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What happened to Singapore Press Holdings? (Part I)

UPDATE 18/10: I wrote a Part II to this topic here, on alternative strategies to increase revenue streams the Singapore Press Holding can consider, as opposed to retrenchment

This morning, I read with interest the news that the Singapore Press Holding (SPH) is retrenching journalists, and also the report that SPH only informed the Journalist Union half an hour prior to the announcement.

Incorporated in 1984, SPH is still Asia’s leading media organisation. So I was actually rather surprised that they are doing an retrenchment exercise!

On the one hand, Singapore ranks really low at the 154th position according to the Reporters’ without borders research. The logical conclusion is then that in the first place, people won’t be reading highly self-censored news. This is because the internet makes perceived “non-censored” news so easily accessible and free, especially via alternative news portals.

On the other hand, I can’t help but wonder if SPH’s finances is really that bad? Afterall, its other other significant “competitor” in Singapore is Mediacorp, and both groups don’t even compete that much with each other, if at all.

Or is it a case that SPH is going after higher returns for its shareholders, which is also a perfectly legitimate goal?

The various revenue sources of SPH.

SPH generates revenue from three sources: Media, Properties (via SPH REIT) and other businesses that includes online classifieds, events and exhibitions, and education.

In recent years, there is a strategic shift in investment and resources towards other revenue areas such as property to diversify its operations. You can see the operating revenue and the profit before tax margin from the following chart:


(Image Source: SPH 2015 annual reports)

And do you know Paragon, the upscale shopping mall, is part of SPH REIT’s portfolio? 😀 I was pretty surprised to discover that because I always thought SPH was a strictly media company.

It’s great to know that SPH actively diversifies its business.

So, perhaps the retrenchment also results from a demand-side issue.

In the practical world, a lot of the media business is about “following the money”. So let’s take a moment to think: Exactly what do Singaporeans want to read?

Click baits, half-truth and controversy do sell, because people want to believe in whatever they already believe in/ feel for. If a media group were to want to profit maximise, they will probably have to cater to what appeals most to the masses, not always to the “truth”.

Knowing exactly who owns and influences the particular media will affect the version of truth (product) we consume. SPH for example, is regulated by the Newspaper and Printing Presses Act of 1974, and even though it is a public-listed company, any transfers of management shares have to be approved by the Ministry of Information, Communication and the Arts.

So, …what types of articles tend to go viral in the Singaporean context?

I think we can always refer to the types of articles on Stomp, Mothership, The Smart Local, anything political, anything xenophobic, and anything with pretty girls (boobs+ legs a definite draw). For example, according to SimiliarWeb, Stomp has a monthly viewership of 1.5million a month.

Perhaps, SPH is facing declining profits not only due to digitalisation, but also due to high online competition. Perhaps too, journalistic quality isn’t that highly demanded anymore–Even though The Middle Ground has good curated news,  their stats are nowhere as high as Stomp’s 1.5million views a month.

Could SPH consider not retrenching its journalists by adopting multi-channel strategies instead?

Recently I’d been doing a lot of reading on the Sanoma Group in Finland. I can see a stark difference in strategy that SPH and the Sanoma Group are adopting to cope with the various challenges of digitalization.

Established in 1889, the Sanoma Group brands itself as a media and learning company. They have two divisions. The first division is Sanoma Media, which involves magazine publishing, TV, radio, print, digital reading, online gaming. The second division is Sanoma Learning, which involves digital education, business information, educational learning and services.

Previously there was also a third trade division but Sanoma Group has since sold the R-kioski brand and press distribution to a Norwegian public-listed company.

Different from SPH, the Sanoma Group focuses strongly on a multi-channel strategy. That is to say, it does not shift its business operations towards digitalisation like SPH does to cope with declining print revenues. Instead, it considers how different platforms can be used together to give the consumer different experiences.

For example, in the area of home décor, The Sanoma Group intends to show TV programmes on home décor, feature the same content on related home decor magazines and then run an e-commerce platform to drive sales for its represented home decor brands. Therefore, its combined media networks can create traffic and drive sales for its home decor clients.

The implication then is that unlike SPH, the Sanomat Group will not divert resources into completely non-media revenue-driving areas like property, but instead invest them across various media channels and platforms.

Some concluding thoughts.

In conclusion, what happened to SPH? Why does SPH need to retrench some of its journalists?

Perhaps it all boils down to two factors.

One, the challenges of digitalization. These challenges affect most media houses worldwide.

Two, perhaps SPH’s retrenchment and perceived disrespect towards the Journalist’s union is an indication that an increasing number of (young) Singaporeans don’t actually read “serious” news that frequently anymore.

Consequently, there is therefore no demand for “high quality journalism”, which leads to actual journalists being retrenched. And those who do read news:

  1. Don’t really care about”serious” news;
  2. Could easily get “serious” news from media houses elsewhere; or
  3. Could get “serious” local news free.

Food for thought, no? 

1 Comment

  1. Pingback: Daily SG: 19 Oct 2016 - The Singapore Daily

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