AI Chatbots and Social Media Disrupt South African News Media Landscape
The South African news media industry is grappling with a perfect storm of challenges, with artificial intelligence (AI) chatbots emerging as the latest threat to a sector already reeling from the dominance of social media and search engines. A recent report by the Competition Commission, titled the Media and Digital Platforms Market Inquiry, paints a stark picture of shrinking newsrooms, declining ad revenue, and the increasing casualisation of journalists. This inquiry was launched in response to the severe financial strain faced by the news media sector in the wake of the digitalization of news consumption. The central question posed was whether the influence of search and social media platforms, which compete for digital advertising and act as intermediaries for news content, is exacerbating the difficulties faced by news publishers.
The report highlights the multifaceted nature of the crisis facing the South African news media landscape. The inquiry delved into several key areas: the role of search and social media platforms in digital advertising and news distribution; the impact of AI chatbots and AI-powered search on news media organizations; and the influence of the AdTech industry on monetization for news publishers. The findings reveal a sector struggling to adapt to the rapidly evolving digital ecosystem. Newsrooms have been halved, forcing many community and regional newspapers to shut down altogether, impacting local news coverage and diversity of voices.
AI chatbots, such as OpenAI’s ChatGPT, Meta AI, Google’s Gemini, and Microsoft’s Co-pilot, pose a particularly significant threat due to their widespread distribution through various channels, including standalone sales, partnerships, social media platforms, Android devices, and desktop computers. These AI-powered tools reduce referral traffic to news websites, essentially capturing content value on their own platforms. The Commission’s report found that these AI developers have benefited from South African news media content to train and develop their foundational models and chatbots. This practice, enabled by web crawlers scraping content from news websites, effectively utilizes South African media content without equitable compensation.
The report also highlights the unfair use of news media content to develop Large Language Models (LLMs) and chatbots that now directly compete with news organizations to inform consumers. This competitive pressure, coupled with limited referral traffic from AI-generated summaries, further diminishes the revenue potential of news publishers. Moreover, the dominance of foreign media in content deals with AI developers undermines the prominence of South African media, exacerbating the distortion of competition within the sector. Contractual provisions that prioritize global news sources further disadvantage local media outlets.
The consequences of these trends are dire. The decline in the quality and diversity of South African news media, especially among small and medium-sized enterprises (SMEs) and historically disadvantaged person (HDP)-owned media, undermines the plurality of voices. This is especially concerning for community and vernacular media outlets, including the public broadcaster. The ability of citizens to access news in their home language, a constitutionally protected right, is directly impacted by this erosion of media diversity.
The Competition Commission has proposed a set of provisional remedies aimed at addressing the identified issues and fostering a more competitive landscape. These include measures to ensure that South African news media are not overshadowed by global media in content deals with AI companies. It has been proposed that AI companies prioritize South African media deals and ground local news queries within South African content. Furthermore, the Commission advocates for opt-out mechanisms for South African news media regarding the training of AI models using their content. These remedies are designed to initiate further debate and engagement between stakeholders, paving the way for effective solutions.
Social media platforms also play a key role in the shifting news consumption habits of South Africans. With 87% of the population accessing news online, primarily through mobile devices, social media and search engines have become primary news sources. Younger audiences, in particular, prefer video news content over traditional text formats, consumed mostly on social platforms. This shift has had a significant impact on traditional ad revenue streams, with print media experiencing a 40% decline and SABC ad revenue plummeting by 47%. The Commission calls for the restoration of referral traffic to news websites to enable news media to generate higher value ads, combating the low-value ad environment currently offered by social media platforms. Further remedies include amending the Electronic Communications and Transactions Act (ECTA) to address the spread of harmful and misleading content online. This includes imposing liability on platforms that allow such content to proliferate and requiring proactive removal of harmful content and prevention of algorithmic boosting of misinformation.
The report underscores the unequal bargaining power between Google and news publishers due to Google’s monopoly position. This dynamic has resulted in an inequitable sharing of value, both historically and currently, contributing significantly to the erosion of the media landscape in South Africa. The report suggests that a bargaining solution is unlikely to be effective, especially considering the failure of large print media to reach agreements with Google despite negotiations, while other media organisations, like the public broadcaster, were excluded altogether. The Commission has, therefore, proposed a range for remedial value that can either be imposed or serve as a guide for further negotiations between media organisations and Google. The distribution of these funds is also a concern, with the Commission aiming to avoid further media concentration in a market already dominated by large media houses. The inquiry’s findings underscore the urgent need for intervention to ensure the survival of a vibrant and diverse news media landscape in South Africa, one that is essential for a healthy democracy.
