THE TEMASEK REVIEW

By Imran Ahmed, Business Correspondent

The monopoly position of Singapore Press Holdings (SPH) has me once again contemplating the future of Singapore’s media sector. Yes, the Straits Times is a decent newspaper as far as international newspapers go but I am convinced Singapore’s print market can absorb at least one additional player.

The global media industry is in a state of flux. There is no clarity about its future direction. The New Media (NM) is a relatively recent entrant to the landscape. NM is already influencing the Main Stream Media (MSM) in many ways.

In the Singapore context, where media controls are tight, sustainability of potential news websites is a key factor. SPH newspapers represent the entire spectrum of daily newsprint opinion available in Singapore.

Through their various sites, SPH and affiliated entities are powerhouses in online news channels too. SPH has announced an initiative in the financial space through an online portal in partnership with the Singapore stock exchange (SGX).

SPH minimizes competition in any possible legal manner. It helps that the levers of the state are supportive of SPH efforts to dominate the dissemination of news and views (for socio-political reasons). There is little left in the media punch bowl for other participants to enjoy.

SPH’s dominant industry position is not under threat, now or in the near future. SPH is extremely well entrenched. Even a gradual deregulation of Singapore’s media industry will see most competitors as minnows for many years.

The media is a ‘sensitive’ industry. Nevertheless, breaking the SPH monopoly on news does not imply an entirely unregulated industry. The government’s fear that its control over a liberalized media sector will disappear is misplaced. Censorship, including self-regulation, will exert strong influence in content creation. Strict laws pertaining to defamation will not disappear overnight. Journalists ignore them at their peril.

Common sense and anecdotal evidence suggests the Singapore newspaper market is large enough to accept new entrants. Daily weekday circulation of the Straits Times was 389,000 in August 2008. The most recent US newspaper numbers place circulation of the Chicago Tribune at 466,000 and the Houston Chronicle at 384,000.

No comparison is perfect but both Chicago and Houston have smaller populations than Singapore’s five million. Chicago has a population of 2.8 million and Houston 2.2 million. Additionally, the Tribune and the Chronicle have to compete with other daily newspapers, local and national.

The United Arab Emirates (UAE) is an Arabic speaking country with a total population estimated at 5.5 million, many of whom read only Arabic language newspapers. The UAE has at least four main English dailies, i.e. the Khaleej Times, Gulf News, Gulf Today and the National. The National is a relatively new paper launched just a few years ago. The circulation numbers for the English language newspapers in the UAE are sufficient to support a thriving service sector with umpteen English newspapers.

In Singapore, there is only one domestic mainstream English language broadsheet, the Straits Times. If seemingly smaller markets can commercially support more than one broadsheet daily then why not Singapore?

Assuming the deregulation of the print media may not happen soon, what is the future for the NM? Can the NM compete with an entrenched MSM which is able and willing to leverage its existing network to create and package content? A network comprised of hundreds of journalists, editors, copy writers and a multitude of technical staff.

It is difficult to answer any of the above questions with certainty. Undoubtedly, the NM in Singapore will transition into something sustainable over time. The revenue model has yet to be defined. The status quo is only sustainable if the NM continues as an amateur arena with a limited audience. It is unclear whether existing sites will move closer to a pure ‘media’ role or further away into a ‘sales’ type model.

The sales model implies content geared to sell specific products or services. For example, a travel site dedicated to selling tours or a wealth management site selling financial services. By moving to such a model, the NM sites will naturally move away from being news / opinion providers and into more traditional sales / service sites. It is one way forward for niche websites operated for the primary purpose of profit maximization.

The pure media model is a Huffington Post type site which focuses only on disseminating information, especially about current events. The Huffington experience demonstrates that to compete head on with industry majors requires time and resources. Even with the support of ‘celebrity’ writers and massive readership, profitability is not a sure thing, especially in the short term. Survival and longevity is the key for such a news site.

Today, most Singaporean sites (amateur and quasi-professional) rely upon the goodwill of fellow netizens, self funding and ‘pocket money’ generated by contextual advertising. It is impossible to create credible content on a regular basis with such a paradigm. Most sites will die a gradual death as content quality withers. Others will remain enthusiastic forums for amateur writers. While there is nothing wrong with amateur forums, the audience is limited and the site’s impact is restricted to a narrow demographic segment.

All signs point to the Singaporean NM sites slowly transforming themselves into niche sites operated by ‘experts’ in their respective fields. The main reason for the supposition is the inability of news sites to tap into a larger demographic due to the dominance of SPH. Given SPH’s deep pockets and monopoly position the company will fight fiercely to retain their privileged position.

The global media industry is valiantly striving to redefine its relevance in an age marked by the wide availability of free information via the internet. The international (traditional) print media has lost several battles along the way. Not SPH. SPH is like a steamroller – it just flattens any obstacle in its path. Consequently, SPH provides attractive and consistent returns to its shareholders, including the government. The government and shareholders win by having all newspapers concentrated with one owner.

However, the policy deprives Singaporeans from receiving a diversity of opinion and constructive intellectual debate on issues of national importance.

The real loser is Singapore – and any entrepreneur wishing to invest capital so as to create an enlarged, vibrant media sector. It is time for the government to encourage greater private sector participation in the media sector by reducing barriers to entry and creating a level competitive playing field.

Other articles by Imran Ahmed:

>> Will the real academics stand up?

>> Towards a nation of international capitalists

>> PM Lee wades into Singapore’s blogosphere

About the Author:

Imran Ahmed majored in Diplomacy and World Affairs. He has been a finance professional for the last 20 years, most recently spending five and half years in Dubai before returning to Singapore. He blogs at http://imranwrites.blogspot.com

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