This afternoon I wrote part of my reflections on what happened to Singapore Press Holdings. After that post was published, some of my readers sent me great articles related to SPH’s declining bottom line and retrenchment (read: this and this).
Then I reflected and realised that actually…SPH is indeed pretty behind in its digitalisation processes. In addition, consumers were clearly not as engaged as they are vis-a-vis other online news or entertainment portals. By entertainment portals I also mean New Nation, lol!~
So I’d decided to write Part II to give a perspective about how other media companies in the world cope with declining print revenues. For convenience’s sake, I will analyse Finnish media houses since I’m currently based in Helsinki. I will first list the strategies of the top four Finnish media houses: Sanoma Group (which is easily the most influential media house in Finland), Yle (the public broadcasting house in Finland), The Bonnier Group (More of a publishing house) and Alma Media. Subsequently, I will highlight some common trends in their 5-year strategies with a focus on media digitalisation that SPH can consider adopting so that they don’t have to fire their employees.
What is immediately striking, however, is that all four Finnish media houses don’t base any of their revenue streams on properties or REITs! 😀 That to me is so fascinating. Also, in Finland if you want to retrench staffs, you have to inform the labour unions 3 months in advance, not 30minutes! No wonder the local Singaporean union is irritated–they have all grounds to be.
All emphasis in Italics are mine.
(A) Sanoma Group’s strategy to deal with digitalization.
As I have written in Part I:
“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 Sanoma Group will not divert resources into completely non-media revenue-driving areas like property, but instead invest them across various media channels and platforms.”
(B) Yle’s strategy, with a focus on digitalization.
As a public broadcasting company, Yle has come up with a 5-year strategic plan from 2016 to 2020 to deal with the challenges that come with digitalization
This strategy includes 8 points:
- Yle will focus on the quality of content and programme for TV, instead of quantity.
- Yle will strive to renew television, and make television relevant again for the public.
- Especially for digital purposes, Yle will take radio online and do archival services. In particular they aim to develop easy-to-use audio services, particularly for portable and in-car devices.
- Yle intends to develop its online services and video content to be used anytime and anywhere. They aim to have a million users of Yle ID by the end of 2017 as their online database.
- Yle will focus on partnerships that enhances education and learning.
- Yle will also broadcast important sporting events online and on TV.
- To reach out to younger people, Yle will find out about their online consumption habits and react accordingly.
- Yle will promote and increase partnerships and collaborations.
(C) Bonnier Group’s strategy, with a focus on digitalisation.
Bonnier Group’s strategy is to commit to producing high quality content.
By high quality content they mean upholding high standards in storytelling, journalism and promoting freedom of speech. Bonnier Groups’s goal is to quickly increase the share of their revenues coming from digital sources, from today’s 20 percent to 50 percent by the year 2020.
These are the business areas that Bonnier Group is targetting: Book publishing, broadcasting, growth media, magazines, business-to-business, news.
From 2015-2020, Bonnier Group’s plan is to make more investment into technology and move more aggressively into the digitalization of media. They also want to go into the e-learning business.
One of their editors-in-chief described a period of poor results in a journalism business as a “wet blanket” over the news desk, and this is only reflective of the urgency faced by Bonnier Group to digitalize their operations, content and services even further.
(D) Alma Media’s strategy, with a focus on digitalisation.
From 2016-2020, Alma Media will focus their operations very much on expanding their existing products and services via digitalisation.
Also, they intend to restructure their business model to strengthen existing brands and also acquire new markets. Using their strong base in Finland, they also intend to reinvest their profits into international expansion. The focus however is strongly on digitalisation of media services in both local and global areas.
In order to do that, they intend to balance out the drop in print media with the rise in digital content sales. They want to increase their profits while maintaining a high level of quality content, as well as user experience.
In addition, they want to make use of user’s data analytics to better inform advertising behavior and ROI.
For digital services, they want to go into marketplace business operations, printing, training and marketing services not just in Finland but globally. operations according to need.
The focus is also on strategic partnerships and brand visibility in and outside of Finland.
Analysis: Common trends of coping strategies by all four Finnish media houses.
- High quality content. It is very clear that all four media houses pride themselves on high quality content, something that is not surprising considering that Finland ranks number #1 on the Reporter’s Without Borders index. This however does not mean that reporters in Finland say whatever they want–far from it! Reporters do self-censor to avoid unnecessary trouble, and there is consensus that there IS a lack of investigative journalism in Finland.
The significant difference here however is that all four companies seek to improve quality of content, instead of retrenching their staffs. Yle for example, even spoke about doing less work, so that the media company can focus on producing higher quality content. Bonnier Group spoke about doing more projects that have the potential to engage the audience on a deeper level, such as storytelling about interesting cultures and people. All these are strategies SPH can consider.
- E-learning, partnerships and collaboration. Now this is an interesting point, because all four media houses have the intent to go into the e-learning industry. What on earth does this mean? This means that the media houses want to use their networks to benefit students, learning institutions, and make a profitable business out of co-creating information with educational institutions in the process.
With the intellectual property generated from the research process, it can then be exported as products or services to the rest of the world. It is truly interesting that these media houses see more collaboration within Finland as a potential competitive edge to being special outside of Finland.
Imagine this: If you are a media house and you can work together with educational institutions to do research and strategy together, would it not result in win-win situations in which the unique know-how can then act as the differentiating factor of Singaporean media in the Asian region?
Anyway, I am personally convinced that the Finnish success in media business is not due to Finns being more hardworking. That’s far from the truth! Finnish media works because the average Finn collaborate more than the average Singaporeans does. In general, Singaporeans seem to value competition at all costs.
If only if our media industry can collaborate more within the country in order to be a greater competing force in the region–I am sure SPH will go far. Imagine SPH collaborating and forming partnerships with our top Singaporean universities and exporting the IPs to the rest of the world–isn’t that a great form of revenue?
- A strategic building of online database and focus on online user’s experience.
All four media houses focus on building their online database and focusing on improving the online user’s experience as well. What this means is more beautiful visual designs, greater personalisation, more compelling content that resonates with the reader on a deep, intellectual level.
That is to say, Finnish media houses also make efforts to nurture their readers.
Great content takes time to produce, and I suspect that SPH reporters are usually on a tight timeline, on top of having to subscribe to certain censorship guidelines. Therefore, perhaps SPH’s quality of content is suspect.
Ultimately, perhaps we need to ask ourselves the following questions: Is freedom of expression affecting SPH’s credibility and trustworthiness, hence affecting its profitability? Can our SPH journalists be trusted with the greater responsibility that comes with greater freedom of speech?
And more importantly, how can SPH collaborate more with our excellent education institutions and form partnerships with the entrepreneurship ecosystem to restructure its business model, such that it can export more IPs and services to the world? So that competition is not within but outside of Singapore, ensuring that we invest in and benefit Singaporeans in the process?
I think all these are important questions that can be raised at the retrenchment negotiations that the union will be holding with SPH. I don’t think “retrenchment” is the “only” solution to the dipping bottom line, to be honest. Staffs can always be retrained with a revamped business model.
After much careful thought, I really do sincerely believe that SPH can consider creating more revenue streams via collaboration with excellent local networks. Related to training services for example, can SPH staffs hold writing/ presentation workshops in schools, and profit from the services? For one, I would definitely send my future kid to a SPH-owned training centre to give him/her the additional edge to writing well. Can we as a highly-educated workforce create more IP with globally-renounced NUS and NTU to earn big time from export revenue?
I think we can, and it will pay off very well.