SINGAPORE - Global trends that affect Singapore Press Holdings (SPH) publications' ability to monetise their gains in attracting and retaining readers on digital platforms are expected to persist and widen.
These trends - which affect SPH, Mediacorp, and the global media industry - will inevitably affect Singapore's vernacular papers, some of which have relatively small circulations.
And if they persist, there would be a profound, detrimental impact on the multiracial fabric of Singapore society, Minister for Communications and Information S. Iswaran told Parliament on Monday (May 10).
This is why the Government must take a long-term view and adopt measures to secure the sustainability of the local media, added Mr Iswaran, who was making a ministerial statement on SPH's proposal to hive off its media business into a not-for-profit entity.
"Without a responsible and high-quality local media, the quality of our public debate and discourse will be compromised, and we will slowly but inexorably become less cohesive as a society," he added.
Trends affecting SPH
In his statement, Mr Iswaran noted that SPH's overall reach and readership have never been higher, with SPH papers' total circulation growing by 5 per cent from 2017 to 2020. Within this period, The Straits Times' print and digital circulation has grown by about 20 per cent.
As at August last year, the daily average circulation of ST on print and digital platforms was 458,200, up from 386,100 a year ago. Digital circulation for ST, which was close to 300,000, exceeded that of print.
Lianhe Zaobao's daily average circulation on digital platforms has also grown to 44,500 at August 2020, up from 36,200 a year ago.
Significant investments have also been made to build digital capabilities and grow readership. This amounts to about $50 million a year for the last five years, said Mr Iswaran.
SPH has also equipped its newsrooms with a wider range of technology capabilities, such as data analytics and product development, modified operations to generate content around the clock, and been recognised internationally for its excellent data visualisation and interactive graphics, multimedia and photojournalism, added Mr Iswaran.
Last year, it emerged as the biggest winner at the Asian Media Awards, with The Straits Times and the Chinese Media Group earning accolades in breaking news, infographics and newspaper design, among others.
But despite rising readership, SPH's media business has been steadily losing revenue, said the minister.
Its media business has lost half its operating revenue in the past five years and posted its first ever loss of $11.4 million last year.
"The loss would have been deeper without the Government's Jobs Support Scheme (JSS) grant," added Mr Iswaran.
Trends expected to worsen
SPH expects these trends to persist and widen, with print advertising revenue falling as media consumption progressively shifts online, noted the minister.
"Rising digital advertising will not compensate for the fall in print advertising revenue. And there is limited scope to grow digital subscriptions given our small domestic market and global competition," he said.
These trends, which affect SPH, Mediacorp and the global media industry, will also be compounded by the lingering economic impact of Covid-19, with businesses cutting advertising spending and consumers reluctant to pay for content, he said, explaining the Government's support for SPH's proposal to restructure and transfer its media business, SPH Media, to a company limited by guarantee (CLG) pending shareholder approval.
His ministry had said last week that the Government is prepared to provide funding support to the CLG to help accelerate its digital transformation and build capabilities for the future.
Mr Iswaran also noted that SPH, as a listed company, has been under persistent pressure to account to shareholders for the poor financial performance of its media business.
The company has implemented several cost-cutting and retrenchment exercises in recent years, but SPH has assessed that any further cuts would impair its ability to maintain quality journalism, he said.
"SPH has also spoken of its constraints... to make significant and sustained investments in digital and newsroom capabilities, which may not yield near-term payoffs," he added.
"Hence, under the current structure, there is a serious risk that SPH's media capabilities will be hollowed out," said Mr Iswaran.
Without sustained investment in capacity building and a pivot to the digital space, its quality and circulation will fall, which will worsen financials and cause further disinvestments, he said.
"And the immediate pressure will inevitably be on our vernacular papers, some with relatively small circulations, which would have a profound, detrimental impact on the multiracial fabric of our society," he said.
"This is the sobering picture of what lies ahead if we fail to act now and take proactive steps."