Harmful or opportunistic?
Can two TV stations make it in Singapore or do we eliminate the competition? By Seah Chiang Nee, TheEdge, Singapore. Nov 24 edition, 2003.
Nov 28, 2003

In a spate of just a few days, Senior Minister Lee Kuan Yew and Information Minister Dr. Lee Boon Yang clearly opened Pandora's Box on media competition in Singapore. For his part, S.M. Lee wants that he wants the costly contest to stop or at least to ease to stem the bleeding.
Dr. Lee Boon Yang went a step further, essentially freeing the two media firms to, if they want, close loss-making ventures. If this leads to the return of media monopoly, it will be, of course, bad for consumers, advertisers and media employees.

So what are the merits of going back to strong no-competition profits? The government's overriding concern was TV's political role as conveyer of policies in a way the print media can't do. Financially speaking, it is right; Singapore Press Holdings (SPH) is bleeding, after losing almost all the $90m capital on its two TV channels, Channel U and I. In the last two years alone, losses were $84.8m.

SPH has told shareholders that losses will be capped at $150m, which at the current rate is roughly 18 months away. Its competitor, MediaCorp is faring no better. Its two major, more established channels - 5 and 8 - lost $71.7m in 2002 and $20.4m this year. It partly caused the government-owned TV giant (five channels) to delay a public listing for two years.

There's more blood. TODAY, MediaCorp's free newspaper, lost around S$10 million this year, down from $18.2m in 2002, while SPH's own freesheet STREATS (despite lower-cost base from sharing resources of its sister papers) lost $5.8m in the last fiscal, slightly less than the previous year. Future look(s) more dismal.

Easing or ending the debilitating contest will be instant medicine for both patients. Otherwise, there could well be a hike in media fees and or newspaper prices, or both.

Until now, Singapore's terrestrial TV stations have been free to viewers, though Singaporeans do pay a levy for each TV and radio set they own. Will the government begin charging cable operators - ultimately cable viewers separately as well to recoup costs of the media battle?

Media is a high cost business. The cost of newsprint for each copy of the Straits Times, is probably a dollar - which is more than the 65 cents readers pay for it each day. Yet the paper is profitable and only because advertisers in Singapore are subsidising its readers, a situation made possible by its monopoly.

Fierce competition ironically would mean readers paying for higher-priced newspapers or television shows. S.M. Lee's call to end the war is tempting to both media giants - at least for the short term. But is that the way we want our media companies to operate in the world?

Should we protect home grown media giants even against local competitors? How are they going to develop muscles and experience to compete against outsiders in the region if they can't even operate as oligopolies?

Protecting SPH and MediaCorp would be like putting them back into a birdcage from where they can watch other Singaporean companies doing business around the region. Clearly, the two media companies are not financial weaklings but lack the global experience that others have. They're good within Singapore's shores, not abroad.

But is Singapore, with just 4m people, too small for two TV players?
In some sense it is, but then so is it for other corporations like SIA, Singtel, DBS Bank, etc, which are making up for the small domestic base by expanding overseas. Why should it be different for a media company?

Just take a look at Hong Kong. Aside from its fiercely competitive print media, Hong Kong with a population of just 7.5 million people, has two private TV networks -TVB and ATV, each of them operating one English and one Chinese language. The four stations transmit 550 hours of programming weekly more than half of it locally-produced.

The HK government runs RTHK, which produces public affairs programmes, documentaries, magazines, dramas, variety and game shows, etc. which are transmitted on all four channels under their license conditions and most of the programmes are broadcast during prime time on the Chinese channels.

This is to ensure that private media competition does not ignore its political and educational roles. ETV, for example, utilises the transmission facilities of the domestic free television stations and is watched by most of the primary and secondary school students.

Under a free enterprise, Hong Kong has also become a major exporter of TV programmes. Export earnings from audio-visual production and related services alone amounted to US$53 million in 2001. Leading television station, TVB faces aggressive competition in the battle for viewers and eyeballs. There is competition from foreign channels, even mainland stations and from cable TV (more numerous than in Singapore).

There are four cable companies - HK Cable TV (68 channels), OCCW (26), TV Plus (12) and Yes TV (10 plus two video-on-demand) supplying a total of 116 channels.

Can we in Singapore afford to go backward instead of joining the global battle, especially with promises for overseas markets under a string of free-trade agreements and diversity of choice at home? I don't think so.
TheEdge Singapore