1. 2010 Report 62 - 4 th Quarter Release - Cape Town 24 February 2011

2. Introduction: International Up-date: International Up-date: Digital Newspaper For Apple Ipad Called “The Daily” Media baron Rupert Murdoch has launched the next generation digital newspaper for iPad tablet computer, called “The Daily”.Media baron Rupert Murdoch has launched the next generation digital newspaper for iPad tablet computer, called “The Daily”. The Daily, a news operation created from scratch and designed specifically for the iPad, would herald a new journalism for new times, Murdoch said.The Daily, a news operation created from scratch and designed specifically for the iPad, would herald a new journalism for new times, Murdoch said. It would combine the “serendipity and surprise” of newspapers with the speed and versatility of new technology, he was quoted as saying. It would make news-gathering “viable again”.It would combine the “serendipity and surprise” of newspapers with the speed and versatility of new technology, he was quoted as saying. It would make news-gathering “viable again”. Describing his new venture as the digital renaissance, he said, with the Daily, there would be “no paper, no multimillion-dollar presses, no trucks”. That in turn, gave its editors the licence to experiment and innovate.Describing his new venture as the digital renaissance, he said, with the Daily, there would be “no paper, no multimillion-dollar presses, no trucks”. That in turn, gave its editors the licence to experiment and innovate.

3. A look at the ramifications of the new iPad-only newspaper A look at the ramifications of the new iPad-only newspaper (Source: Mark Challinor ) A look at the ramifications of the new iPad-only newspaper The Daily shows off the power and interactivity The Daily shows off the power and interactivity and it does so very cheaply to the consumer. and it does so very cheaply to the consumer. It feels more like a magazine than a newspaper It feels more like a magazine than a newspaper and the amount of “actual news” seems limited and the amount of “actual news” seems limited (see CNN, New York Times ). (see CNN, New York Times ). Targeting currently seem confused although this will no doubt change. Targeting currently seem confused although this will no doubt change. To be profitable 10% of US ipad users would have to subscribe! To be profitable 10% of US ipad users would have to subscribe! What's particularly interesting is the subscription model, ie the automatic renewal and a request to the user to allow the publisher to contact with further info. Could this be a model for the future? Watch this space... What's particularly interesting is the subscription model, ie the automatic renewal and a request to the user to allow the publisher to contact with further info. Could this be a model for the future? Watch this space...

4. US Digital Newspaper Statistics. Newspaper Websites Reach Nearly Two-Thirds of All Internet Users in Fourth QuarterNewspaper Websites Reach Nearly Two-Thirds of All Internet Users in Fourth Quarter Newspaper websites drew an average monthly audience of 105.3 million unique visitors or nearly two-thirds (62 percent) of all adult Internet users.Newspaper websites drew an average monthly audience of 105.3 million unique visitors or nearly two-thirds (62 percent) of all adult Internet users. The analysis, by research company “comScore” shows newspaper websites continue to attract key demographics, reaching 58 percent of 25-to-34-year- olds and 73 percent of individuals in households earning more than $100,000 a year on average throughout the quarter.The analysis, by research company “comScore” shows newspaper websites continue to attract key demographics, reaching 58 percent of 25-to-34-year- olds and 73 percent of individuals in households earning more than $100,000 a year on average throughout the quarter.

5. Rule Amendments effective 1st January 2011: 1. Creation of a new sector – ‘Advertising Brochures’. 2. Change to the definition of a Newspaper: ‘A publication published on a regular basis, consisting of a minimum of 8 pages, and with a minimum of 35% editorial content over a reporting period’. 3. For combined issues, data must be submitted for the period in which the sales are concluded, i.e. a combined December/January issue must be submitted for the January to March quarter, not the October to December quarter. 4. Monies paid to cover postage for free titles do not constitute a subscription.

6. Membership Statistics: 31 December 2009AdmissionsRemovals31 December 2010 Magazines 465 76 -34 507 Consumer 200 32 -17 215 Business to Business 166 13 -5 174 Custom 78 30 -5 103 Free Magazines 21 1 -7 15 Newspapers 303 20 -10 313 Daily 26 - - Weekly 12 1 - 13 Weekend 27 - - Community 64 - -2 62 Hybrid 2 3 - 5 Free Newspapers 172 16 -8 180 Advertising Brochures - 8 - 8 Total ABC Members 768 104 -44 828

7. SECTOR SIZE RANKED BY AVERAGE CIRCULATION – Quarter 4 2010: POSITIONMOVESECTORCIRCULATION NUMBER OF PUBLICATIONSAVERAGE 1-Custom Magazines13,605,931103132,096 2^Consumer Magazines6,938,27621532,271 3vFree Newspapers5,492,09118030,512 4-Advertising Brochures3,209,8068401,226 5-Weekend Newspapers2,474,9662791,665 6vFree Magazines1,884,36715125,624 7vDaily Newspapers1,771,8472668,148 8vB2B Magazines1,169,4951746,721 9vWeekly Newspapers677,6961352,130 10vCommunity Press478,668627,720 11vHybrid Newspapers169,763533,953 TOTAL37,872,90682845,740

8. New Approach for 2010 a) Track Print performance against GDP and Retail Sales b) Trend Analysis: YOY c) Compare Category Circulation Composition YOY Large & Growing Small & declining d) Scatter graph Evolutionary, familiar but better: Evolutionary, familiar but better: Recognizes state of economy / retail sales.Recognizes state of economy / retail sales. 4 year category trends.4 year category trends. YOY category composition comparison – to see where the shifts are coming from.YOY category composition comparison – to see where the shifts are coming from. Familiar scatter graph – but with defining titles.Familiar scatter graph – but with defining titles.

9. Overall Economic Perspective Comment: Comment: Real GDP increased by 2.6% during Q3 compared with 2.8% for Q2. The main contributors were mining and quarrying, wholesale and retail trade, and the accommodation industry. Real GDP increased by 2.6% during Q3 compared with 2.8% for Q2. The main contributors were mining and quarrying, wholesale and retail trade, and the accommodation industry. January – November retail sales increased by 6.7% over 2009. The highest increase was in ‘retailers in household furniture, appliances and equipment’. January – November retail sales increased by 6.7% over 2009. The highest increase was in ‘retailers in household furniture, appliances and equipment’.

10. Newspaper Performance Relative to Economic Measures. Comment: Comment: Total newspaper circulation has increased by 178 000 copies quarter on quarter, mainly in the free newspaper category. Total newspaper circulation has increased by 178 000 copies quarter on quarter, mainly in the free newspaper category.

11. Trend Analysis – Total Circulation: Daily Newspapers Comment: Comment: 120 000 fewer copies sold than in Q4 2009, representing a decline of 7.7%, a slight improvement on Q3 performance. 120 000 fewer copies sold than in Q4 2009, representing a decline of 7.7%, a slight improvement on Q3 performance.

12. Q.4 – Composition Comparison: Daily Newspapers Comment: Comment: PMIE continues to decline. PMIE continues to decline. Copy sales(-8.4%) and subscriptions (-5.1%) both declined. Copy sales(-8.4%) and subscriptions (-5.1%) both declined. The Sowetan is the only newspaper reflecting sales below 50% of the cover price. The Sowetan is the only newspaper reflecting sales below 50% of the cover price.

13. Trend Analysis – by language: Daily Newspapers Comment: Comment: Overall sharp decline in English titles, whilst Afrikaans and vernacular titles remain stable. Overall sharp decline in English titles, whilst Afrikaans and vernacular titles remain stable.

14. Daily Newspapers ranked by Copy Sales: Comment: Comment: 13 titles declined, whilst 1 increased and 5 remained static. 13 titles declined, whilst 1 increased and 5 remained static. Although reflecting a decline, Daily Sun is 3½ times larger than its nearest competitor. Although reflecting a decline, Daily Sun is 3½ times larger than its nearest competitor. RankingPublication Name Copy Sales >50% - 2010 % Change on Prior Year 1Daily Sun414,192-15.81% 2Son (Daily)115,101-7.60% 3Isolezwe99,711-3.44% 4Sowetan93,503-2.61% 5Star, The64,406-6.97% 6Citizen, The (Daily)50,23519.27%

15. Q.4 – Year on Year Analysis: Daily Newspapers Comment: Comment: The Citizen grew by 11.8%, resulting from a pricing strategy. The Citizen grew by 11.8%, resulting from a pricing strategy. Cape Argus and Daily Sun declined by more than 15%, the former reducing both PMIE and 3 rd Party Bulk. Cape Argus and Daily Sun declined by more than 15%, the former reducing both PMIE and 3 rd Party Bulk.

16. Trend Analysis – Total Circulation: Weekly Newspapers Comment: Comment: Total circulation reflects a dramatic turnaround, with a real increase of 14% compared to a decline of 5.7% for Q3. Total circulation reflects a dramatic turnaround, with a real increase of 14% compared to a decline of 5.7% for Q3.

17. Q.4 – Composition Comparison: Weekly Newspapers Comment: Comment: Copy sales increased by 13.3%, although subscriptions fell by 2%. Copy sales increased by 13.3%, although subscriptions fell by 2%.

18. Weekly Newspapers ranked by Copy Sales: Comment: Comment: The 3 largest titles all reflected significant growth, the main contributor to the overall increase in circulation. The 3 largest titles all reflected significant growth, the main contributor to the overall increase in circulation. RankingPublication Name Copy Sales >50% 2010 % Change on Prior Year 1 Soccer Laduma313,458 15.82% 2 Ilanga125,801 25.76% 3 Mail & Guardian38,209 11.14%

19. Q.4 – Year on Year Analysis: Weekly Newspapers Comment: Comment: UmAfrika was the only title to reflect a decline (-22%). UmAfrika was the only title to reflect a decline (-22%).

20. Trend Analysis – Total Circulation: Weekend Newspapers Comment: Comment: Circulation declined by 2.3%, an improvement on the previous quarter’s decline of 3.9%. Circulation declined by 2.3%, an improvement on the previous quarter’s decline of 3.9%. 6 titles increased, 6 remained static, whilst 11 declined. 6 titles increased, 6 remained static, whilst 11 declined.

21. Q.4 – Composition: Weekend Newspapers Comment: Comment: Lower PMIE and 3 rd Party Bulk contributed to the decline. Lower PMIE and 3 rd Party Bulk contributed to the decline. Whilst Copy Sales remained static, subscriptions declined by 4.7%. Whilst Copy Sales remained static, subscriptions declined by 4.7%.

22. Trend Analysis – by language: Weekend Newspapers Comment: Comment: English titles fared worse than Afrikaans and Vernacular titles. English titles fared worse than Afrikaans and Vernacular titles.

23. Weekend Newspapers ranked by Copy Sales: Comment: Comment: Only Sunday Sun reflected solid growth. Only Sunday Sun reflected solid growth. A further 11 titles showed growth in Copy Sales. A further 11 titles showed growth in Copy Sales. RankingPublication Name Copy Sales >50% - 2010 % Change on Prior Year 1Sunday Times248,047-6.93% 2Sunday Sun226,6194.64% 3Rapport222,504-10.20% 4City Press151,138-3.92% 5Sunday World132,378-3.14% 6Ilanga Langesonto88,4332.74%

24. Q.4 – Year on Year Analysis: Weekend Newspapers Comment: Comment: Sondag grew by 64% (all in Copy Sales!), whilst Isolezwe ngeSonto grew by a creditable 25%. Sondag grew by 64% (all in Copy Sales!), whilst Isolezwe ngeSonto grew by a creditable 25%.

25. Trend Analysis – Total Circulation: Community Newspapers Comment: Comment: Stable performance with static real growth. Stable performance with static real growth.

26. Trend Analysis – Total Circulation: Free Newspapers Comment: Comment: Real circulation declined by 1%. Real circulation declined by 1%.

27. Q.4 – Composition Comparison: Hybrid Newspapers Comment: Comment: Included for the first time due to significant growth in paid for circulation…driven by a remarkable performance by the Times newspaper – in particular copy sales. The lower cover price strategy clearly showing great results.Included for the first time due to significant growth in paid for circulation…driven by a remarkable performance by the Times newspaper – in particular copy sales. The lower cover price strategy clearly showing great results.

28. Magazine Performance Relative to Economic Measures. Comment: Comment: Total magazines grew by 10.7% over Q4 2009, mainly the result of new entrants and some real growth. Total magazines grew by 10.7% over Q4 2009, mainly the result of new entrants and some real growth. Consumer magazines increased by 5.5% compared to Q3. Consumer magazines increased by 5.5% compared to Q3.

29. Trend Analysis – Total Circulation: Consumer Magazines Comment: Comment: Whilst total circulation showed an increase because of new entrants, encouragingly real circulation showed an increase year on year. Whilst total circulation showed an increase because of new entrants, encouragingly real circulation showed an increase year on year.

30. Q.4 – Composition: Consumer Magazines Comment: Comment: Whilst Copy sales increased by a creditable 7.1% (helped by new entrants), subscriptions declined by a disappointing 9%. Free circulation increased by 11.6%. Whilst Copy sales increased by a creditable 7.1% (helped by new entrants), subscriptions declined by a disappointing 9%. Free circulation increased by 11.6%. 24 titles reported sales below 50% of cover price, up from 13 the previous quarter. 24 titles reported sales below 50% of cover price, up from 13 the previous quarter.

31. Q.4 – Year on Year Analysis Comment: Comment: Category remains stable (Zero growth). Category remains stable (Zero growth). Bona (+21.7%), LIG (+11.4%) and Drum (+9%) continue to perform well. Bona (+21.7%), LIG (+11.4%) and Drum (+9%) continue to perform well. Reader’s Digest continues to decline (-18.7%). Reader’s Digest continues to decline (-18.7%).

32. Q.4 – Circulation Composition: Comment: Comment: Copy Sales increased by 1.4%, whilst subscriptions declined by 7.9%. Copy Sales increased by 1.4%, whilst subscriptions declined by 7.9%.

33. Q.4 – Year on Year Analysis Comment: Comment: Home orientated titles continue to perform well – SA Garden & Home (+15.6%), SA Home Owner (+13.9%). Tuis/Home (+13.1%) and Food & Home Entertaining (+9.5%) all showed significant growth. Home orientated titles continue to perform well – SA Garden & Home (+15.6%), SA Home Owner (+13.9%). Tuis/Home (+13.1%) and Food & Home Entertaining (+9.5%) all showed significant growth. Top billing declined by 42%. Top billing declined by 42%.

34. Q.4 – Circulation Composition: Comment: Comment: Copy Sales increased by 30%, mainly from new entrants, whilst subscriptions declined by 12%. Copy Sales increased by 30%, mainly from new entrants, whilst subscriptions declined by 12%. Free circulation declined by 7%. Free circulation declined by 7%.

35. Q.4 – Year on Year Analysis Comment: Comment: This category shows very little growth (+1.7%). This category shows very little growth (+1.7%). Super Bike (+30.5%), Leisure Wheels (+25.5%) and Car (10.7%) showed the largest increases. Super Bike (+30.5%), Leisure Wheels (+25.5%) and Car (10.7%) showed the largest increases. Auto Trader (-13.8%) and Topcar (-13.7%) showed the largest declines. Auto Trader (-13.8%) and Topcar (-13.7%) showed the largest declines.

36. Q.4 – Circulation Composition: Comment: Comment: Copy sales increased by 13.8%, mainly the result of new members. Copy sales increased by 13.8%, mainly the result of new members.

37. Q.4 – Year on Year Analysis Comment: Comment: Free regional Child titles continue to grow rapidly. Free regional Child titles continue to grow rapidly. Living & Loving reflected the largest decline (-24.5%) Living & Loving reflected the largest decline (-24.5%) Expectant Mothers Guide reflected 33% of its circulation below 50% of cover price. Expectant Mothers Guide reflected 33% of its circulation below 50% of cover price.

38. Q.4 – Circulation Composition: Comment: Comment: Both Copy Sales and subscriptions have declined. Both Copy Sales and subscriptions have declined.

39. Q.4 – Year on Year Analysis Comment: Comment: This category remains static (+1%). This category remains static (+1%). Amakhosi (+35%) and Fitness Magazine (+26%) showed the highest increases. Amakhosi (+35%) and Fitness Magazine (+26%) showed the highest increases. Submerge (-27.6%) and Go Multi (-14.5%) showed the largest declines. Submerge (-27.6%) and Go Multi (-14.5%) showed the largest declines.

40. Q.4 – Circulation Composition: Comment: Comment: Unfortunately, subscriptions declined by 14%. Unfortunately, subscriptions declined by 14%. Encouragingly, free circulation fell by 3.5%. Encouragingly, free circulation fell by 3.5%.

41. Q.4 – Year on Year Analysis Comment: Comment: Category is down 2%. Category is down 2%. Time Out weekend Breaks (+14.7%) and Getaway (+12.5%) reflected the largest increases. Time Out weekend Breaks (+14.7%) and Getaway (+12.5%) reflected the largest increases. National Geographic Traveller (-15.3%) and Wegsleep (-12.4%) recorded the highest declines. National Geographic Traveller (-15.3%) and Wegsleep (-12.4%) recorded the highest declines.

42. Q.4 – Circulation Composition: Comment: Comment: Copy sales increased significantly, mainly the result of new members. Copy sales increased significantly, mainly the result of new members.

43. Q.4 – Year on Year Analysis Comment: Comment: Category increased by a creditable 5.6%. Category increased by a creditable 5.6%. Kuier (+121.9%, all copy sales!), Rooi Rose (+21.8) and Marie Claire (+19.2%) showed the highest increases. Kuier (+121.9%, all copy sales!), Rooi Rose (+21.8) and Marie Claire (+19.2%) showed the highest increases. O, the Oprah Magazine (-20.3%) and Psychologies (-16.3%) showed the largest declines. O, the Oprah Magazine (-20.3%) and Psychologies (-16.3%) showed the largest declines.

44. Q.4 – Circulation Composition: Comment: Comment: Copy sales increased by 3.4 % and subscriptions by 7.5%. Copy sales increased by 3.4 % and subscriptions by 7.5%. 3 rd Party Bulk increased by 70%, albeit off a small base. 3 rd Party Bulk increased by 70%, albeit off a small base.

45. Trend Analysis – Total Circulation: B2B Magazines Comment: Comment: Total circulation increased by 1%, whilst real circulation declined by 0.7%, an improvement over the previous quarter. Total circulation increased by 1%, whilst real circulation declined by 0.7%, an improvement over the previous quarter.

46. Q.4 – Circulation Composition: B2B Magazines Comment: Comment: Paid circulation fell by 8%, whilst Bulk distribution declined by 15%. Paid circulation fell by 8%, whilst Bulk distribution declined by 15%. Encouragingly, Individual distribution is up by 8%. Encouragingly, Individual distribution is up by 8%.

47. Q.4 – Year on Year Analysis Comment: Comment: Category dropped by 26%. Category dropped by 26%. Southern African Tourism Update increased by 21.8%, whilst Butler (-89%) and Conference Venues (-50%) reflected the largest declines. Southern African Tourism Update increased by 21.8%, whilst Butler (-89%) and Conference Venues (-50%) reflected the largest declines.

48. Q.4 – Composition: Comment: Comment: All categories of circulation declined. All categories of circulation declined.

49. Q.4 – Year on Year Analysis Comment: Comment: Resource (+24%), an annually reporting title, showed the largest increase. Resource (+24%), an annually reporting title, showed the largest increase. Metering International (-20.4%) and Sustain (-24.5%) recorded the highest declines. Metering International (-20.4%) and Sustain (-24.5%) recorded the highest declines.

50. Q.4 – Composition: Comment: Comment: Individual distribution showed significant increase because of new members. Individual distribution showed significant increase because of new members.

51. Q.4 – Year on Year Analysis Comment: Comment: HR Future grew 377% (off the chart), all from free digital circulation. HR Future grew 377% (off the chart), all from free digital circulation. Black Business Quarterly grew by 23.3%, whilst Enterprise Risk (-34%),Profiles Stock Exchange (-25%) and Business Brief (-22%) recorded the largest declines. Black Business Quarterly grew by 23.3%, whilst Enterprise Risk (-34%),Profiles Stock Exchange (-25%) and Business Brief (-22%) recorded the largest declines.

52. Q.4 – Composition: Comment: Comment: Bulk distribution declined significantly because a large title ceased publishing. Bulk distribution declined significantly because a large title ceased publishing.

53. Q.4 – Year on Year Analysis Comment: Comment: The Category has declined by 5.9%. The Category has declined by 5.9%. The International Convenience Store Retailer increased by 11%, whilst Traders Friend declined by 39%. The International Convenience Store Retailer increased by 11%, whilst Traders Friend declined by 39%.

54. Trend Analysis – Total Circulation: Custom Magazines Comment: Comment: Total circulation reflects 2 large TV titles. Total circulation reflects 2 large TV titles. Real circulation increased by 3.8%. Real circulation increased by 3.8%.

55. Q.4 – Composition: Custom Magazines Comment: Comment: Total paid circulation is up as a result of the two previously mentioned titles. Total paid circulation is up as a result of the two previously mentioned titles.

56. Q.4 – Year on Year Analysis Comment: Comment: Total category increased by 4%. Total category increased by 4%. All dish titles increased circulation, whilst M and Magic declined. All dish titles increased circulation, whilst M and Magic declined.

57. Q.4 – Circulation Composition: Comments: Comments: Individual distribution increased by 66%. Individual distribution increased by 66%.

58. Q.4 – Year on Year Analysis Comment: Comment: Category declined by 1.5%. Category declined by 1.5%. Mitsubishi Xplore (+30.5%) and Road to London (+12%) reflected the largest increases. Mitsubishi Xplore (+30.5%) and Road to London (+12%) reflected the largest increases. Vision Magazine (-31.3%) and Private Edition (-20%) recorded the highest losses. Vision Magazine (-31.3%) and Private Edition (-20%) recorded the highest losses.

59. Q.4 – Year on Year Analysis Comment: Comment: Club X (+218%), Foschini Sports (+65%) and Super Club for Kids (+45%) continue growing and growing! Club X (+218%), Foschini Sports (+65%) and Super Club for Kids (+45%) continue growing and growing!

60. Trend Analysis – Total Circulation: Free Magazines Comment: Comment: Circulation has remained static. Circulation has remained static. Only Get It (Northern KZN) has shown significant growth (+11%). Only Get It (Northern KZN) has shown significant growth (+11%).

61. Overall Conclusion: In recent days we’ve heard that consumers will generally be poorer during 2011 than in 2010 as salary adjustments fall well behind inflation. This will increase the pressure on print circulation results. That said, we’re seeing clearer signs of recovery. From an ABC membership perspective we note a net gain of 28 members during Q4 2010, increasing total membership to 828.(37 new members and 9 resignations/terminations) The bulk of the new members during Q4 (81%) were magazines – equally drawn from both consumer and custom categories. The magazine category certainly seems to have turned the economic corner so to speak…but the same cannot be said for newspapers and in particular Daily Newspapers.

62. Daily Newspapers: The slide in daily newspaper sales continue and indeed appears to be increasing as cost cutting exercises in terms of reducing deal driven distribution have intensified. The actual copy sale shifts should be therefore viewed as real indicators. The reduced cover price strategy adopted by several titles continue to generate growth. Weekly Newspapers: In contrast, this category has shown strong growth and driven by core circulation – mainly copy sales. In particular, the Zulu language title which deserves special mention. Weekend Newspapers: The decline noted over previous presentations continues to slow with core circulation stabilising, and reduced deal driven distribution.

63. Magazines: As already mentioned we see continued clear signs of recovery both in the number of new entrants as well as within existing titles. In the consumer magazine category we see greater reliance on single copy sales as subscriptions come under increased pressure. Generally, vernacular titles are fairing better than other language titles – which mirror trends in the newspaper categories. The improved performance within this category, however, is beginning to reveal a return by certain titles to deal driven circulation to enhance their apparent size / popularity. Care should be taken to identify these titles before accepting rate adjustments based on their “growth”. In conclusion, yes there are signs of recovery but the consumer remains cash strapped and will do so into 2011. Strategies that address affordability – without limiting consumer flexibility, will continue to produce solid results.

64. Thank you.

65. Your ABC - Transparency you can see -