Moving slightly ahead
For now at least when economic weakness hits everyone's bottom line the side that started off with more muscles and prepared to buy talent is asserting itself. By Seah Chiang Nee
Dec 15, 2002

In a weak market, the growing rivalry between Singapore's two media owners is shifting in favour to the side with stronger resources and hotter ideas.

Tomorrow may be another day, but for now at least, financially-strong Singapore Press Holdings (SPH) seems to be moving ahead of the media war, reaping the benefits of its large manpower resources and ready funds.

Last week, Channel I and Channel U, launched by its TV arm, MediaWorks only 18 months ago, swept six awards in the 7th Asian Television Awards ceremony.

They included the two most prestigious prizes, Terrestrial Channel Of The year and Broadcaster Of The Year.

It was double the three won by MediaCorp, its government-owned rival, which had dominated the TV scene in Singapore for decades.

This operator of five TV and most of the city's radio stations, had been used to winning Asia's TV awards year after year.

This achievement is for only a single occasion. This means, of course, that its bigger, more experienced, opponent - with its own awesome strengths - can fight back and reverse the result.

But for a novice of only one-and-a-half-years, it is an exceptional one - attributed to the parent's financial commitment and its TV people's performances.

These stations are still loss makers and not expected to turn the corner until 2005 if the economy does not worsen.

Apart from its awards and improving market shares are providing a moral-booster to their workers who worry about the prospect of being closed down.

After all, its parent body had said it was capping its TV investment at not more than S$150 million.

The TV venture, launched in a weakening advertisement market, has proved a costly exercise for parent SPH, which also owns the Straits Times and all Singapore's eight other newspapers.

It has invested S$90 million on television. The two stations began scouting for talent, buying over some of its rival's stars and sourcing for new popular shows from abroad.

Quietly, they have been gaining on viewer and advertisement shares.

"A player without SPH's deep pockets would have folded," said an industry source.

The contest is part of the government's media liberation move two years ago to allow for limited competition between SPH and MediaCorp.

The latter was given a licence to produce a daily (named TODAY) to compete with the SPH, which in turn was allowed to start two TV stations and a newspaper (Streats).

Since then, both sides had been working hard to raise standards even as the economic recession bit deeper.

To reduce the escalating costs, both companies had to reduce staffs.

In Nov last year, SPH lay off 96 staff, pruning 20% of jobs at its loss-making television and Internet arm. Then in Jan, MediaCorp retrenched some 200 or 7% of its employees.

While the competition has made for happier consumers - viewers and advertisers - bosses of neither side are too exuberant about the state of competition in this tough market.

Only last month, in a departing press interview, the executive chairman of SPH, Mr. Lim Kim San, lamented about the high cost of competition.

Asked if he was open to the idea of broadcaster MediaCorp giving up its TV licence, Lim said: "I'm open to any sensible suggestion - and I think this is a sensible suggestion. We are bleeding. Both (rival newspapers) Streats and Today are bleeding.

"And in TV we are also bleeding. So we are wasting our resources."

Such competition is fine in a big market because it raises standards and quality. "You fight each other to become more competent and more productive and more efficient." he said.

"That's what the Japanese do - but they have got the population of over 100 million."

Singapore has a population of only 4 million. What worried him was the shrinking advertisement pie. "I don't see two TV licensees breaking even."

The newspaper rivalry is also hotting up.

The two competing tabloids, TODAY and Streats, distributed freely at transit railway stations, have moved slightly up-market to fight for advertisements.

Recently, TODAY started selling its weekend edition for 50 cents.

Its stories were better written, slightly longer than before and moving away from flippant news. This new formula seemed to have succeeded in attracting more serious readers.

Market sources say that with its circulation of more than 200,000 copies a day, it has been winning win over advertisers from The Business Times, hit by a poor stock market.

In addition, TODAY has the backing of a government, which is keen to ensure some competition continues as well as public sympathy the way an underdog would.

But of late, Streats has fought back well.

With several top journalists transferred there from other SPH papers, it revamped itself, covered more serious articles and began breaking more stories.

More importantly, it is delivered to the home in a manner that is impossible for TODAY to match. Streats is delivered free with every copy of the Straits Times, Business Times and Lianhe Zaobao (Chinese.)

When I was starting up on the Monitor some 20 years ago, one of the options we had rejected was a free newspaper.

One disadvantage, we thought, was the lack of readership continuity, let alone loyalty, because readers would seldom get every issue of the newspaper.

Commuters who arrived at train stations late often found the stands for TODAY and Streats empty.

Some would get them several days a week; others, who don't use public transport, virtually not at all.

Streats has now solved this problem by delivering it to the homes with the Straits Times. "For some advertisers, it's like a Straits Times supplement but at much cheaper rates," one staff member said.

So who is winning the competition? It depends on whom you talk to and where his sympathy lies.

The only answer must rightly come from the marketplace of buyers, but since both are free newspapers, whatever judgement remains subjective.

A price tag may happen one day, though. All these editorial improvements are promoting readership loyalty in preparation for the day they can begin charging.

But in these hard times, the public is quite happy to get newspapers free and with improving qualities.

If some commentators are right, some retrenched families have begun to cancel their Straits Times - now that can get hold of free tabloids.

Adding up the costs - direct and indirect - to their bottom lines is giving media bosses a ringing headache.
(This ariticle was published in Sunday Star, Dec 15, 2002.)