Media consumers were increasingly relying on video-sharing platforms, news aggregators, and social media.
The Media and Digital Platforms Market Inquiry (MDPMI) launched by the Competition Commission on Tuesday would delve into various issues facing media sustainability, said Commissioner Doris Tshepe.
The enquiry was designed to scrutinise the distribution of media content on South African digital platforms and the Advertising technology (Adtech) markets that linked buyers and sellers of digital advertising inventory.
This inquiry stems from concerns that there may exist market features in digital platforms that distributed news media content, and associated Adtech markets, that might restrict, distort, or impede competition, with potential adverse effects on South Africa's news media sector.
Highlighting the significance of the MDPMI during the launch, Tshepe emphasised that the media played a crucial role in ensuring an informed public and the smooth functioning of a democracy.
“The inquiry comes at a critical moment for the media industry as news consumption rapidly shifts online and traditional sources of funding to print and broadcasting advertising decline,” Tshepe said.
The MDPMI will be led by James Hodge, Chief Economist and Acting Deputy Commissioner of the Commission, with Paula Fray serving as a panel member.
Fray is an esteemed veteran South African media practitioner with experience locally and abroad.
In her address, Fray pointed to the rise in digital platforms, which presented both opportunities and challenges to the media, including a need for sustainable business models.
“These (challenges) are driven by technological disruptions most recently, such as artificial intelligence, social media-fuelled pressures to tell stories faster, amid a tsunami of misinformation and disinformation, online harassment, global challenges such as the war in Ukraine, economic pressures, reduced newsroom resources, post-Covid and challenges to press freedom and press and freedom of information,” Fray said.
In outlining the areas of focus of the MDPMI, Hodge said that media consumers were increasingly relying on video-sharing platforms, news aggregators, and social media to access news and generate revenue and that there was a need to promote diversity in news and public interest journalism.
The MDPMI yesterday also released a Statement of Issues and Requests for Information (RFI) to platforms, Adtech companies, and media organisations following the publication of the final Terms of Reference last month.
During this initial phase, the MDPMI plans to conduct two rounds of information gathering, with public hearings scheduled for March next year.
The MDPMI encouraged all interested stakeholders and the public to submit their input by November 14.
The Commission said the MDPMI followed numerous global inquiries and investigations led by competition authorities regarding the impact of digital platforms on news media publishers, particularly with regard to advertising revenue generation and the sustainability of quality news content.
Competition Commission spokesperson Siyabulela Makunga said in South Africa, there was a parallel trend with a growing shift towards consuming digital news sources due to increased smartphone adoption and affordable internet access.
He said the distribution of news content through digital platforms had become a crucial means for news media businesses to reach consumers, leading to greater reliance on these platforms over time.
“This shift has impacted the cost and revenue structure of South African news media businesses, with traditional classifieds and print advertising revenue decreasing while digital advertising revenue has risen. However, digital platforms and Adtech market dynamics can influence competition for these revenue streams, which is a key focus of the MDPMI. The inquiry will also assess how these markets affect the visibility and competitiveness of smaller news organisations, including community and African language news media, and the diversity of news available to consumers,” Makunga said.
The Competition body said the MDPMI would primarily concentrate on key digital platforms, including search engines, social media sites, video-sharing platforms, and news aggregation platforms, as well as Adtech market participants on the supply and demand sides, and Ad exchanges.
The inquiry would take a forward-looking approach to assess the impact of new technologies adopted by digital platforms, such as generative AI search support like ChatGPT, on businesses in the South African news media sector.
The inquiry's scope was limited to businesses within the South African news media sector, including news publishers and broadcasters.
According to a Meltwater research on the current media landscape in South Africa titled, Media In South Africa And Beyond, published in May, at the start of this year, 43.48 million internet users, 25.8 million social media users, and 112.7 million cellphone connections were recorded in South Africa.
With a population size of more than 60 million, these stats suggest that almost all South Africans have access to a cellphone, and almost everyone is an internet-users.
According to Statista, South Africa’s largest segment is still Traditional Media with a market volume of $4.64 billion (R88bn) this year.
However, the Covid-19 pandemic saw an increase in the demand for digital media and the need for digitalisation on a global level.
South Africa is a follower of global trends and the steady increase in internet users, cellphone connections and new ways of consuming media will mean that traditional media channels will start to stagnate and there will be a market shift towards digital media in the future, the research showed.
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