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The demise of Sapa: the end of an era, with many unanswered questions Featured

Written by Gill Moodie

Gill Moodie raises the many unanswered questions related to the demise of the South African Press Agency (Sapa) and describes the three new ventures that will take its place.

The demise of Sapa was a long time coming but still, it took all in the media world by surprise.
After 76 years the independent not-for-profit Sapa announced in February this year that it could not find a way out of a long-running funding impasse and would shut up shop on March 31st. However, in fact as far back as last year (State of the Newsroom SA 2014 http://www.journalism.co.za/stateofnewsroom/) Sapa declared that it was in discussions about a new commercial model but this floundered when the Sapa board decided it could not credibly decide on its future because some of its members were among the bidders.
It was a surprise to the news organisations of South Africa because the signals sent out by the Sapa board in 2014 – during which new "investors" were sought – was that there was confidence that a solution could be found to the crisis that began when one of its four funding members, Times Media Group, pulled out in 2013.
However, underlying this was a widespread complacency about Sapa's place in the market: it had always been there; how could it not be in the future? And now that it's about to end, perhaps it is understandable for some to yearn for the certainty, and affordability, of Sapa.
That there are three new commercial news agencies emerging from three of the "Big Four" funding members of Sapa – Sekunjalo; leader of the consortium that owns Independent Newspapers; Media24; and Times Media – and competing for clients is certainly good for journalism in general but is it really all good for the clients?
Caxton – the last of the Big Four funding members but smallest financial contributor to Sapa – is unique among them in that it does not have a large online news portal in need of round-the-clock wire copy. It is likely that it will buy a wire service from one of the emerging agencies for its newspaper, The Citizen, but is known to be close to Independent on the Sapa board.
The big news last week was the demand that Sapa clients delete online Sapa content within a week of it shutting down. Beside the massive task of having to locate a years' worth of Sapa copy in one's digital archive, taking out past content will be a serious dampener on long-tail search traffic.
Is this a wily play by Sekunjalo, which has bought the Sapa archive, to net clients by offering a subscription deal that allows them to keep the past content? And why exactly is Media24's wire service offering its service free to digital? If Times Media is not beefing up its reporting staff immediately, is it going to be able to fill the Sapa gap effectively?
While it seems the wire copy from the three new players will be original content – and not aggregated – how much of their plans are being driven by bitter rivalry and score-settling? Is it likely that all three will survive in the market – served adequately by one for decades – and what if you back the wrong horse?
In summary, these are the choices for those in need of a wire service
• Sekunjalo's African News Agency (ANA) that aims to be an Africa-wide news and syndication network. It has announced partnerships with DPA, the German news agency, and the Chinese Xinhua agency as well as an agreement with Associated Press. It has hired a small staff complement so far and says it will operate separately Independent Newspapers. ANA's copy is being published on Independent's digital news portal, IOL, and in its newspapers such as The Star, Cape Times, The Mercury.
• Media24's News24Wire, which will be part of the News24 news portal but separate from the firm's newspapers (such as City Press, Die Burger, Beeld) and its Afrikaans online news portal, Netwerk24. It has hired 10 Sapa staff members to fill its 16 new newsroom positions. Copy will go first to News24, and is free to anyone for digital use (provided there are links back to News24) but for a subscription fee to print and broadcasters.
• Times Media's Rand Daily Mail News Wire (RDM News Wire), which will be an integral part of company's existing operations served by existing reporting staff. A handful of existing senior staff are to run RDM News initially while it is envisages more reporting staff will be hired at a later stage. Copy will go first to the TimesLIVE network and other sites such as the Rand Daily Mail as well as sold to outside clients. Existing staff members will write for both the wire service and print titles such as the Sunday Times, The Times and the Sowetan.

News24Wire and RDM News starts on April 1, the day after Sapa shuts down, while ANA is already in operation.
For both Times Media and Media24, the initial impetus for starting wire services was to serve their own web portals in Sapa's absence, they say, than to sell it commercially to outside clients.
Rand Daily Mail editor (and head of RDM News) Ray Hartley says: "We're trying to replace the [Sapa] service that is vital to us and there is the potential to sell it commercially.
"There is this idea that everybody pulled out of Sapa and now they're starting these new operations so it doesn't make sense," Hartley says. "Our web operations remained Sapa clients. There has always been a need for a by-the-minute reporting function from a wire service on the web. Our print titles, on the other hand, did not have the need for yesterday's stories. It's the nature of news these days. You've got to offer something more in print."
Both Hartley and Lisa MacLeod, GM of Media24 digital publishing, believe agency competition is good for journalism and media freedom in South Africa.
"The more original reporting that's out there, the more the government and companies are being held to account, so much the better," says MacLeod. "There is specific overlay, you can say, to why we are making our content free [to digital] – and that is to allow smaller publishers to have more time to produce original content and do original reporting. The more there is, the better."
"I think it's great," Hartley says. "You had one monolithic news service providing the same copy to all competitors' websites. And now you've got different competitive news services that are delivering different copy and are competing with each other. It's a far better outcome for news in my view. Let's not get too excited about how great Sapa was. It had many weaknesses. The copy was not flawless."
ANA CEO Chris Borain did not respond to requests for an interview but laid out his plans in this February interview with media website Grubstreet.
MacLeod says that before the idea of a wire service came about, News24 had already decided to build a national news team of its own to add to its staff of content producers.
"It's a change of direction for News24 heralded by the arrival of Andrew Trench as editor-in-chief from January 2015 (he was previously editor of The Witness newspaper). We had decided that we were interested in producing a lot more original quality content and we were planning in investing in that...The uptake on original work we've already done (e.g., the 2015 State of the Nation address) has been unbelievable."
Hartley believes that Sapa's demise was inevitable without radical change to its offering.
"They needed to work out where their new commercial base lay – which was clearly in online publishing – and cut their cloak to suit the cloth," he says. "All the media houses have made major adjustments in costs – how they're allocated and where they're allocated – to deal with the changing media environment. And the same needed to happen at Sapa."
Sapa's funding structure – as a not-for-profit independent operation funded by the Big Four – doomed it to failure as the media landscape became tighter and more competitive.
It was set up 76 years ago when newspapers reigned supreme and newspaper houses could afford to be generous.
The funding members paid far more than the subscribers – at the moment between R300 000 and R400 000, it was revealed when Independent stopped paying its fees earlier this year (though Caxton pays far less). This means big clients like the South African Broadcasting Corporation got the service at a discount while Grubstreet has reliably established that the smaller digital-only operations in South Africa pay as little as R2000-R3000 a month for the Sapa service.
With print circulation and ad revenue in general decline in South Africa and the search for sustainable online revenue still on, margins have become too squeezed for the Big Four to keep being so generous.
In essence, Sapa is the product of another time.

Gill Moodie is the publisher of Grubstreet
Disclosure: Moodie is married to Andrew Trench, editor-in-chief of News24.

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