SINGAPORE - A paid news model forces newsrooms to ensure that they are more analytical and provide insights that the competition cannot, said SPH Media Trust chairman Khaw Boon Wan.
Adopting either a free or paid subscription model for news products depends on the publications' objectives, and having a paid model puts higher pressure on newsrooms so they know that they are doing the right thing and delivering quality journalism, he said.
Mr Khaw, a former Cabinet Minister, was addressing a question on whether Singapore Press Holdings' (SPH) titles would continue with a subscription model post-restructuring at a press conference on Wednesday (May 12).
"If your objective is just to chase eyeballs, then the easiest (way) is to make (news) free," he said, noting that free content does not necessarily mean that it gets read.
On the other hand, a paid model puts a higher pressure on newsrooms so that they know they are doing the right thing and customers find their news products valuable, Mr Khaw said, citing how he is willing to pay for the likes of the Financial Times and The Economist because he finds their content compelling.
"But let me add that pricing is both a science and an art... there is sophistication in how you price the product, which takes into account the fact that much of the news out there is already for free.
"So if you insist on being paid and your product is just ordinary breaking news without much analysis or insight, why should people pay to buy your product?"
Mr Khaw stressed several times that a compelling product is key to getting subscriptions, especially with a new generation having different consumption habits and which is used to consuming things offered to them free of charge.
Converting outreach into serious digital revenue which can balance the decline in print media revenue is a severe challenge, he said.
Paid titles like the Financial Times also have a different market from SPH's titles, as they cater to the "world's elite", the former transport minister pointed out. But in Singapore, the newsrooms have nation-building objectives and the whole country's population to consider, "not just those who can afford to pay a $400 per year subscription".
"We have to think about how to structure the financing properly, it will take time. The Government understood that, and that is why their offer to help fund our operations while we build up scale is crucial," Mr Khaw said.
"Because without Government support, it's a fool's errand... It's impossible to solve this problem."
Expanding overseas audience
Overseas markets are also an important part of the new media entity's strategy, he noted, highlighting how the economics of delivering digital media become even more attractive once growth is beyond a certain scale.
Mr Khaw pointed to how The New York Times' prospects of profitability have improved as it grew its paid subscriptions as an example. He said: "You need a certain size beyond which when you continue to grow, your economics become more and more attractive."
But Singapore's limited market size - with some 1.2 million households - means that it would be crucial for newsrooms to look beyond its shores, as even a penetration level of 80 per cent, or one million households, "is not enough for us to hit a sustainable, financially comfortable level".
The prospects for SPH titles in the overseas markets are encouraging, Mr Khaw said, noting the positive brand that SPH's Chinese-language flagship Lianhe Zaobao has established in China.
"Can we do more? I certainly hope we can do that, and I hope to pump in resources to help them grow that market," he said, adding that the same applies to The Straits Times as well.
"It's hard work, we have to work at it, but it is not impossible."
Elaborating in Mandarin, Mr Khaw said that it is challenging to sell newspapers in foreign countries, given factors such as high capital costs and the possibility that not all foreign governments may welcome the move.
But there are fewer obstacles with digital media, he said. "If we can make good use of digital media, we can turn overseas markets into our own.
"My view is that we should look far and set our targets higher, and try our best to see how we can realise our goals."