The Competition Commission of South Africa has embarked on a comprehensive market inquiry into digital media platforms as part of its move to safeguard the future of independent journalism,
This inquiry seeks to address market features within digital platforms distributing news media content that potentially impede, distort, or restrict competition. It reflects the commission’s recognition of the adverse implications that such market dynamics might hold for South Africa’s news media sector. This development underscores the profound transformation occurring in the country’s media landscape due to shifting consumer behaviors and emerging technological forces.
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The Complaint and Pressing Concerns
The impetus for this market inquiry originated from a complaint lodged in 2021 by Publisher Support Services (PSS), representing founding members Media24, Arena Holdings, Caxton, Independent Media, and Mail & Guardian Media. PSS, in its submission to the Competition Commission, highlighted the profound challenges confronting news publishers in South Africa, Techcentral reported. The transition to digital news consumption and advertising, while promising new opportunities, has concurrently led to a significant decline in advertising revenue and escalating operational costs.
News publishers, despite making rigorous cost-cutting efforts, find themselves in a precarious financial position. The increasing demand for digital content has required substantial resource allocation, affecting the sustainability of independent journalism. This is particularly concerning, given that independent journalism is a cornerstone of a healthy democracy.
Global Concerns and Investigations
South Africa’s inquiry follows a wave of similar investigations globally, primarily centered on the impact of digital platforms on the news media industry. The focus has been on various facets, including the generation of advertising revenue, equitable compensation for content, referral traffic, and the overall sustainability of independent journalism. Investigations conducted in other countries have delved into ad-tech markets, ad exchanges, and the complexities of online advertising that involve publishers, advertisers, and digital platforms.
South Africa, like many other regions, is grappling with significant shifts in the consumption of digital news. The widespread use of smartphones, coupled with more affordable internet access, has redefined consumer behavior and subsequently affected the cost and revenue dynamics of the nation’s news media businesses. Traditional revenue sources such as classifieds and print advertising have faced declines, while digital advertising and aggregator content revenues show promise. However, the influence of digital platforms and ad-tech markets on competition for these revenue streams cannot be overlooked.
Promoting Diversity and Digital Visibility
The South African inquiry is set to delve deeply into the effects of these markets on the digital visibility and competitiveness of smaller news organizations. A particular focus will be placed on community-based and African language news media. The inquiry’s scope encompasses search engines, social media sites, video-sharing platforms, news aggregation platforms, and participants in the ad-tech market.
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Preserving Independent Journalism
A fundamental concern that drives this inquiry is the preservation of independent journalism, which is pivotal to a healthy democracy. The commission is acutely aware that investigative journalism, in particular, carries cost implications. Hence, it will investigate the extent to which digital platforms reward such journalism. This commitment aligns with the global recognition of digital platforms like Google and Meta Platforms, the parent company of Facebook and Instagram, serving as gateways to reach consumers.
South Africa’s digital media market inquiry is a pivotal examination of the evolving media landscape and its profound implications for the future of independent journalism. As digital platforms and news media engage in a complex dance for advertising revenue, competition authorities must ensure the sustainability of quality news content. By investigating the influence of these digital platforms, the Competition Commission strives to preserve the cornerstone of a robust democracy: an informed, diverse, and independent media landscape.