2
-4
-6
-8
With the economic growth
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
expected to be moderate
Print advertising growth
Real GDP Growth
in 2012, we anticipate
much slower growth in
Sources: Statistics South Africa, PricewaterhouseCoopers LLP, Wilkofsky
print advertising. We then
Gruen Associates
anticipate real GDP growth
to accelerate during the
subsequent two years and then decelerate, but still expand at healthy rates,
between 2014 and 2016.
Printed Magazines or Digital Magazines: Do We Have to Choose?, http://deadtreeedition.blogspot.com/2012/03/printed-magazines-or-digitalmagazines.html (accessed 5 June 2012)
1
PwC | 157
Consumer magazine publishing
Print consumer magazine advertising (R millions) 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2012-16
CAGR (%)
Print advertising
2 176
2 265
2 085
2 150
2 400
2 500
2 700
2 950
3 200
3 400
9.6
4.1
-7.9
3.1
11.6
4.2
8.0
9.3
8.5
6.3
7.2
% change
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
We expect a similar pattern for consumer magazine print advertising. Growth will slow
to 4.2% in 2012 and then accelerate during the subsequent two years, to reach a 9.3%
increase in 2014. We then look for growth to moderate to 8.5% in 2015 and to 6.3% in
2016.
For the forecast period as a whole, print advertising will increase at a projected 7.2%
compound annual rate to R3.4 billion in 2016 from R2.4 billion in 2011.
Digital
The digital market has been hampered by low broadband penetration, which has limited
magazine website traffic and digital magazine advertising. This is changing as wired
broadband penetration increases and mobile broadband access expands.
Most magazines now have websites and they are using these sites to stimulate interest.
Blogs, discussions, reader polls and original content are common features that are
attracting visitors without simply providing a digital version of the print edition. So far,
growth in website traffic has not cannibalised print readership.
Digital readership is becoming appealing to advertisers, although this market is still very
small in South Africa. Digital readers tend to be younger than print readers, and digital
editions provide advertisers with tools not available in print. For example, readers can gain
access to the advertisers website directly from an ad placed in the magazine. The advertiser
can therefore generate an impulse sale and shortens the distance between the consumer
and the sale.
Magazines are also using social networks to expand their reach. Huisgenoot has a Facebook
presence with approximately 190 000 members. Cosmopolitan, as with many other
magazines now uses Twitter to keep in touch with readers and has more than 27 000
followers.
Social networks help magazines sustain interest between editions and support ongoing
readership. They also encourage visits to magazine websites. Magazine publishers are
continuously seeking to create a brand and an identity for a magazine in order to stimulate
interaction with their readers. This is done through creating new magazines as part of the
same brand. Examples include the National Geographic brand launching various titles such
as National Geographic, National Geographic Kids and National Geographic Traveller.
Sarie, a popular women’s magazine, and owner of the titles Sarie Kos, Sarie Woon, Sarie
Bruid and Sarie Gesond, launched an online store in April 2012, where visitors can buy
anything from the newest fashion to kitchen equipment. Magazines traditionally have a
stockist index at the end of the magazine, but now consumers can simply log on to the
online store, purchase a product and have it delivered to them within a few days. Since
its launch, the number of unique visitors to the website has doubled monthly. This is just
another innovative way of using the magazine’s brand to further monetise the magazines
customer base.
158 | South African entertainment and media outlook: 2012-2016
Consumer magazine publishing
Digital consumer magazine advertising (R millions)
Digital advertising
% change
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2012-16
CAGR (%)
3
6
6
8
12
18
24
32
43
56
50.0
100.0
0.0
33.3
50.0
50.0
33.3
33.3
34.4
30.2
36.1
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Online offers advertisers greater opportunities to target audiences and specific niche
markets, similar to niche magazines, but with the added appeal of data. The attraction
for advertisers is that the platform can encourage interaction with video and via e-mail,
and extend the longevity of print campaigns if, for example, readers purchase back issues.
A digital magazine can provide monetisable knowledge of the customer as targeted
advertising can be planned using rich data that emerges from digital tracking.
The combination of broadband penetration growth and interesting website content
facilitated through increased smartphone and tablet use will drive traffic to magazine
websites. Growth in traffic will in turn attract advertising.
With respect to advertising rates, digital readers are still less valuable to advertisers than
print readers are. Consequently, digital reach does not generate advertising comparable to
that of print. Nevertheless, a growing digital readership base is attracting more advertising.
From a small base, we project digital magazine advertising to more than quadruple
during the next five years, rising to R56 million in 2016 from R12 million in 2011, a 36.1%
compound annual increase.
Figure 7.6:
Digital consumer magazine advertising (R millions)
60
50
40
30
20
10
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Total consumer magazine advertising
The way we promote
all of the formats in
which our content is
distributed is just as
important as what
content we put on them.
Noelle Skodzinski, editor of
Publishing Executive
Total consumer magazine advertising, including digital consumer magazine
advertising, will increase at a projected 7.5% compound annual rate during the next
five years from R2.4 billion in 2011 to R3.5 billion in 2016.
Digital advertising will comprise 1.6% of total consumer magazine advertising in 2016
compared to only 0.5% in 2011.
PwC | 159
Consumer magazine publishing
Circulation spending
Print
South Africa is one of the few countries in which print unit circulation has been expanding.
Between 2007 and 2011, print unit circulation rose by 11%. Because of its relatively low
broadband penetration, South Africans rely less on the Internet for information than they
do in other countries, and rely more on print media, including magazines.
South Africa also has a growing middle class, which is the target market for most consumer
magazines. Growth in this economic segment has expanded the market for consumer
magazines.
Approximately two-thirds of unit circulation in 2011 consisted of single-copy sales. The
reliance on single-copy sales gives the current state of the economy greater influence
over purchasing decisions than if the majority of sales were on a subscription basis.
Discretionary income plays a major role for the single-copy buyer. The high percentage
of single-copy sales also makes the market more vulnerable to a recession. In 2009, unit
circulation fell 3%.
In general, South Africa’s economy has grown faster than in many other countries, which
has contributed to the long-term increase in unit circulation. During the past two years,
unit circulation has increased by 6%.
The market is slowly evolving. The 66% share of single-copy sales in 2011 was down
from 77% in 2007. This pattern reflects a growing middle class that is making a greater
commitment to magazines than in the past.
In 2011, subscriptions increased by 9% while single-copy sales fell by 4%. If this pattern
continues, and we expect it will, subscriptions will account for the majority of unit
circulation in the next few years. This will make consumer magazines somewhat less
sensitive to the state of the economy and provide a more stable rate base for advertisers.
Print circulation has faced relatively little competition from digital alternatives, again in
large part because of South Africa’s low broadband penetration. We expect this to change
during the next five years as increased broadband and tablet penetration will make the
digital option available to more people.
Access Outlook online for the
full forecasts and economic
analyses for 12 industry
segments.
In order to support their print business, some publishers are bundling print and tablet
circulation. We believe that many readers will continue to buy print versions because they
prefer them, as do advertisers in such segments as luxury women’s fashion, where digital
cannot reproduce the impact or colour accuracy of print.
Visit Outlook online at
www.pwc.co.za/outlook
160 | South African entertainment and media outlook: 2012-2016
Consumer magazine publishing
In an effort to better engage
with their consumers and
advertisers, many South
African magazines are
launching more trade
and consumer events. An
example of this is the Your
Family Crafts and Arts
Expo, which has become an
annual event, offering an
opportunity to interact with
a strong and loyal following.
The ongoing trend towards the lifestyle-focused and enthusiast reader also helps encourage
a more stable readership and circulation of titles focused on special interests such as golf,
travel and running.
Unit circulation rose 3.0% in 2011. We expect a more modest 1.4% increase in 2012 as
economic growth slows, followed by somewhat faster increases in 2013-14 as the economy
picks up.
Beginning in 2015, a combination of moderating economic growth and increased digital
competition will affect the print market. We project unit circulation to be flat in 2015 and to
decline by 1.4% in 2016. For the forecast period as a whole, unit circulation will increase at
a 1.1% compound annual rate from 6.9 million in 2011 to 7.3 million in 2016.
We expect somewhat faster growth in circulation spending, reflecting modest growth in
average prices. Print circulation spending will expand by 1.5% compounded annually from
R2 billion in 2011 to R2.1 billion in 2016.
Consumer magazine print circulation market
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2012-16
CAGR (%)
Per-issue print unit
circulation (millions)
6.2
6.7
6.5
6.7
6.9
7.0
7.2
7.4
7.4
7.3
% change
6.9
8.1
-3.0
3.1
3.0
1.4
2.9
2.8
0.0
-1.4
1.1
1 750
1 880
1 825
1 890
1 953
1 988
2 052
2 116
2 124
2 102
8.0
7.4
-2.9
3.6
3.3
1.8
3.2
3.1
0.4
-1.0
1.5
Circulation spending
(R millions)
% change
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
PwC | 161
Consumer magazine publishing
Digital
While publishers have generally not been able to generate payments from online readers,
they have begun to develop a paid circulation market through mobile platforms.
Publishers are increasingly developing tablet applications to capitalise on the growing
penetration of tablets in South Africa. Tablets offer video content, full colour, the
convenience of a mobile device and often better picture quality than a computer, allowing
for content that is not available in print versions.
Tablets are very popular and declining prices will expand penetration and the potential
market for paid digital circulation. While people are getting used to accessing free online
content, they are more accustomed to paying for mobile content.
Approximately two-thirds of circulation spending consists of single-copy sales. Singlecopy sales tend to be impulse buys where people view the cover and are induced to buy
the magazine. Digital e-reader and tablet users are not faced with a cover unless they
choose to access it. Device users, however, tend to be heavy readers. A subscription model
in which subscribers would automatically receive downloads of the next issue and would
automatically be billed through their account, would likely generate a much larger take-up
rate and could result in a significant portion of the digital circulation market consisting of
subscriptions, in contrast to the trend seen in the print circulation market.
In the music and e-book markets, business models evolved over time until a workable
solution was reached that led to significant expansion of the market. We expect a similar
evolution with digital magazines and expect that a subscription model will ultimately
become the norm. Contrary to the music and e-book market, digital copies of magazines
are not cheaper than the print alternatives.
Media24 has launched tablet apps for Go! Travel and for Landbou Weekblad and has set
up a special unit, Touchlab, to develop tablet applications. Tablet versions of consumer
magazines are now available and we expect they will become more popular in the next few
years.
In South Africa, there is currently an insignificant market for paid content online but, we
believe people will be willing to pay for the convenience of having a magazine appear on
their tablet. This will, however, take time – a survey conducted by US-based online research
company Knowledge Networks shows that only 14% of current users would be willing to
pay to get a special iPad edition of a magazine they already receive in print. What’s more,
86% of iPad owners indicated that they would be prepared to ‘watch’ ads to gain free access
to content1.
Paid digital circulation is developing and becoming more established in other countries and
we expect it will develop in South Africa as well.
We estimate that paid digital unit circulation will total 50 000 in 2012 and rise to 330 000
by 2016.
We project digital circulation spending to generate R14 million in 2012 and to rise to
R95 million by 2016.
1 ‘iPad users prefer advertising to pay model for content’, http://adage.com/print/148247 (accessed 6 June 2012)
162 | South African entertainment and media outlook: 2012-2016
Consumer magazine publishing
Consumer magazine digital circulation market
2012
2013
2014
2015
2016
Per-issue paid digital unit circulation (millions)
0.05
0.07
0.11
0.22
0.33
40.0
57.1
100.0
50.0
14
20
31
63
95
42.9
55.0
103.2
50.8
% change
Circulation spending (R millions)
% change
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Total circulation
Total unit circulation will reach an estimated 7.63 million in 2016, a 2.0% compound
annual increase from 2011.
Total circulation spending will expand at a 2.4% compound annual rate to R2.2 billion in
2016.
Paid digital circulation will account for approximately 39% of total circulation spending
growth during the next five years. By 2016, digital will account for 4.3% of total circulation
spending.
Magazines inform, entertain and remain an enjoyable outlet for the reader. The digital
and online world presents unique challenges to traditional print magazines, but they will
continue to be an important part of the South African landscape over the next five years.
PwC | 163
Consumer magazine publishing
Consumer magazine publishing
–the legal landscape
The consumer magazine industry faces
similar legal challenges to publishers across
the sector. As with most publishing outputs,
consumers are increasingly accessing
magazines online or downloading magazine
content onto mobile devices. Magazine
publishers will need to take note of the
provisions of consumer law, company law,
competition law, intellectual property law
and the tenets of data protection and privacy
law.
Access to information
The Promotion of Access to Information
Act (PAIA) gives third parties the right to
approach private and public bodies to request
information held by them, which is needed in
the exercise or protection of any rights.
Advertising
The Advertising Standards Authority (ASA)
Advertising Code expects advertisers (online
or otherwise) to comply with the following
principles:
• Adverts should be legal, decent, honest
and truthful;
• Adverts should be prepared with a sense of
responsibility to the consumer;
• Adverts should conform to the principles of
fair competition in business; and
• No advertisement should bring advertising
into disrepute or reduce confidence in
advertising as a service to industry and to
the public.
Competition considerations
Strategic alliances are being formed across
the industry to allow for greater synergy
between traditional publishing and other
forms of media. This is attracting the
attention of the Competition Commission.
The law of unfair competition provides that
anyone who intentionally or negligently
causes loss or damage to a business rival (i.e.
a competitor) through wrongful conduct will
164 | South African entertainment and media outlook: 2012-2016
be liable for damages.
As an exclusionary right, the protection
provided by intellectual property rights can
lead to significant market power when no
substitutes exist in a market.
Consumer rights
The implementation of technological
protection measures (TPMs) can conflict with
the consumer’s freedom to access and interact
with a purchased product. The Consumer
Protection Act grants consumers the right to
redress for faulty purchases, while Section
43 of the Electronic Communications and
Transactions Act stipulates that online
publishers must publish specific information
about the company and that a sufficiently
secure payment system must be used.
Contractual challenges
Publishers need to obtain all the rights in a
publication in order to trade legally with the
final product. Cross-media ownership and the
growth of online publishing require careful
management of all relevant rights. The
publishing agreement must provide for all
the necessary rights in the publication. These
rights could include: the rights to reprints,
translations, film rights, format provision,
distribution and warehousing agreements;
syndication agreements; e-book agreements;
digital rights management; trademark
registration; confidential information and
international publishing sale and distribution
rights. Publishers are only allowed to
mandate collective rights organisations to
license the use of their publications if they are
the owner of the work. Blanket licenses are
ordinarily granted to educational institutions.
Copyright challenges
The distribution of content to the public
requires the consent of the copyright holder.
The Copyright Act regulates the production
and distribution of literary and artistic works.
Publishers have to understand, exploit and
avoid infringing copyright. Publishers must
protect the copyright they control and take
care when granting copyright licences to third
parties. Piracy of digital books is a constant
threat to the industry.
Consumer magazine publishing
The Copyright Act allows for ‘fair dealing’
as an exception to copyright infringement.
The copying of parts of a protected work is
allowed for private study or personal use of a
work.
Magazines copyright each issue as a
collection. Copyright in individual articles,
photographs and artworks is a separate
copyright.
Magazine publishers must register a
trademark in their titles (usually the
masthead). A trademark can combine a word
as well as the way it is written.
Copyright notices
Publishers should include copyright notices
or warnings on the published work. If
consumers are expected to agree to web-wrap
contracts, end-user licences or any other form
of licence, they need to be made aware of this
fact in advance. Appropriate technological
protection measures should be considered:
Will the content be locked or will it grant
only authorised persons the rights to access,
reproduce or forward copies of the work?
The ECT Act places a liability on Internet
service providers to notify subscribers of
infringement reports from copyright owners
and to comply with take-down notices
regarding infringement of protected content.
Defamation
Publishers can be sued for publishing false
and defamatory statements. Defamation law
protects a person’s right to their reputation.
Digital rights management
The move from print to online presents
publishers with access control and copyright
challenges. Digital rights management
(DRM) is used by publishers and hardware
manufacturers to limit the use of digital
content after sale. But DRM is increasingly
regarded as a challenge to the industry, less
so than piracy. Consumers are increasingly
expecting multi-format capacity on
purchased products. Most DRM systems
use technological protection measures to
protect the product. The ECT Act provides
for a broad restriction on circumvention of
any technological protection measures and
does not have any limitations or exceptions
for legitimate use. This can be regarded as an
infringement of consumers’ fair dealing rights
since DRM makes no distinction between
infringing and legitimate use of a product.
The challenges presented by DRM are that
monopolies can be created over devices that
handle the media and works are rendered
inaccessible after copyright has expired,
creating permanent lock-up in a product.
Privacy rights can be affected by DRMs in
the following ways: login and registration
facilities, biometric identification, spyware
that sends information about the user without
the end user’s knowledge or approval,
surveillance functionalities that gather
information about users’ reading, viewing
and listening habits.
Publishers are increasingly becoming aware
that while DRMs can be used not to enforce
legal rights, they can displace them too.
The constraint on information presents a
challenge rather than an opportunity to
publishers – thriving in an increasingly
globalised, converged market requires a new
approach.
In managing their digital rights, publishers
must now consider file sharing options
and cross-border licensing of on-demand
availability rights
Electronic marketing
Section 45(1) of the ECT Act stipulates that
where an online publisher sends unsolicited
commercial communications to a consumer,
the online publisher must on request from
the consumer (i) remove the consumer from
the mailing list and (ii) provide the consumer
with the source of the consumer’s personal
information.
Freedom of speech and
expression
Although both rights are protected by the
Constitution, expression that amounts to hate
speech is prohibited. This right is limited by
the rights of others to, among others, dignity,
non-discrimination and privacy.
PwC | 165
Consumer magazine publishing
Internet and electronic uses
Online publishing issues
Publishers cannot assume their rights to
publish include publication on the Internet,
as an e-book or in a multimedia format.
Publishers must ensure they have the rights
to publish online or electronic versions of a
work.
Terms and conditions of use are a prerequisite
and should cover data protection and privacy
practices. Click-wrap and shrink-wrap end
user licences must be clearly defined. Clickon payment facilities must be managed in
line with the requirements of the Consumer
Protection Act and the ECT Act.
Privacy
Guaranteed by the Constitution, and weighed
up against public interest considerations, this
right safeguards private information from
being published without reason. Invasion
of privacy can take two forms: disclosure of
private information and intrusion into the
private sphere of another.
Privacy rights are infringed when information
is published and/or distributed without the
provider’s consent. Publicity rights prevent
the commercial exploitation of the value of
an individual’s name and/or likeness and
applies to anyone whose name and likeness is
used without their permission.
Online payment
Increasingly, online publishers are
introducing pay walls for specialised content;
this activity places publishers within the
ambit of the provisions of the ECT Act.
Linkages (hyperlinks and metatags) in
multimedia online content can expose
publishers to copyright infringement of
content owned by third parties.
Special content
Certain content creates legal risks. Such
content includes user-generated content,
offensive content and content that is licensed
and disseminated under alternative licensing
models. Third parties may claim ownership
in user-generated content or take offence at
allegedly offensive content.
Social media
Legal risks presented by the use of social
media include unauthorised disclosure by
employees of confidential information,
unauthorised transfer of intellectual property,
reputational risk and the loss and dilution of
brand value.
Denise Fouché – Technology Legal Advisory Services,
PwC
View year-on-year growth for
every data line.
Visit Outlook online at
www.pwc.co.za/outlook
166 | South African entertainment and media outlook: 2012-2016
Consumer magazine publishing
Global trends in the consumer magazine industry
Outlook
• Overall global spending on consumer magazines fell by 0.8% in 2011, the result of a
downturn in print advertising following a brief rebound in 2010 and ongoing decreases
in print circulation spending. We project that spending will begin growing again in 2012,
and will average 1.3% growth on a compound annual basis to reach $80.2 billion in 2016
from $75.2 billion in 2011.
• Global print advertising in consumer magazines fell by 0.9% in 2011.We expect
the market to turn around in 2012 and to expand at modest rates averaging 1.5%
compounded annually to $30.9 billion in 2016 from $28.7 billion in 2011.
• Digital advertising totalled an estimated $2.1 billion in 2011. We project that this will
rise to $5.5 billion in 2016, a 20.8% compound annual increase.
• As a result, digital advertising will account for 15.1 % of total consumer magazine
advertising in 2016, compared with 7.0% in 2011.
• Total consumer magazine advertising will increase from $30.9 billion in 2011 to
$36.4 billion in 2016, a 3.4% compound annual advance.
• Print circulation spending fell by 2.0% in 2011. We expect decreases averaging 1.5%
compounded annually during the next five years to $40.9 billion from $44.2 billion in
2011.
• A digital circulation spending market is developing that will total an estimated
$2.9 billion in 2016.
• Gains in digital circulation spending will begin to offset declines in print in 2015.
However, total circulation spending will still be lower in 2016 than in 2011, registering a
0.3% compound annual decline to $43.7 billion in 2016.
Key drivers
• Improving economic conditions will lead to modest growth in print advertising during
the next five years.
• However, gains will be dampened by declining print unit circulation as well as loss in
advertising share to the Internet and television. As a result, growth will not keep pace
with nominal GDP, nor will it expand as fast as inflation.
• In real terms, print advertising will decline. However, growing digital readership will
fuel digital advertising.
• The lure of free online access and the emergence of mobile access on tablets will lead to
continued decreases in print unit circulation and declining print circulation spending.
• Growing penetration by tablets and the willingness to pay for mobile content will drive
an emerging digital circulation spending market.
PwC | 167
Consumer magazine publishing
Global consumer magazine publishing market by component (US$ millions)
2007
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012-16
CAGR (%)
37 027
35 597
28 447
28 970
28 707
28 891
29 205
29 697
30 285
30 956
% change
3.1
-3.9
-20.1
1.8
-0.9
0.6
1.1
1.7
2.0
2.2
1.5
Digital advertising
809
1 478
1 479
1 781
2 149
2 641
3 189
3 810
4 576
5 518
% change
71.8
82.7
0.1
20.4
20.7
22.9
20.7
19.5
20.1
20.6
20.8
37 836
37 075
29 926
30 751
30 856
31 532
32 394
33 507
34 861
36 474
4.0
-2.0
-19.3
2.8
0.3
2.2
2.7
3.4
4.0
4.6
3.4
49 258
48 475
46 022
45 087
44 196
43 509
42 775
42 078
41 436
40 873
1.0
-1.6
-5.1
-2.0
-2.0
-1.6
-1.7
-1.6
-1.5
-1.4
-1.6
Digital circulation
—
—
—
17
169
300
529
1 081
1 934
2 860
% change
—
—
—
—
894.1
77.5
76.3
104.3
78.9
47.9
76.1
49 258
48 475
46 022
45 104
44 365
43 809
43 304
43 159
43 370
43 733
1.0
-1.6
-5.1
-2.0
-1.6
-1.3
-1.2
-0.3
0.5
0.8
-0.3
87 094
85 550
75 948
75 855
75 221
75 341
75 698
76 666
78 231
80 207
2.2
-1.8
-11.2
-0.1
-0.8
0.2
0.5
1.3
2.0
2.5
1.3
Print advertising
Total advertising
% change
Print circulation
% change
Total circulation
% change
Total
% change
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates, Global entertainment and media outlook 2012-2016 (PwC, 2012)
168 | South African entertainment and media outlook: 2012-2016
Consumer magazine publishing
PwC | 169