This week a well known South African publishing house Media 24 announced they would be retrenching between 130 and 170 jobs with lifestyle and sports taking the heaviest knocks. This was always going to happen because the print industry is on it's way out. The question has to be asked why these people were not making tracks getting out of the dying industry when everyone knows the time left is limited in a few years and not many years at most.
This year revenue was down by 60% at $102 million and just three years ago that was $207 million. The business model is broken so retrenchments are not going to fix the inevitable. This is not a business you can turn around as the customer base has gone and is or has already moved away.
Media 24 has increased the debt by an additional $16 million this year so why would anyone throw good money at a bad business. The trend is not going to miraculously change and next years losses will be far higher.
The trend with those under 50 is not the same as what our parents did as an everyday thing like buying newspapers and magazines. I have not seen a newspaper being sold in a supermarket for years with the only exception being Sunday with the Sunday Times on sale. Even magazines are not available in the same volumes they used to be 20 years ago and there are only a selection of a dozen or so.
Newspaper sellers used to be at major traffic lights and I have only seen one seller lately and his bundle of stock is so small you wonder why even try keep this business model going.
When I worked in the UK the local Newsagent up the road was a very good business with the majority of sales being those local residents subscribing to the daily newspapers and weekly magazines. In South Africa it was similar, but never quite the same and was not really a stand alone business. CNA known as Central News Agency was the go to place for anything magazine related due to the variety and they went into business rescue in 2021 and have since disappeared.
I think the biggest tell tale sign is when you go to the dentist or doctors and they sued to have the latest magazines spread out on a coffee type table for your convenience. I never really paid attention until my last dentist visit earlier this year and noticed that the magazines were up to 15 years old. There were no new ones and this would have been a good reliable customer for media companies that is no longer.
Digital is the way forward and asking people to subscribe is not going to pay off either. Adverts is the only way they can make revenue which means they have to grow their popularity or they will slowly fade away. Like everything digital you have to grow your following and cannot rely on support from an ageing support base.
When we look around the general every day life with things we have always known they are slowly disappearing and it is not just down to technology. The 40 and 50 year old's have different interests than what their parents and grandparents had and we are seeing a generation swing.
This generation swing is changing what is considered desirable and a good example is the US classic car market where models form the 60's and 70's that used to fetch hundreds of thousands are now worth 30% of those values. Buyers no longer care about matching numbers and the pool of buyers has shrunk so much the model years in demand have changed to those of the 1980's and 1990's. This is like the changing of the guard and is a natural transition of buyers wants moving on to their childhood time frames.