TR EMERITUS

By Imran Ahmed, Business Correspondent

No the Prime Minister has not started a blog yet. Or at least I am unaware of it. However, his recent statements about the new media versus traditional news media have brought attention to th print media of the state.

It is extraordinarily easy to make a case for the gradual deregulation of the media industry. On the other hand, it is quite difficult to rationalize the continuation of current media policies.

Singapore is the first world nation with universal literacy. The new generation is socially aware and wants to have greater influence in their future. Currently, Singaporeans have limited outlets for debate beyond their local coffee shop.

I walked into a bookshop recently to look for magazines focusing on regional events, preferably published in Singapore. I found local and international titles on model railways, watches, and real-estate. There was not one English language magazine on regional news events.

I was shocked and found it difficult to believe. I visited the National Library and enquired with the staff if I had missed something and that my options truly revolve around reading the local version of Marie Claire of FHM.

It seems no one in Singapore is interested in news or commentary other than what is reported by the daily newspapers. Incredible but true.

The local print media is dominated by Singapore Press Holdings (SPH). SPH publishes all but one of Singapore’s daily newspapers. SPH also publishes approximately 100 magazine titles, including some international titles under local franchise.

The SPH website states, “Every day, 2.9 million individuals or 79 per cent of people above 15 years old, read one of SPH’s news publications.” The only newspaper not in the SPH stable is published by another government owned entity, MediaCorp Press Limited. SPH has a 40% stake in MediaCorp Press Limited.

It is no surprise that SPH had revenues of SGD 1.3 billion (USD 897 million at the current exchange rate) for the 2008 calendar year. SGD 1.3 billion is equivalent to every Singaporean giving SPH 0.71 cents 365 days of the year!

SPH net profit after taxation was a whopping SGD 436 million (USD 301 million). The net profit margin was 34%.

By way of comparison, the New York Times Company (NYT) which publishes 2 US national and 16 regional newspaper titles declared an operating loss in 2008. In its most recent profitable year (2007) it had a net margin of 6.5% and an operating margin of 7.2%. SPH’s operating margin was 37% in 2007.

One may argue that comparing NYT with SPH is flawed but both are media conglomerates with a focus on the print side of the business. Either way, the fact that SPH enjoys such a healthy profit margin in a globally struggling industry is indicative of its privileged monopoly position in Singapore.

I cannot conceive of another explanation.

Where does this leave the New Media? It creates opportunities but in a terribly difficult operating environment.

That the entire print media is controlled by a state organ means that diversity of opinion and debate suffers. In other words, there is an information gap which credible and responsible reporting can fill.

Given Singapore’s strict rules on the establishment and management of newspapers the only option available is the New Media, internet news sites including blogs.

Reliable reporting requires a viable operating structure which in turn necessitates regular revenues to support the structure. Without revenues no commercial enterprise survives or prospers. Therefore, the only conclusion one can draw is that online media sites must endeavour to be commercially viable.

In other words, such enterprises must be formed on the basis of being viable long term commercial businesses with enough resources to sustain operations until they generate positive cash flow. The revenues may come from advertising, selling quality content or via cross-subsidization from other businesses.

In February 2009, more than 2.5 million Singapore residents accessed the internet for an average of 21 hours. In sum, the internet has 3.1 million users in Singapore. Clearly, establishing a successful online media business is possible especially when one takes into account additional interest emanating from neighbouring countries and overseas Singaporeans.

It is time entrepreneurs step forward and make cash available to pioneers of the New Media. While the internet is not an especially costly operating environment human talent is not always cheap. When an internet start-up has to compete against monopoly media providers for hiring talent then the ability to pay reasonable salaries is crucial.

An internet media incubator might be a profitable way forward. In normal circumstances aggressive risk takers and financially savvy persons would have already established a few. The reason they have not already done so is quite Singapore specific.

The risks are perceived to be not only financial but also political. There is an acute feeling that the ‘establishment’ will frown upon any real expressions of independent political thought. Thus, pursuing a serious online media enterprise may result in legal repercussions for both the content manufacturers and the financial backers of the venture.

Government Minister Dr. Vivian Balakrishnan said in 2007 that, “Governments’ all over the world have already recognized one thing: absolutely no regulation is not an option. What they have to recognize is that a strong hand at censorship is also not possible. Drawing a reference line and letting the society and the Internet evolve together is perhaps the best approach.”

In internet time two years is a long time and the direction taken by the online media has evolved and clarified considerably since 2007. Online media is quickly breaking down barriers and will most likely be at the vanguard of a freer and more vibrant domestic media.

The government will do well to marry the positive forces of entrepreneurship and the New Media by encouraging its development in a responsible and coherent manner. The time is ripe for the government to come out with a clear statement encouraging responsible online media. The real carrot will be if the government suggests that private sector involvement in a deregulated media sector is possible within the next few years.

Conversely, it is time for ‘citizen journalists’ to take the challenge seriously and improve the quality and reliability of their content. A symbiotic relationship between the government and the new media can and should be a part of the new Singapore.

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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