REPORT nd Quarter Release

AGENDA 1.Setting the Scene 2.SA Print Dashboard 3.Press Dashboard 4.Magazine Dashboard 5.Conclusion

1. SETTING THE SCENE Observations: UK: Broadsheet circulation appears to have stabilized after a decade of declines. Most tabloids show double digit declines. Newspaper Website performance growing. Times remains the only growing title. SA: Increased focus on fixed issue margins could affect print orders. Could it be that the answer to growing circulation is simply to start selling advertisements ? Observations: UK: Broadsheet circulation appears to have stabilized after a decade of declines. Most tabloids show double digit declines. Newspaper Website performance growing. Times remains the only growing title. SA: Increased focus on fixed issue margins could affect print orders. Could it be that the answer to growing circulation is simply to start selling advertisements ? Economic Outlook Purchase Managers Index (PMI) fell to a one year low driven by low demand and higher than expected labour costs. Unemployment now at 34.9% of which 2/3 are youth. Electricity and water supply issues gaining more consumer attention and causing concern. Export market performance under pressure with declining demand for mining ore. Economic Outlook Purchase Managers Index (PMI) fell to a one year low driven by low demand and higher than expected labour costs. Unemployment now at 34.9% of which 2/3 are youth. Electricity and water supply issues gaining more consumer attention and causing concern. Export market performance under pressure with declining demand for mining ore. Synopsis Circulations around the world remain under pressure. Development of digital following remains inconsistent, although improving. More realization by publishers that migration is no longer the ultimate goal …print and digital are complimentary. Print financials remain under pressure….but some titles are still growing. Synopsis Circulations around the world remain under pressure. Development of digital following remains inconsistent, although improving. More realization by publishers that migration is no longer the ultimate goal …print and digital are complimentary. Print financials remain under pressure….but some titles are still growing.

MEMBERSHIP STATISTICS ABC Members: 31 Dec 14: Jun 15: Titles -8 Titles Titles -30 Titles

2. SA PRINT DASHBOARD Magazine Comments: 8.3% decline in total magazine circulation Q2 0n Q1 Similar composition to press, i.e. driven by free copies. Subscriptions predictably more than press. Press Comments: 1.7% decline in total press circulation Q2 on Q1 Losses across the board except for free newspapers Free circulation represents the largest segment at 63%

3. PRESS DASHBOARD Daily Newspapers Q2 declined by 4.3% over Q1 Whilst Single copy sales have declined, subscriptions have increased slightly Q2 PMIE almost double Q1 % Composition Weekly Newspapers Q2 declined by 6.6% compared to Q1 Decline occurred in single copy sales

3. PRESS DASHBOARD (cont.) Weekend Newspapers: Q2 declined by 4.6% compared to Q1 Declines in both single copy sales and subscriptions Free Newspapers Q2 stable compared to Q1 Local Newspapers Q2 down 5.8% on Q1 98% of circulation derived from single copy sales. % Composition

DAILY PRESS: MOVERS COMMENTS: The Herald was the only newspaper to show an increase (1%) Sowetan recorded a 5% decline, Daily Sun 9% decline, and Business Day 5% decline, all in single copy sales

WEEKLY PRESS: MOVERS COMMENTS: The Post declined by 4.8% compared to Q1, Soccer Laduma declined by 6.3% and Ilanga declined by 12%, all in single copy sales.

WEEKEND PRESS: MOVERS COMMENTS: Independent on Saturday increased by 2.3%, and Isoleswe ngeSonto by 0.8%,Q2 on Q1 Sunday Sun declined by 9.7%, and Ilanga Langesonto by 9%, all in Single Copy Sales. Sunday Times declined by 6.5%, both in Subscriptions and Single Copy Sales.

LOCAL PRESS: MOVERS COMMENTS: Capricorn Voice reflected an increase of 11% over Q1, and a remarkable increase of 45% over Q South Coast Herald increased by 2,6% on Q1 District Mail and Rustenburg Herald declined by 12.5% and 11.5% respectively.

FREE PRESS: MOVERS COMMENTS: Msunduzi News increased by 66.7%! Lesiding News, Kasi Vision Zwelethemba, and Go & Express show considerable increases over Q1.

4. MAGAZINE DASHBOARD COMMENTS: Total Magazine circulation down 8.3% Q2 on Q1. All 3 sectors declined compared to Q1: Consumer declined by 5%, Business to Business by 6.7%, and Custom by 11%.

MAGAZINE: % COMPOSITION COMMENTS: Consumer Magazines: Single Copy Sales and Subscriptions declined, while PDF Replica copies increased, albeit off a small base Custom Magazines: The category decline is largely as a result in a reduction in free copy distribution. Business to Business: The composition continues to rely heavily on free distribution. Numerically it is pleasing to see growth in Single Copy Sales and Subscriptions.

MAGAZINES: MOVERS COMMENTS: Sarie reflected an increase of 9.6%, mainly in Single Copy Sales The other increases are mainly the result of increases in PDF Replica copies.

CONSUMER MAGAZINES - HOME COMMENTS: An increase of 3.9% Q2 over Q1, with Single Copy Sales increasing. Food and Home Entertaining increased by 7.1% and S A Garden and Home by 8.1%. Green Home increased by 58%, all from increased free circulation.

CONSUMER MAGAZINES - MOTORING COMMENTS: Circulation continues to decline – 9.7% drop Q2 on Q1 Driven increased by 42%, all in free circulation. Auto Week increased by 15.5%, all in Single Copy Sales. Drive Out/Weg Ry declined by 21.8%.

CONSUMER MAGAZINES – SPORT & HOBBY COMMENTS: The category increased marginally (1%). Fitness His Edition increased 19% (Single Copy Sales and Back issues) Modern Athlete increased by 27.6% (Bulk requested and PDF Replica) Amakhozi decreased by 14.6%.

CONSUMER MAGAZINES - TRAVEL COMMENTS: Overall the category declined by 14% Weg/Go platteland, an annual title, increased by 9.6%. However, Weg Kuierkos, also an annual title, declined by 22% Wegsleep declined by 14.6% Q2 over Q1, mainly in Single Copy Sales.

CONSUMER MAGAZINES – WOMEN’S GENERAL COMMENTS: The category declined by 6% Q2 over Q1 Sarie increased by 9.6% Most other titles showed declines, with Women’s Health declining 38%, Rooi Rose 18%, and Fair Lady 19%.

BUSINESS TO BUSINESS MAGAZINES – ARCHITECTURE COMMENTS: The category increased by 4.5% Q2 over Q1 Both titles increased significantly because of increased PDF replica editions.

BUSINESS TO BUSINESS MAGAZINES - MANAGEMENT COMMENTS: The Category declined by 10% Q2 over Q1 Sa’s Top Performing Companies, an annual title, increased by 39%. Public Sector Manager increased by 8%, Q2over Q1 Afripolitan, an annual title, increased by 11%

CUSTOM MAGAZINES - ENTERTAINMENT COMMENTS: The category continues to decline, falling by a further 13%. All titles continue to decline.

CUSTOM MAGAZINES – LEISURE COMMENTS: The category declined by 6% Q2 over Q1 However, Wild (annual) increased by 12%, Toyota Zone by 10%, although down on Q2 2014, and Private Edition (annual) by 10%.

CUSTOM MAGAZINES - RETAIL COMMENTS: The category declined by 11.3%, Q2 over Q1 Ackermans Club (+10%) and Edgars Club Magazine (13%) both increased, while Jet Club declined by 5%

5. Conclusion The economy remains distressed. While the forthcoming Rugby World Cup will hopefully raise spirits we expect this to be short lived ahead of the elections scheduled for early Despite a weak Rand our exports remain challenged due to poor productivity. While the Newspaper category has less churn than the magazine category, the Magazine results reflect more sporadic areas of growth. Daily Newspapers: we note that single copy sales are down offset by an increase in PMIE distribution. Weekend Newspapers: Single copy sales and subscriptions declined. Free Newspapers reflected an increase in bulk distribution. The devil remains in the detail. Publishing is a business and there can be little doubt that titles have done everything they can to improve their circulation, and now perhaps its time to refocus on income generation to grow circulation. Without returns it’s impossible to grow. Within the Magazine sector, it’s clear that the Custom category is now under pressure with sharp declines in free distribution. Business titles are showing growth in single copy sales which is promising. Within Consumer titles we see several titles producing solid growth (eg Sarie, Garden & Home etc)