Sep 2, 2006
Are TV, newspapers,and radio under siege?
By DEPUTY POLITICAL EDITOR, Chua Mui Hoong

2043.

That's the year one pundit declares will be the time the last physical copy of a newspaper is printed. Journalism professor Philip Meyer claimed this in the book The Vanishing Newspaper.

In his National Day Rally speech two Sundays ago, Prime Minister Lee Hsien Loong described the mainstream media as being 'under siege' from digital media.

He noted the onslaught of digital media platforms and said: 'The mainstream media television, newspapers, radio, they are under siege. They worry that all the eyeballs will go somewhere else and they have to find ways to hold these eyeballs to keep making sure that they are relevant and they can fulfil their role.

'So they have to adapt, but they have to remain objective, maintain a high quality...Inform, educate, entertain, but play a constructive role in a new way in Singapore.'

Worldwide, many newspapers see declining readership and dwindling TV audiences. Advertising spending is also falling for these media, as more move to online media.

So is the mainstream media here 'under siege', or even in inexorable decline?

Reports of an impending demise are grossly exaggerated, says Singapore Press Holdings' Cheong Yip Seng, Editor-in-Chief of the English and Malay Newspaper Division.

'We're not about to capitulate,' declares Mr Shaun Seow, deputy CEO (News, Radio, Print) of MediaCorp, the national broadcaster.

'Its bark is worse than its bite,' says Straits Times Editor Han Fook Kwang of the challenge posed by digital media to traditional media.

Brave words, but are mainstream media editors too sanguine about the threat ahead? Insight finds out.


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Sep 2, 2006
Looking the media storm in the eye
Will the rise of online media deal a body blow to mainstream media? What are the challenges mainstream media faces in adapting to a new kind of content and a new kind of business model?

Chua Mui Hoong and Peh Shing Huei report

PUNDITS say the writing is on the wall for traditional media.

But editors of the two biggest players here - print giant Singapore Press Holdings (which publishes The Straits Times) and broadcaster MediaCorp - both argue in interviews with Insight that they are adapting well to the challenges of new media, and are not about to surrender the fight.

Despite the brave words from these local media editors, the fact is that all over the world, traditional media companies face declining advertising revenue and dwindling readership and audience numbers.

This is because more readers, viewers and advertisers are moving online or onto digital platforms such as cellphones or personal digital assistants (PDAs).

The Economist last week published a survey on this issue. One figure it cited was that the number of people employed by the newspaper industry was down by 18 per cent, from 1990 to 2004.

Another estimate predicts that one quarter of print classified advertisements will be lost to digital media in the next 10 years.

More damning numbers: In 1995, newspaper advertising claimed 36 per cent of global advertising. Last year, it was 30 per cent. By 2015, it's likely to be 25 per cent.

Nor is the outlook for broadcasters much brighter.

Last year, advertising expenditure on television in Singapore fell by 18.5 per cent to $724.9 million.

Radio advertising fell 5.9 per cent to $177.8 million, according to a survey by Nielsen Media Research Singapore in March.

Newspaper advertising fell by 0.8 per cent to $733.8 million.

In the United States, local TV news stations and cable TV networks alike are seeing falling audience numbers and advertising dollars, although morning news shows did see growth in advertising spending.

In Britain, advertising revenue is down across all traditional markets: national papers (down 2.2 per cent year on year), television (down 4.8 per cent), regional papers (down 9 per cent).

This is despite advertising spending going up 4 per cent. Meanwhile, Internet ad spending is up by 53.6 per cent, according to The Observer.

Two Sundays ago, Prime Minister Lee Hsien Loong noted that the mainstream media was 'under siege' by digital media and had to evolve to remain relevant to a new generation. But he urged it to maintain high quality standards even as it adapts to new media.

Holding on strong

MEDIA players here say they are aware of the trends globally, but point to the positive side.

Mainstream media here continues to be the dominant source of information. A survey by the Institute of Policy Studies (IPS) after the election showed that newspapers and TV were overwhelmingly the main source of information for campaigning news, with the Internet coming in last, even after word of mouth, notes IPS senior research fellow Tan Tarn How.

Media editors themselves say they have been quick to embrace the challenges brought by new technology.

Singapore Press Holdings (SPH) for example, set up its news website and AsiaOne portal in June 1995. It recently started Stomp, a digital portal with pictures, text, audio and videocasts, to meet the new demand for reader-generated content.

It has also gone into delivering content on mobile phones, and started an online jobs classified advertising portal.

Straits Times editor Han Fook Kwang reels off a string of facts to back his argument that the SPH flagship paper has stood its own: circulation continues to grow, albeit at a slower pace than before.

He credits this to strong content, which has managed to net more readers despite an increase in cover price in January 2004 from 60 to 80 cents.

Median reading time is up, at a high of 41 minutes. He says: 'I won't say we are under siege, but we are very conscious of the challenges.'

MediaCorp too is building up its online presence. It has also used SMS and e-mail to increase the interactivity of its programmes.

Its deputy CEO (News, Radio, Print) Shaun Seow acknowledges that one big issue it faces is the decline of 'prime time', when big shows were guaranteed to draw in big viewership numbers for advertisers.

Instead, technology now allows people to watch what they like, when they like, in 'my time'.

While this is a challenge, Mr Seow notes that the rise of digital media has given radio a new lease of life, with visual extension of radio content, web and live streaming and podcasts, all downloaded and consumed in the listener's own time.

Content is king

DESPITE mainstream media's (MSM) best efforts, there's no denying that it faces real pressure from digital media.

The nature of the threat is two-fold: in content, and business model.

First, content. Some analysts say old media's biggest failing here is that it is stuck-in-the-mud conservative and traditional.

Hence they say that even when MSM enters cyberspace and offers its news and information on websites or via vodcasts, the nature of the content is traditional and staid.

So the delivery platform may be new media (via the Internet), but the content makes it traditional or mainstream media.

In the Singapore context, a few observers say the real issue is that newspapers and TV stations here have a pro-establishment slant which turns off segments of the population.

Mr Alex Au, who runs the yawningbread website, argues that the real distinction here is between government-dependent media and government-independent media.

'Government-dependent media subscribes to the idea that the agenda is set by the Government; it highlights issues the Government considers important, and marginalises those the State wishes to downplay.

'Government-independent media doesn't. It's citizen-driven and has citizens setting the agenda.'

Blogger Mr Wang concurs.

'In Singapore, the nature of MSM requires it to adopt a certain political orientation and to take the associated stance on current issues. Non-MSM does not suffer from those restrictions - that is its appeal.'

Philosophy tutor Loy Hui Chieh, who edits the singaporeangle blog, notes that digital media can function as a kind of check on mainstream media. It's now possible to 'publicise' slips by the mainstream media, he says.

So should MSM become more like alternative, new media, in its content?

That call for the mainstream media to be less conservative is commonly made by younger Singaporeans and Net-savvy citizens, who compare the MSM with the unfiltered, no-holds-barred conversations online and find the former lacking.

But the suggestion is not one MSM editors are about to take up.

Defending ST's pro-Singapore editorial policy and its extensive coverage of issues deemed important by the Government, Mr Han argues:

'The Government is a dominant player in Singapore, and its decisions and policies affect all citizens. We would be doing readers a disservice if we failed to report on the biggest newsmaker sufficiently.'

But what if younger readers expecting some of the rambunctiousness of the Internet desert staid MSM in droves?

Mr Han notes that ST is a 'broad church' catering to a large group of readers. Also, he argues that a newspaper can make its content attractive through good design and story-telling, without becoming deviant.

He says that younger readers also value ST's trustworthiness, citing a 2004 survey in which 90 per cent of readers aged 15 to 29 found ST 'intelligent' and 80 per cent 'trustworthy'.

Mr Cheong Yip Seng, editor-in-chief of SPH's English and Malay Newspapers Division, is a firm believer that it would be suicidal for MSM to go downmarket or compromise its editorial values.

'Credibility is a very precious commodity, a quality we have that you don't find much of on the Net.'

Singapore's newspaper company is by no means alone in this argument, which basically says that quality journalism raises influence and credibility, attracts readers, and hence drives profits and growth.

In this mindset, the surest way to financial ruin is to go downmarket.

MSM media editors note that a lot of online content is unprocessed and unverified, unlike traditional media content produced and checked by professional journalists.

Rather than become more like the freewheeling Internet, mainstream media editors say the challenge is to use the Internet to deliver content that has the trustworthy cachet of traditional media.

As Mr Cheong notes, SPH's strategy is to deliver quality content based on good old-fashioned journalistic values, delivered via multiple platforms.

'If our customers prefer to buy our products from different stores - on their cellphones, or computers or PDAs - we got to sell it to them there. But the quality of the content - its reliability, credibility, accuracy - won't be compromised.'

Business model

TO MR Patrick Daniel, managing editor of SPH's English and Malay Newspapers Division, the angst over Singapore's MSM being pro-government and the nature of its content, is not the biggest issue.

The way he sees it, the real battle in the media war is not between mainstream media content versus alternative content. It's not even about whether a print warhorse can go online (most major newspapers have been there, done that).

It's about whether the mainstream media can sustain its business model.

In the good old days, newspapers operated in many cities pretty much as a monopoly. Newspaper barons reaped profit margins of 20 to 40 per cent. Then, radio and television entered the picture and shook up the market. Now, the Internet is in the picture.

Today, newspapers and broadcast TV stations - like schools, like parents - face competition for youngsters' time from websites, podcasts, cellphone, computer games and the myriad of fun stuff to do in this modern technological world.

The advertising market is fragmenting worldwide, Mr Daniel acknowledges. But 'mainstream media remains by far the most profitable segment of the industry,' he stresses.

"As the incumbent, we do face competitive pressures from the new kid on the block, but there's no question of any imminent defeat.'

Journalism professor Philip Meyer, an advocate of the quality-journalism-makes -good-business-sense school, wrote in an article back in 2004: 'High-quality journalism is still economically feasible, but it will never again be as profitable. The real problem is adjusting to profit levels that are normal for competitive markets.'

But shareholders used to fat profit margins are not likely to be so forgiving of lower margins.

Take the case of American newspaper titan Knight Ridder. It was forced into a sale by shareholders this year, as profit margins slowed from about 20 to 16 per cent. Although 16 per cent is a respectable profit margin, it paled in comparison to newspaper companies' historical performance.

Hence there is a movement in the United States of non-profit outfits taking over or starting news outlets.

They follow roughly the model of the well-known National Public Radio, which depends heavily on sponsor funds, yet is well-regarded for its objective reporting.

In fact, basic media economics has long taught that there is a market failure in the media market. Advertisers like large audiences, so media companies have a financial incentive to offer news and entertainment that attracts large numbers.

But such mass appeal content may not serve the public good. For example, sex and sleaze get large numbers of readers, but will affect the tone of a society.

Hence there is a longstanding argument in media analysis that media companies perform best if they are not listed companies, but are held privately, or owned by the government. This arguably shields them from the commercial pressure of having to put out content that gets large numbers to satisfy advertisers.

But as Mr Daniel notes, the discipline of the market is also good for media companies, forcing them to respond to the competition.

So far, some mainstream media companies have been quick to rise to the challenge posed by digital media, a point made by Dr Randy Kluver, a former media lecturer at the Nanyang Technological University, now with the Texas A&M University.

One example is Norwegian newspaper Schibsted. Its websites rank first and second in Scandinavia for visitors. It also created new Internet businesses such as Sesam, a search engine, and FINN.no, a portal for classified advertising. So successful were the online ventures that last year was the company's best ever for revenues and profits, says The Economist.

The venerable New York Times will merge its print and online newsrooms next year.

In fact, newspapers with websites find that the profit margin from web advertising is higher than print, because online ads have zero newsprint or distribution costs.

It is also a fast growing market.

Advertising for all US newspaper websites grew by 35 per cent in the first quarter of this year, compared to the same period last year. But the total sum is small beer: US$613 million (S$970 million), compared to a total print and online advertising market of over US$11 billion over the same period.

Mr Cheong says SPH's new media ventures make up a 'very very very small' fraction of print advertising revenues.

To him, the solution is: 'Produce very good content that people will pay for. That's what we're good at, and that's what we'll continue doing. I'm not putting up the white flag.'

MediaCorp's Mr Seow notes:

'Every time a new communications or media technology emerges, pundits would start predicting the demise of the incumbents. Did radio replace newspapers? No. Did TV replace radio? No again.

'All three co-exist and serve their audiences in different ways. What happens is old and new co-exist quite happily, and I see this happening now with mainstream media and new media.'

Ask lawyer Michael Loh, 42, if mainstream media like newspapers is in danger of extinction and he will say no.

He likes the tactile feel of papers. He likes to flip the pages and scan headlines while sitting in the loo.'There will always be a market for mainstream media.'
There's another advantage mainstream media has over digital, he says: 'A newspaper can also be used as an umbrella on rainy days.'
muihoong@sph.com.sg
shpeh@sph.com.sg
THE DIFFERENCE
'Credibility is a very precious commodity, a quality we have that you don't find much of on the Net.'
MR CHEONG YIP SENG, editor-in-chief of SPH's English and Malay Newspapers Division
THE APPEAL
'The nature of mainstream media requires it to adopt a certain political orientation... Non-mainstream media does not suffer from those restrictions.'

BLOGGER MR WANG
THEN AND NOW
In the good old days, newspapers operated in many cities pretty much as a monopoly. Newspaper barons reaped profit margins of 20 to 40 per cent. Then, radio and television entered the picture and shook up the market. Now, the Internet is in the picture. Today, newspapers and broadcast TV stations - like schools, like parents - face competition for youngsters' time from websites, podcasts, cellphone, computer games and the myriad of fun stuff to do in this modern technological world.

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