Finding the appropriate fee structure will be essential for the uptake of mobile broadband services in SA, says Media24 CEO Francois Groepe.
Speaking to ITWeb at the Media24 CIO conference in Somerset West yesterday, Groepe said digital models for media companies have not yet fully evolved worldwide. There is a substantial difference between what is appropriate for developing, as opposed to developed world, countries and consumers, he noted.
“Six months ago, almost everybody would have told you that subscription models were dead, because the Internet is considered a free service model. However, now some of the major world newspapers are considering introducing subscriptions to ensure their revenue streams are shored up.”
The global economic crisis has hit traditional newspaper houses hard. The New York Times recently sold its own building in order to improve its cash flow, and is now considering charging for access to its Web site.
South African media companies are not quite in the same situation as its First World counterparts as broadband uptake is not yet as widespread in the country, Groepe pointed out.
“There are two major factors influencing the South African media market. Firstly, the widespread penetration of mobile phones and, then, there is the psychology of the market as they are used to paying for content over their phones.”
However, broadband prices for mobile phones will have to come down, and the fee structures will have to be greatly simplified so that consumers clearly understand what they are paying for.
“Some kind of flat fee rate will have to be brought in, such as R50 for one gigabyte, or whatever,” Groepe said.
Media24, part of the Naspers Group, is a diversified media company with a mixture of traditional ink and print newspapers and new media operations.
“Most of our products have moved into the new media and mobile spaces; however, more can be done.”
The rise of citizen journalism, while a sign of the democratisation of journalism, is not a complete substitute for professional journalism, Groepe maintains.
“Professional writing will still be necessary and someone has to pay for it, and so the appropriate revenue models will have to be thought through.”
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