The Independent Group of newspapers has been portrayed by its detractors as ruthless cost-cutters since Tony O'Reilly bought control of the former Argus company.
Ivan Fallon
But CE Ivan Fallon does not see things that way. "One of the reasons we have done well is that we have anticipated the kind of pressure now hitting the industry. We are trying to be smarter about the way we produce newspapers, and that means being more efficient."
The group, owners of The Star in Johannesburg and the major English newspapers in Cape Town, Durban and Pretoria, has made big savings in using pooled copy and common pages, on the lines pioneered by Business Report, which appears in its main papers countrywide. "This allows us to provide better quality pages at a cheaper price," says Fallon. There are also advantages in presenting packages to advertisers.
More controversial has been the move to pool editorial resources at a local level. In Cape Town, a single sub-editing pool produces two dailies, a weekend paper and 14 community newspapers, and there is a seven-day-a-week sports operation for the mainstream papers.
The company has run into union opposition in implementing the same system in Durban, with a common newsroom for five major publications, though each will retain its own specialist reporters. "We feel this is the way to go," says Fallon. "The days when you could run your newspapers as if each of them were The Times of London are long gone. Our papers are not big enough, and costs are too high. If one persists with old-style thinking, newspapers will die, and I'm determined not to close any of our newspaper titles in SA."
What about staff loyalty to individual titles in a combined operation? " The soul of the newspaper is sacrosanct, and its policies are sacrosanct," says Fallon. "It is up to the editor and his senior staff to maintain the paper's individuality, but there is a lot that can be shared, such as racing results, TV programmes and film reviews. Why should film reviews, or car tests, be any different in Johannesburg and Cape Town? It's the same car and the same film."
For all its problems - including the big increase in newsprint costs - Fallon says the SA publishing industry is not as badly hit by the international economic slowdown as those in the US and UK.
"Newspapers in the UK are suffering in a way no-one can remember happening before. Maurice Saatchi wrote recently that it was the worst slump since 1937. Though things are not easy, our situation is nothing approaching that. We had a reasonably good year in 2001 despite everything, and this year we are doing a little better. We have got our costs right down and feel we can cope with the current situation, and worse, without any titles being threatened. We remain a very profitable part of the international Independent group's business," says Fallon.
He says O'Reilly is highly optimistic about SA, and believes the "competitive devaluation" of the rand makes the country an attractive place in which to do business. The group recently bought control of the Corpcom outdoor advertising company in a R550m deal. The company has been renamed Clear Channel Independent, strengthening the association with its American partners, Clear Channel. O'Reilly is looking for other companies to buy, not only for Independent but also for his other businesses. "That is the measure of his confidence in SA."
Fallon says there have been no indications that government has reservations about O'Reilly's control of SA newspapers. "Our investment was welcomed personally by Nelson Mandela, and it has been welcomed by President Thabo Mbeki.
"We are looking for a black empowerment partner for the outdoor advertising company, and negotiations are well advanced. In our newspapers we have taken the more meaningful route of empowering the company and staff. When we took over, 14 of the 15 editors were white males. Now seven are white, and the others are black or women. This level of change is true of management as well. We have a very active transformation policy."
In April, the Independent group launched its first Zulu daily newspaper, Isolesizwe (Eye of the Nation), under editor Philani Ngwaba. The target market is the urban reader in Durban and Maritzburg, but the newspaper is available throughout KwaZulu-Natal, and a few thousand copies are being sent to Johannesburg.
"We are very pleased at the reaction to the paper, and excited about its prospects," says Fallon. "We expect good support from retail advertisers, especially. Most of the ads will probably be in English, but companies that take the trouble to convert their material into Zulu could do themselves a lot of good in the community."
Fallon says the Independent group is not gloomy. "The next six months are going to be quite rough, but we're looking forward to the second half of the year."
