Singapore Press Holdings’ recent announcement of losses amounting to $83.7 million is another blow in a harsh 2020 for the media giant. Prior to this, the company held yet another retrenchment exercise in August; in June, SPH stock got kicked out of the Straits Times Index.
The financial results have sparked a fresh barrage of criticism levelled at its CEO Ng Yat Chung on social media:
Whether the harsh comments are fair is a matter of debate. As CEO, I suppose it is only natural for the public to blame him for poor performances. But, as we all know, COVID-19 was that one black swan event that nobody expected.
SPH’s profit strategy of capitalising on its property business probably suffered a huge blow, especially because its properties like Paragon and the UK student housing would have been directly affected by lockdowns.
And SPH’s core media business’s financial woes had long preceded the former general.
Digitalisation disrupts newspapers
In the upcoming book, “Navigating Disruption: Media Relations in the Digital Age”, the author details how digitalisation led to a fragmentation of the media landscape, driven by (i) multiple digital-native players pushing out free content and (ii) people’s changing media consumption habits from traditional to digital media.
In Singapore, the rise of Mothership, TheSmartLocal, SGAG, Vulcan Post, and prominent influencers (YouTubers like Night Owl Cinematics and Instagrammers) have taken a huge bite of SPH’s ad revenue.
Around the world, the news industry has been in decline for 30 years, according to the Financial Times. The report also cited a Pew Research Center finding that “US newspapers have lost almost half their newsroom staff since 2008.” In “Navigating Disruption”, the author witnesses and describes a retrenchment exercise while working in a major US newspaper in 2011.
Free digital content
The expectation that online content comes free has made running traditional media businesses very difficult. And as advertisers diversify their spending and move towards new digital native media players and Facebook’s hyper targeted ads, the budget that goes into newspaper ads get cut.
Traditional newspaper businesses around the world are struggling to find a solution to make money. Unless you’re the Wall Street Journal, Financial Times or the New York Times, it is hard to convince people to subscribe to your newspaper.
Mr Ng became CEO in 2017, at a time when SPH’s media business was already going south. So far, it looks like he has continued the drive towards the property business and retrenchments to cut cost. The one bright spot, according to a Mothership report citing Mr Ng is that there is a “9.4 per cent growth in circulation numbers from the success of our News Tablet digital product and higher readership…”
SPH: serving the public interest
As SPH’s media business continues to find a business model that will work, one thing is for sure: They cannot lose sight of making great content that will connect with Singaporeans. That is the bare minimum effort they have to make.
Products like the The Straits Times, The Business Times and Lianhe Zaobao have a strong branding in Singaporeans’ minds, and they have to continue to be the top news sources in the city-state.
One misconception that many Singaporean Internet users have about the local newspapers is that it is government-owned. Many books have documented the close ties, but SPH is not government owned.
SPH journalists do ask government agencies the tough questions, and they have the clout and access to do so, unlike many digital-native news outlets. Singaporeans can count on newspapers like The Straits Times to challenge the government bodies, and they have done so by treading a tough balance between serving public interest and the OB markers in place.
If SPH falls tomorrow and there aren’t any more newspapers to report and review government policies, then we are left fewer options for credible sources to do this. Mediacorp’s news entities may have a harder time asking tough questions because of the ownership structure, while digital-native news media like The Independent, The Online Citizen and Yahoo News SG may not have the bandwidth.
Hopefully, Mr Ng Yat Chung will not allow newspapers to crumble.
Preorder “Navigating Disruption” here: