Audit Bureau of Circulation “Health Check” 1 st Quarter 2009 - Report 55 -

1. Audit Bureau of Circulation“Health Check”1st Quarter 2009- Report 55 - Period: January – March 2009 Presentation: 19th May 2009

2. Structure • Introduction • Purpose • News in print • Global happenings • Local developments • Health Check • Structure • Report Back • Conclusion

3. 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 & Q3 • Full presentations: Q2 & Q4

4. 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.

5. News in Print Global • 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.

6. 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%

7. 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.

8. Calendar Events – Second Quarter 2009 • Submission of Data – 28 July 2009 • Audit Reports – 4 August 2009 • Next Presentation • Release of Data – 13 August 2009

9. “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.

10. Membership Comparison

11. NewspaperQuarterly Trends • 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%.

12. Category Analysis : Daily Newspapers • Highlights • PMIE & Bulk sales continue to shrink – now contributing only 4% of total.

13. Category Analysis : Weekly Newspapers • Highlights • Category up 2.8% which reverses the 8% decline in the prior quarter. • Growth seen in subscriptions.

14. Category Analysis : Weekend Newspapers • Highlights • Category down -2.0%. • Sharp decrease in PMIE (-26%) now in-part swopped into Bulk +17%.

15. MagazineQuarterly Trends • 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.

16. Category Analysis : Consumer Magazines • 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..

17. Category Analysis : Business 2 Business • Highlights • Economic forces affecting both the Total Paid and Requested circulation. • Promotional copy distribution has been reduced dramatically.

18. Category Analysis : Custom Magazines • Highlights • Static category delivery @-1.4% • Equal movement from non requested into requested, 5% either way. • Total paid, although small is down 28%.

19. 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.