By Dr Lai Kok Fung / Image credit: ST
In the recent ranking by Reporters Without Borders, Singapore fell 14 places to a record 149th position in terms of press freedom. Responding to media, Prime Minister Lee Hsien Loong said he does not take seriously Singapore’s low rankings, as he believes the way the media here is managed “makes sense” for the country.
Let’s explore this topic from the angle of innovation. Specifically, let’s ask whether the lack of press freedom and diversity hinders the growth of innovation, a crucial element in our next phase of development.
I compare Singapore Press Holdings, the dominant media company in Singapore, to Naspers, a similarly dominant media group based in South Africa. In the RWB report, South Africa, where “freedom of information is reality”, is ranked at 52nd.
In recent results released by SPH, revenue from core newspaper and magazine business continues the long gradual slide, declining 4% Year over Year (YoY) quarterly, and 24.2% YoY half-yearly. Its revenue and income would have slid more if not for the contribution of the property division. In fact, SPH has increasingly depended on property business to shore up its financials, and has even started calling itself a “media and property group”.
Naspers was founded as De Nationale Pers (The National Press) in 1915. As its publishing business expanded, it became a staunch supporter of apartheid. After the country’s rebirth under Mandela, Naspers listed on the Johannesburg Stock Exchange in 1994. It expanded into paid television, Internet media, and recently, eCommerce.
Today, it is a dominant Internet player in the emerging markets, and holds significant stakes in Tencent (“QQ”) in China and Mail.ru in Russia. In 2013, its revenue rose by 28%, led by 76% growth in the Internet segment. Its annual revenue at S$3.5B is 3 times of SPH, and market valuation at S$53B, 8 times. Not surprisingly, the market ascribes more values on Naspers’ Internet business versus SPH’s property business.
In making this comparison, one must consider that SPH is not just another commercial entity, but a pseudo media monopoly protected by the Singapore Newspaper and Printing Presses Act. From this privileged position, it has a moral obligation to improve the nation’s competitiveness in the relevant industry. Unfortunately, it has not shown success like Naspers. Even its acquisitions of local Internet companies like HardwareZone and sgCarMart, simply eliminated competitions rather than strengthening innovation.
As a data point, consider digital advertising. In 2013, for the first time, US marketers spent more online than on broadcast television. In Singapore, local media companies capture very small shares of digital budget, with majority controlled by US companies like Google and Facebook. In contrast, Naspers’ Media24 is a “do-not-miss” channel for many digital marketers in South Africa. Apparently, stiff competition has forced Naspers out of comfort zone to innovate at home and abroad.
Worryingly, many digital media professionals will agree that Singapore lacks the vibrancy of other South East Asia countries like Indonesia, Thailand and Malaysia. Can we afford to fall behind any further?
To start, I believe that any company protected under the Act should solely be measured by its media business. In addition, the time may have arrived to inject more diversity into the local media scene. Singapore’s media professionals are more than capable to meet any competitions that may arise as a result.
Finally, we should seriously consider whether what made sense in the past continues to be so, especially in the backdrop of rapid changes brought about by technology innovation.
About the Author:
Dr Lai Kok Fung is currently CEO of BuzzCity, a Singapore-based multinational company specialized in mobile advertising. He is also Adjunct Professor in the School of Computer Science, National University of Singapore. He started his career as an applied researcher in Information Technology Institute, a now-defunct applied research institute funded by the government of Singapore.
SPH and Naspers were former shareholders of BuzzCity. They contributed capital in different but equally crucial stages of the company’s development.