Audit Bureau of Circulation

“Health Check”

1st Quarter 2009

- Report 55 -

Period: January – March 2009

Presentation: 19th May 2009

Structure Introduction

Purpose

News in print

Global happeningsLocal developments

Health Check

StructureReport Back

Conclusion

Introduction As our industry continues to evolve, innovate and reinvent itself and

so must your ABC in the way we conduct, evaluate and share the figures and trends.

This release marks a fresh approach to this task. Prompted by mounting time and financial pressures your ABC decided at the end of 2008 to reduce the number of full breakfast type presentation to 2 per year and to introduce 2 new “Health Checks”.

Health Checks will be scheduled alternately commencing with this presentation, i.e.:

Health Checks: Q1 & Q3Full presentations: Q2 & Q4

Purpose

Health Checks:

The purpose of the “Health Check” will be to provide all interested parties with a top line category performance perspective. This abridged presentation will be complemented by a key note speaker.

Naturally comprehensive details will still be available in print, on-line and via industry tools.

Full Presentations:

The purpose, format and detailed commentary will remain as previously.

News in PrintGlobal

Magazines increasingly leveraging cellular phones to connect with readers. (Source: TheMediaOnline)

Woman's Day US asked readers to use their cell phones to photograph a particular advertisement and send it back to them in exchange for an electronic discount voucher. Over 200 000 entries were received !

GQ in the US recently got readers to used cellular phones to photograph a particular sports car and in exchange they sent back a ring tone of the car at full throttle!

While the advertisers benefitted in these examples so to did the publishers by establishing another reader connection and content platform.

Tough times.

Irelands major newspaper publisher expected to default on R2.2 billion debt due on 18th May.

The Boston Globe faces an uncertain future due to shrinking advertising revenue!

Aussies buck global trends!

Newspaper revenues up 1.3% for national, 2% for retail and magazines up 2.1%.

Also highest share of advertising pie at 35% vs global norm of 28%

Local

Marketing Mix Guide to the ABC

In response to growing interest in circulation data, Marketing Mix in association with the ABC has prepared an industry guide called Print Measurement Guide.

This publication is compact and references the views of numerous key industry experts

Planning tool gets circulation data

Announced last year by the AMF and launched at AMASA on the 6th May.

Programme re-written & tested on Q4 data. Title selection will remain readership based but

value will be measured on circulation. User defined criteria to arrive at circulation that

matters – 5 groupings available - with no default.

Select Circulation Type

From currency to confidence From currency to confidence and now to adding real value.and now to adding real value.

An UpAn Up--date 6date 6thth May 2009May 2009

Calendar Events – Second Quarter 2009

• Submission of Data – 28 July 2009

• Audit Reports – 4 August 2009

Next Presentation

• Release of Data – 13 August 2009

“Health Check” Structure:

Total category circulation compared - including new listings.

Bar Graphs comparing current quarter with corresponding period.

Comparisons drawn for classes of circulation within each Sector.

2 2 2 2 2 2 2 2 2 2

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

9 8 9 8 9 8 9 8 9 8

Free Daily Week B2B Consumer

Newspapers Consumer B2B / CustomSubs Subs Total Paid

Single Copy Single Copy Requested

Total Paid Total Paid Non Requested

Grand Total Total Free Total Free

  Grand Total Grand Total

Membership ComparisonMembership Statistics 31 December 2008 Admissions Removals 31 March 2009

Magazines 476 4 -22 458 Business to Business 174 - -3 171

Consumer 187 - -1 186 Custom 80 - - 80

Free Magazines 35 4 -18 21

Newspapers 297 5 -2 300 Daily 26 - - 26

Weekly 12 - - 12 Weekend 27 - - 27

Community 64 - -1 63 Hybrid 1 - - 1

Free Newspapers 167 5 -1 171

Total ABC of South Africa 773 9 -24 758

NewspaperNewspaperQuarterly TrendsQuarterly Trends

2,3

48,3

56

57

4,6

60

1,6

30,1

75

2,3

96,4

31

55

8,9

05

1,6

87,2

27

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Daily Weekly Weekend

2009

2008

5,14

2,68

5

-

4,85

6,83

5

-

-

750,000

1,500,000

2,250,000

3,000,000

3,750,000

4,500,000

5,250,000

- Free -

2009

2008

Highlights

• Daily Newspapers continue to decline – down 3.4%.• Weekend category also down, Q4 2008 was down -0.58% now -2.01%.• Free Newspapers – new entrants mainly driving growth, +5.9%.

Category Analysis : Category Analysis : Daily NewspapersDaily Newspapers

TotalAnnual % % of

TotalAnnual % % of Total Annual % % of

TotalAnnual % % of

TotalAnnual %

Subscriptions Copy Sales Bulk Sales P M I E

(3.85%) (1.57%) (33.60%) (25.28%) (3.38%)

331,569 20.3% 1,234,247 75.7% 13,636 0.8% 50,725 3.1% 1,630,175

2008 344,860 20.4% 1,253,927 74.3% 20,535 1.2% 67,890 4.0% 1,687,227

P/Yr -0.3%

2007 338,932 20.0% 1,273,410 75.3% 21,667 1.3% 58,001 3.4% 1,692,030

(3.85%) (1.57%) (33.60%) (25.28%)

1.7% (1.53%) -5.2% 17.0%

Highlights

• PMIE & Bulk sales continue to shrink – now contributing only 4% of total.

Category Analysis : Category Analysis : Weekly NewspapersWeekly Newspapers

Total

Annual %% of Total

Annual %% of Total Annual %

Subscriptions Copy Sales

18.5% 2.6% 2.8%

31,303 5.4% 551,652 96.0% 574,660

2008 26,423 4.7% 537,834 96.2% 558,905

P/Yr (10.3%)

2007 26,350 4.2% 601,468 96.5% 623,110

0.3% (10.6%)

18.5% 2.6%

Highlights

• Category up 2.8% which reverses the 8% decline in the prior quarter.• Growth seen in subscriptions.

Category Analysis : Category Analysis : Weekend NewspapersWeekend Newspapers

Total

Annual %% of Total Annual %

% of Total Annual %

% of Total Annual %

% of Total Annual %

(1.2%) 17.0%

P M I E Subscriptions Copy Sales Bulk Sales

-26.4%1.2% (2.01%)

468,662 20.0% 1,805,327 76.9% 52,888 2.3% 85,632 3.6% 2,348,356

2008 462,976 19.3% 1,827,665 76.3% 45,202 1.9% 116,271 4.9% 2,396,431

P/Yr 1.4%

2007 452,269 19.1% 1,748,233 74.0% 32,725 1.4% 129,986 5.5% 2,363,213

(1.2%) 17.0% -26.4%

2.4% 4.5% 38.1% -10.6%

1.2%

Highlights

• Category down -2.0%. • Sharp decrease in PMIE (-26%) now in-part swopped into Bulk +17%.

MagazineMagazineQuarterly TrendsQuarterly Trends

5,5

31,6

80

5,0

21,2

40

5,6

13,0

15

5,2

18,6

87

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

Consumer Custom

2009 2008

1,2

23,2

04

62

3,5

83

2,2

55

,52

4

75

7,6

89

-

300,000

600,000

900,000

1,200,000

1,500,000

1,800,000

2,100,000

B2B Free

2009 2008

Highlights

• All categories of magazine circulation are down.• Greatest decline evident in “Free” due to rationalised titles. • Consumer category continues to decline @ approx 3%.• B2B category decline (-18%) driven by tightening “free” circulation.

Category Analysis :Category Analysis :Consumer MagazinesConsumer Magazines

Grand Total

Annual % % of Paid Annual % % of Paid Annual % % of Paid Annual % % of Total Annual % % of Total Annual %

Subscriptions Copy Sales Total PaidOther Paid Total Free

(5.1%)(12.7%) 38.2%21.5% (5.7%) (3.8%)

583,532 12.4% 4,024,169 85.6% 90,932 1.9% 4,698,633 93.6% 322,607 6.4% 5,021,240

2008 668,115 13.4% 4,242,234 85.1% 74,864 1.5% 4,985,213 95.5% 233,474 4.5% 5,218,687

P/Yr 12.0%

2007 584,151 13.0% 3,803,448 84.8% 98,275 2.2% 4,485,874 96.3% 173,255 3.7% 4,659,129

(5.1%)

11.1%

(12.7%)

14.4%

38.2%

34.8%11.5%

21.5%

(23.8%)

(5.7%)

Highlights

• Although only down only -3.8% we note significant increases in back issue sales (other paid). • Sadly subscriptions down markedly. •1/3rd of free circulation is attributed to back issue distribution..

Category Analysis :Category Analysis :Business 2 BusinessBusiness 2 Business

Grand Total

Annual % % of Total Annual % % of Free

Annual % % of Free

Annual % % of Free

Annual % % of Total Annual %

Non Requested Other Free Total FreeTotal Paid Requested

-80.3% -19%-10.4% -13.6% 4.6% -17.7%

92,666 14.9% 111,023 20.9% 389,686 73.4% 30,208 4.8% 530,917 85.1% 623,583

2008 103,405 13.6% 128,489 19.6% 372,667 57.0% 153,128 20.2% 654,284 86.4% 757,689

P/Yr -0.8%

2007 112,388 14.7% 105,038 16.1% 373,087 57.3% 172,998 26.6% 651,123 85.3% 763,511

-11.5%

-80.3% -19%-10.4% -13.6% 4.6%

-8.0% 22.3% -0.1% 0.5%

Highlights

• Economic forces affecting both the Total Paid and Requested circulation.• Promotional copy distribution has been reduced dramatically.

Category Analysis :Category Analysis :Custom MagazinesCustom Magazines

Grand Total

Annual % % of Total Annual % % of Free

Annual % % of Free

Annual % % of Free

Annual % % of Total Annual %

Other Free Total FreeTotal Paid Requested Non Requested

145.0% -1%-28.1% 5.4% -5.8% -1.4%

93,541 1.7% 2,499,237 46.0% 2,927,933 53.8% 10,969 0.2% 5,438,139 98.3% 5,531,680

2008 130,017 2.3% 2,370,248 43.2% 3,108,273 56.7% 4,477 0.1% 5,482,998 97.7% 5,613,015

P/Yr 13.8%

2007 31,352 0.6% 983,575 20.1% 3,796,203 77.5% 120,292 2.5% 4,900,070 99.4% 4,931,422

145.0% -1%

314.7% 141.0% -18.1% -96.3% 11.9%

-28.1% 5.4% -5.8%

Highlights

• Static category delivery @-1.4%• Equal movement from non requested into requested, 5% either way.• Total paid, although small is down 28%.

Conclusion

Local print market appears to have weathered the storm better than many other markets. Interesting learnings can be found in Australia and possibly elsewhere in the World.

Across all categories we still note a level of decline and self inflicted reductions, ie PMIE, Bulk and free distribution are more tightly controlled. There are exceptions however but these will be seen in the data itself.

Predictions made during the Q4 2008 presentation have come to pass although better than expected in some cases.