Naspers bosses back Media24’s digital strategy after announcement of newspaper closures
CFO says media division is growing its subscriber base
Naspers executives have affirmed that its media division, which served as the cornerstone of the group’s global success, continues to be relevant.
The decision to shift a substantial portion of its print offering to digital-only publications was a strategic move to align with reader preferences.
The group’s president and chief investment officer, Ervin Tu, said while the decision to do away with the print versions of City Press, Rapport, Beeld, Soccer Laduma and Daily Sun to digital products in a process that might lead to 400 job losses, it was not taken lightly. It was a strategic move aimed at creating a profitable media house.
“We are going where the readers are. Readers today around the world have moved very firmly onto the online world. I won’t be as bold as to say print is dead ... but much of the world, including SA, has moved to online. That is what we are investing in,” Tu said.
“We also have to acknowledge that in that transition, there are difficult decisions that have to be made that affect people. We acknowledge that and don’t take decisions lightly.”
As digital brands, the affected print publications will reside on the group’s Netwerk24 and News24 platforms.
Naspers said the 2024 financial year was a turbulent one, with Media24 recording mixed results. Shortfalls in media revenues, led by a contraction in digital advertising and shrinking circulations ate into the company’s bottom line.
Media24’s revenue for the year to end-March declined 16% to $182m, while a trading profit plunged from $7m to $2m.
Digital subscribers
The company, however, reported double-digit growth in digital subscribers. News24 and Netwerk24 combined subscribers grew 19% year on year, breaching the 200,000 mark.
Naspers CFO Basil Sgourdos said the group was satisfied that Media24 was thriving and growing its subscriber base.
“The numbers we quote are subscriptions, or the actual paying subscribers. The churn rate is less than 2% per annum. That is incredibly low, subscribers actually join and stay. In aggregate, both Netwerk24 and News24 on their own are profitable businesses if you look at revenue slash direct costs,” Sgourdos said. “It is a great credit to Ishmet [Davidson] and his team for delivering product and content that consumers want to read and pay for.”
Media24 has reached a deal with Novus Holdings to sell its media logistics business, On the Dot, and its community newspaper portfolio subject to regulatory approvals.
In its annual report published on Monday, Naspers said M24 Logistics countered lower e-commerce volumes with strict cost control, and completing installation of the new Cape Town warehouse was well within budget.
It said Media24 TV was making good progress on the back of sustained growth in external commissions.
“The benefits of a well-diversified business portfolio and strict cost management were again evident as Media24 remained profitable, albeit at a lower level than last year.”