CurrentAffairs
Asian mediafaces economic challenges
By Sonia Kolesnikov,
UPI Business Correspondent
SINGAPORE, (UPI) -- Lower advertising expendituresand increasing competition are slowly changing the landscape oflocal media in Singapore and Malaysia. Each country's media companiesseem to be reacting differently to new economic challenges, eithercutting staffing sharply, charging money for previously free newspapers,or closing operations altogether. Across the board, consolidationis now a key word.
The global slowdown has taken its toll onthe local advertising market, resulting in most media reassessingits cost.
Media group, Singapore Press Holdings, whichhas a near monopoly on newspaper publishing in Singapore, posteda 17.6 percent drop in revenue for the six-month period endingMarch 1, due in large part to a reported 27.1 percent slide inprint advertising sales.
The company recently started to publisha smaller, The Straits Times, Singapore's leading newspaper. Italso recently consolidated two sections into one, leading to alower number of pages. Both moves are expected to save newsprintcosts.
The company has also cut its workforce,laying off 65 employees from the production department and theadministration and information technology division last week.A total of 132 workers were laid off since last June, leaving3,700.
Apart from The Straits Times, the groupalso publishes Business Times, the free paper, Streat, and a fewother publications in Chinese and Malay. Through its broadcastingarm, SPH MediaWorks, it also owns two TV stations (one in Englishand one in Chinese), and other media interests. Nearly three-quartersof the company's sales come from advertising, which has been hithard. Singapore's gross domestic product contracted 2 percentin 2001.
In fact, having branched out in differentmedia sectors, it has had to pull the plug on a few projects.Last year, it suspended publication of Project Eyeball, whichhad been the first integrated print and cyberspace news publicationin Singapore, citing severe market conditions.
It also restructured SPH AsiaOne, an Internetpublication, downsizing its Web publishing, e-shop and lifestylecontent business to focus on online news, careers and databaseservices. And earlier this year, it integrated TV Works, its English-languagechannel, with its more successful Mandarin channel, Channel U,managing to cut 18 percent of the workforce.
As a result of cost-cutting exercises, thegroup managed to beat market expectations when it announced interimresults for the six-month period ending March 1, when it posteda net profit of $89.1 million, still a 20.3 percent drop on theyear.
Analysts expect even more staff cuts incoming months.
"I heard SPH is now taking a seriouslook at Business Times and has set up a committee to review costthere.
They could be closing down on the numberof overseas bureaus," said a local media analyst, who requestedanonymity.
SPH would not comment on the rumors, butspokeswoman Esther Low said "SPH conducts regular reviewson all our products and businesses to ensure they remain viableand relevant in the changing economic and social landscape. Costmanagement is one of the factors to consider during such reviewexercises."
SPH's advertising revenues have been facingcompetition from state-owned broadcaster MediaCorp, which launchedToday, a free commuter paper, in late 2000. It competes with SPH'sfree Streats commuter newspaper.
Today has become the second most widelyread newspaper on the island. MediaCorp owns a 49.9 percent stakein the daily, while transportation company SMRT Corp owns 30.2percent and Singapore Telecommunication owns 19.9 percent
But the tabloid-format paper is still expectedto lose $11 million. To counter low advertising revenues for theweekend edition, the paper announced Monday it will launch a paid,revamped weekend edition.
Analysts believe this is a real gamble forthe paper, since circulation could fall and advertisers may notpay higher rates if circulation numbers drop.
The competition between SPH and MediaCorpdoes not stop at print, since SPH was granted two free-to-airtelevision channels. MediaCorp, whose TV stations command a 75percent share of total viewers in Singapore, shut down its CITYTV channel in January without giving any reason for the decision.It consolidated its sport and Chinese programs with some of itsother TV channels.
Press agencies have also been cutting costsand consolidating in Malaysia.
Malaysian publisher New Straits Times Pressannounced it was folding its business daily, The Business Times,into its flagship newspaper, the New Straits Times, starting June1. NSTP, 44 percent owned by infrastructure firm Malaysian ResourcesCorp Bhd, publishes five newspapers, including the English languageBT and the New Straits Times.
But while NSTP remains the largest newspaperpublisher in Malaysia, its flagship English paper has seen a steadydecline in circulation since 1993, with rival the Star soakingup most of whatever readership the New Straits Times lost. In2001, the Star's daily circulation of 290,000 copies was morethan twice that of The New Straits Times' 136,000-140,000.
This intense competition from Star's increasedcirculation and advertising market share has led management torevamp its broadsheet. The quality of content is being improvedby contributions from well-known and respected personnel pulledin as columnists to write for the newspaper.
The latest move, folding Business Timesinto New Straits Times, should help cut costs and boost the circulationof the New Straits Times daily. Business Times had a daily circulationof 7,000 copies.
According to a research note by OSK Research,the "two-in-one" plan to be a "bargain" forreaders and provide much stronger ground for competition.
Meanwhile, the smaller, privately ownedSun Media Corporation Sdn Bhd, which publishes The Sun newspaper,has also had to take aggressive cost-cutting measures to headoff the fall in advertising revenues, and has retrenched about296 of its 411 employees since the start of the year.
The Sun, with a daily circulation of 86,600,is the third largest English daily. At the same time, in a bidto boost circulation, the publisher started to offer the paperfree at 300 locations this month, among them office complexesand convenience stores, in major cities in Malaysia. The companyis also planning to subsidize subscription.
Yuen Chak Lee, analyst at Merrill Lynch,believes existing consumers will continue to favor The Star, likingits content better. However, for consumers who are buying TheNew Straits Times as a second paper, they could be tempted toopt for The Sun instead, Lee said.
"In the longer term, the success ofSun Mediacorp's strategies are difficult to be quantified as freepaper and subsidized subscriptions have not been used before inMalaysia," Lee added.