Straits Times online
Charging visitors
No need to get angry; paying digital newspapers will launch frontierless world without press controls. My own response is... By Seah Chiang Nee
Feb 28, 2008

I'm amazed that so many people are surprised by the decision to charge Straits Times online.

The warning had appeared last November when SPH (Singapore Press Holdings) required visitors to, its newspapers' website, to register.

Littlespeck then wrote "Asia One: Heading for charges" on Nov 8, 2004, forecasting this. Readers who had followed our postings would not have been surprised by this or the trend regarding newspapers.

As a newspaper editor in Singapore and a long-time correspondent for some years, I could see the creeping impact of the Internet on newspaper circulations clearer than most readers.

Young people are slowly giving up reading newspapers because of the access to web newspapers and other online news sources. These trends were in these recent Littlespeck reports:

Media: The future is online, AP chief, on Nov 14, 2004,
Another Looming Shadow - losing youths on Oct 2, 2004, and
Regaining readership on Sept 19, 2004..

Online charges: Too high

The step taken by the 160-year-old Straits Times is recognition that the future is swinging towards multimedia information. The print circulation had largely stagnated during the past 10 years despite the population expansion.

It is vulnerable because it had just raised its print price to 70 cents (for subscribers). If its website remains free, it will lose more readers switching to AsiaOne.

But the costs of printing the Straits Times (newsprint price, ink, machine maintenance and salaries, etc) will make for a tremendous saving when that happens.

In fact the production cost per copy is more than its sale price, and it is the advertisments are what make it hugely profitable. (Yes, for years, advertisers have been subsidising readers' costs).

This means that even though the online price is 30 cents, 40 cents lower than print price, the saving on newsprint will more than makje up for it.

This means that if the more readers stop buying ST and start reading online, the more circulation profit it will earn. Nothing, however, is that simple. If it were, other major newspapers would done that long before the Straits Times.

Possible pitfall

SPH sells newspapers. Its flagship is the Straits Times that makes tons of money with a daily circulation of 390,000 copies. The real money-earner is advertising whose rates are based on this vast monopoly (thus secure) base.

There are more than 250,000 Singaporeans with cable access to the Internet, and the number of registered AsiaOne readers is 280,000 (some 30,000 from abroad).

If a large number of its 390,000 readers - say 100,000-150,000 - were to stop buying the newspaper and moving online, its subscription circulation profit will rise, but advertisers may leave or demand lower rates.

Overall profits may skid disastrously - unless it can lure more online readers either locally or from abroad.

This is because - monopoly or not - advertisers will not pay current advertising rates if sales fall by, say 25 per cent. Many will turn to other media sources, like TV, radio, magazines, cinemas and, of course, the Internet.

Advertising on the Straits Times website, which should increase with a larger base, will not be able to make up for the print advertisements.

In a recent US media seminar, publishers lamented that demand for Internet advertising was rising, but most online newspapers simply did not have enough page space or number of pages to accommodate it.

The possibility of vast newspaper defections to its webite is unlikely in the immediate future. The reason? Out of annoyance, Singaporeans are liable to refuse to subscribe online.

So what would I do? Personally I would stop delivery and pay online for the 50 per cent saving, and I would urge readers who have unlimited cable to do the same especially if they don't need the advertisements most of the time.

To talk of boycotting domestic news is not a long term solution.

Besides by buying online, I will be doing my small towards creation of a new, cross-frontier world of Internet newspapers, in which the Straits Times is a member.

By offering two choices, print and online, the Straits Times is actually being forced to take on the world by trying to gain foreign subscribers. Of course, that would also quickly mean Singaporean digital newspapers based abroad selling here.

Singapore is in a free-trade-agreement mood that must provide for a borderless Internet media.

Straits Times online permits foreign buyers without outside control but it would almost mean multi-media publishers to compete against it on domestic coverage, free of Singapore government licensing.

For example, the historical adversity that disallows Malaysia and Singapore print newspapers to enter each other's country, but the new digital media would make the ban unenforceable.

History is rarely created in a day. it has to have a first step, though. The selling of Straits Times online would be it.

By Seah Chiang Nee