MEDIA ANALYSIS: Another Media24 restructuring won’t fix a broken market

Media24, South Africa's largest digital news publisher, has attempted numerous attempts to turn around its failing business, including disposals, closures, massive headcount reductions, and a digitally transformed subscription model. Despite these efforts, the company's financial losses have increased by 60% in the latest annual accounts.

The company's annual accounts show a widening adjusted Ebitda loss to $16 million (about R263 million), while revenue fell 28% to $102 million. Media24's loss of market share and shrinking revenue highlight the challenges faced by journalism in a market that is no longer economically sustainable for the creation of public interest journalism.

The Competition Commission's final report on the Media and Digital Platforms Market Inquiry found that even with innovation and adaptation to the online environment, many news media still face financial losses or are forced to cut costs and staff to prevent them. The Commission noted that News24 and Netwerk24 led the subscription market with over 200,000 subscribers, but the decline in advertising revenue due to heavily discounted subscription rates has not translated into commensurate growth.

The report also revealed that technology costs on digital-only brands more than doubled between 2018 and FY2023, and publishers' share of South Africa's digital advertising spend was only about 4%. This situation underscores the need for a market failure approach to journalism, rather than simply focusing on operating model changes.

The market failure argument highlights that journalism is a public good, but it is not funded like other public goods, which creates a structural problem in sustaining public interest journalism in a commercially viable manner.