It is in the interest of Singapore and Singaporeans that local media continues to thrive and deliver quality journalism in the digital era, says the Ministry of Communications and Information in the following statement:
The Ministry of Communications and Information (MCI) has considered and supports the proposal by Singapore Press Holdings Limited (SPH Limited) to restructure itself and transfer its media business (SPH Media) to a company limited by guarantee (CLG), pending shareholder approval.
To help SPH Media accelerate its digital transformation and build capabilities for the future, the Government is prepared to provide funding support to the CLG.
Financial realities of the global print news media business
SPH's newsroom and its publications in the four official languages have been trusted sources of news for much of Singapore's history. Amidst growing fragmentation of the information landscape, their role in providing Singaporeans with timely, accurate and credible information is even more critical.
The importance of a reliable and credible local media has been especially evident in Singapore's fight against Covid-19. According to a YouGov study, seven in 10 Singaporeans said they trusted the local media's reporting on Covid-19. The continued growth of SPH Media's reach and readership confirms that its platforms remain valued news sources for Singapore residents.
However, the global print media industry has been severely disrupted. With the advent of the Internet and social media, it has come under immense stress. Competition for consumers' attention has also increased significantly.
Print advertising revenue has therefore been steadily declining as advertisers shift towards digital advertising. The challenge is most acute in small markets with high Internet penetration.
Our local print media has moved decisively online, and succeeded in garnering high and growing page views. But it is a challenge to convert that into a viable revenue-generating model because on the Internet, information is largely free, and Internet platforms like Google and Facebook take the lion's share of online advertising revenue.
This is a structural issue faced by media companies worldwide. The financial viability and profitability of print media have been severely affected, a trend exacerbated by Covid-19. This has immediate and severe impact on the ability to sustain the quality of journalism.
SPH Media's financial performance and outlook reflect these secular trends. Despite total circulation holding steady, with digital circulation growing to offset the fall in print circulation, its profit margins have narrowed considerably over the years.
Under SPH Limited, SPH Media has, over the years, made substantial progress transforming itself for the digital era. However, SPH Limited's obligations as a listed company will constrain its ability to continue investing in the media business, given the adverse financial outlook for the industry. To ensure SPH Media's long-term viability, SPH Limited has proposed to transfer it to a CLG, which will no longer be managed by nor be part of SPH Limited, the listed company.
Government's support for local print media business
MCI supports SPH Limited's proposal. It is in the interest of Singapore and Singaporeans that our local media continues to thrive and deliver quality journalism. We note that the transfer is subject to shareholder approval. MCI will be consulting SPH Limited's management shareholders, who have long served as the custodians of SPH Media on behalf of Singapore and Singaporeans, on the next steps, including the formation of the CLG.
After SPH Media is transferred to a CLG, MCI is prepared to provide it with funding support to help it build capabilities for the future.
Mr S. Iswaran, Minister for Communications and Information, said: "A professional, capable and respected local news media is critical to our national interest. They must continue to be trusted by Singaporeans as a reliable and objective source of news, reporting on domestic and overseas events, as well as on the diversity of views that Singaporeans hold. They report through a Singaporean lens, so that our citizens have a good understanding of the opportunities and challenges facing our country, the choices we need to make, and our place in the world. The Government therefore supports high-quality, credible journalism in our local news media.
"SPH Board and management have concluded that the current media business model within a listed company structure is not viable, given global technology and industry trends, and the need for significant investments in digitalisation and capability development.
"The Government agrees with this assessment. We are supportive of SPH's proposal to restructure and transfer SPH Media to the CLG. Our goal is to help the local news media and our journalists adapt and thrive in the digital era, while maintaining the high professional standards we expect and value. The Government is also prepared to provide SPH Media with funding support, with fiscal discipline and accountability for outcomes in areas like digital innovation and capability development, as part of a long-term sustainable business plan.
"This restructuring of SPH Media, and future government support for it, will help to strengthen SPH Media in continuing its important role in Singapore's media scene."
The Minister for Communications and Information will deliver a ministerial statement on this subject at the next Parliament sitting next Monday.