Media and Digital Platforms Market Inquiry

Transcript:Media and Digital Platforms Market Inquiry:
Media and Digital Platforms Market Inquiry Provisional Report Launch 24 February 2025 Scope and Background - MDPMI The Competition Commission launched the Media and Digital Platforms Market Inquiry following severe financial strain in the media sector due to digitalisation of news consumption. The Inquiry determined whether this shift and conduct by search and social media platforms that compete for digital advertising and play an intermediary role may be exacerbating the difficulties faced by the news media. The Inquiry examined: The role of search and social media platforms in digital advertising and news distribution. The impact of AI Chatbots and AI-powered search on news media. The AdTech industry and its effect on monetization for news publishers The Constitutional & Competitive Implications The media plays a crucial role in upholding the Constitutional Right to Freedom of Expression. Digital platforms do not create content but profit from news, potentially harming media sustainability. Section 39(2) of the Constitution requires competition law to promote the Bill of Rights, prioritizing a strong, independent media. This Inquiry also considered the role of the public broadcaster in media diversity and plurality. The Inquiry Process The News Media Sector The news media plays a crucial role in upholding freedom of expression and democracy. However, it faces financial challenges due to a decline in traditional advertising revenue. The Inquiry explored the impact of digital platforms, AI, and social media on news media and proposes possible solutions The Shift to Online News Consumption 87% of South Africans get their news online, mostly via mobile phones. Social media and search engines have become primary news sources. News videos are preferred by young demographics over text, mostly consumed on social platforms. Traditional ad revenue for print media declined by 40%; SABC ad revenue dropped by 47%. Declining Revenue & Impact on AI on Journalism Digital ad revenue cannot fully compensate for losses. Shrinking newsrooms: Journalism jobs have halved. Increased casualization of journalists. Many community and regional newspapers have shut down. AI Chatbots pose a new threat to news media by reducing referral traffic and capturing content value on their platforms. Digital platforms increase costs for news media by demanding platform-specific content formats, constant algorithm optimisation, and misinformation management. Many news organisations have turned to non-advertising revenue (subscriptions, donations, content licensing, and events), but subscriptions are not viable for most South Africans, limiting access to news. The advertising revenue decline threatens media diversity and