Iqbal! New houses, new readers!

Alameen Brendan Templeton gives some free media publishing advice to new Independent Newspapers boss Iqbal Surve…


Tony O’Reilly specialised in producing cost-effective news. For 18 years. Yes, it has been that long. We’ve been supersizing literary Big Macs for nearly two decades. That’s got to have had some consequences. I don’t know if it’s really possible to survive something like that.

Those 18 years weren’t just any old years; they were the first 18 years of our democracy.

One thing new Independent Newspapers boss Iqbal Surve cannot do is tread water. He must grow or he will die. Some say the Sunday Independent acted as a contrived tax loss for most of these 18 years.

After first killing off The Sunday Star with a hideous “re-design”, The Sunday Independent was resurrected in its place and only occasionally reached a bare third of its predecessor’s highest circulation figure in excess of 120 000.

Some say, with the restructuring of the group in the early Nineties, Tony ensured his Gauteng subsidiary heaped all its separate titles’ costs onto the Indie, which meant the Sunday paper could never post a profit and so qualified as a tax loss – all its costs were deducted from the amount of tax Tony paid to the taxman every year.

In effect, it is speculated that the taxpayer paid for the operational costs of the Gauteng branch for about 15 years or so.

So, while profits from Tonight, The Star, The Saturday Star and Business Report, would go to Tony, their accumulated costs would fall onto the Indy’s books and would be covered with a resultant tax break (I heard in 2000 it was about R6 million annually) at the end of the year.

Accountants will tell you, tax is deducted AFTER expenses, and is the last deduction before distribution of profits – the less your tax, the greater your profits, which meant Tony got an additional R6 million in pure profit every year … R6million X 15 years = ?

I hope there’s no truth to such speculation, that such accounting juggling amounted to evasion rather than avoidance. Or that Surve was kept in the dark about such jiggery or that the Indy’s recent return to profitability WAS due to better journalism and not a realignment of accounting procedures ahead of a due diligence in preparation for disposal before bolting to Blighty with the swag.

Say this turns into a awful mess, I’d suggest Surve pass the buck to England, and hopefully the Independent Group wouldn’t’ve gone bankrupt by the time, if ever ‘cause this is all just speculation and any new homeowner will tell you all the bugs come crawling out once you take occupation, the taxman turns his beady eye on the bogman.

I don’t know about Cape Town, or Durban, but The Star’s presses are due for a scrapping. Either Surve finds himself another printing press for Joburg, or he must contract with someone else to print his paper, or enter into a JV with another group to jointly build one.

If I were him, I’d take on a LOAD of debt, go public again, and then build a HUGE printing works in Midrand to service my operations.

These would have to expand, principally by opening up new titles and refocusing the group’s news philosophy to hone in on retail-inspired local and regional news. The marketing bias would have to be consumer-friendly, informed by observable lifestyle changes that are occurring on a mass basis across the country.

I would open up new, weekly titles, first in Ekurhuleni-Midrand, Vereeniging, Soweto-Eldos-Lenasia and Mogale City (Krugersdorp), before turning to Rustenburg, Kimberley, Mbombela(Nelspruit), Polokwane, and Bloemfontein. I’d try buy the Daily Dispatch and The Witness.

And I would consider making some of them free sheets. Maybe I’d put a cover price on once I can grow them into dailies.
I know. A lot of you have read some articles in AD Magazine that say newspapers’ days are numbered. Awful stories emanate from Europe and the US about the decline.

It’s all very gloomy. But here in Lenasia where I live, we have six new, weekly newspapers circulating. All free sheets. Very amateurish and very shoddy. But all bulging with advertising. And they’re all read.

I can say, from first-hand experience, that the same is happening in Bojanala/Rustenburg and Mbombela/Nelspruit. And these two cities are the fastest-growing in South Africa, maybe Africa. So why the hell not get in first? It’s green fields, blue sky territory.

The Caxton group hasn’t been as slow as everyone else in picking up that massive and sustainable growth exists in the “lower-income”, mass market. It’s opened Rising Sun titles in most “Indian” and many “coloured” townships in KZN and Gauteng. Durban has the Capital Media group with about a dozen freesheet titles.

Just follow housing; it shows the retail way. Everywhere in rural areas and in “former townships”, national retail groups selling housing supplies, hardware, mattresses, kettles, stoves, microwaves and DStv dishes and decoders are opening up new stores for a new generation of customers who now have electricity and a home. Millions of black people every weekend are strolling into these stores with fistfuls of cash, looking to spend on their new lifestyle.

Unfortunately, the vast majority of these people don’t read newspapers that are produced in centralised subbing pools that feed on news produced by centralised, group editorised newsrooms that standardise journalism across several cities by focussing on “important”, national issues.

They’re worried about other issues and are going to vote ANC anyway, no matter how many Zuma penis stories appear. The big newspapers’ news focus is lost, utterly, on them. There is total disconnect.

And so the big advertisers can’t reach them with our current big newspapers. And that’s why they’re dying.

But there, in housing trends, you will find the lifestyle focus that has potential advertisers going dilly with store-expansion plans. The big growth in spending is happening at the lower end and is likely to be around for a long time.

Unfortunately, South Africa’s big media groups have continued enjoying the largesse of sharing the big advertising streams. It’s been all buddy-buddy for a long time.

But now that the JSE isn’t obliging companies to publish their results in the business media, things are being shaken up. The tub of butter is shrinking.

It’s also shrinking because all those small locals are increasingly starting to get a foothold in the national market. That’s the Rising Sun’s strategy – getting to the mass market through local titles and selling advertising nationally.

And Iqbal Surve needs to do the same thing, with a mind on growing weekly freesheets into daily, cover-price newspapers in the big, growing, underserviced cities like Bojanala, Mbombela and Polokwane.

News focus needs to correspondingly change. Local and regional news, produced locally. Council and provincial affairs – there’s a lot to talk about, that a lot that needs to be said and hasn’t been said for 18 years.

Just think about it – all the town councils, metros and regional parliaments have massive advertising budgets, but they have no where to spend them where they know their messages will reach their residents.

That’s a figure that HAS to change. And I reckon the first group to crack that particular egg is going to enjoy a very nice omelette.

Real South African journalism, not Reuters, AP or AFP.