At last, some bravado from an
otherwise timid Singapore News Reporters.
The following is an article from the Straits Times, 15 November
2003 that will give some food for thought if 'More Media Companies
work better than Less'.
MEDIA SLUGFEST:
INSIGHT: Kill or
keel over?
When not one but two political leaders this week wondered aloud
whether media competition here can be sustained, they caused a
stir. Is the market really too small for two players in both print
and television? Should it revert to just one player in each medium?
What's next for the media scene? TAN TARN HOW, LYDIA LIM and EDNA
KOH report
IS THE television market too small for two players? Senior Minister
Lee Kuan Yew thought so when he commented on the 'haemorrhaging' of
the two broadcasters.
He did not think it was possible for MediaCorp and MediaWorks, the
broadcasting subsidiary of Singapore Press Holdings, to stop the
bleeding (see story below). 'I think both are going to keep on
losing,' he said in a television interview this week.
Information, Communications and the Arts Minister Lee Boon Yang was
less direct but suggested as much when he said that while the
Government favoured competition, 'we are also realistic and if
competition does not work, then, well, we have to accept that the
market is just too small to accept more than one significant
player'.
MediaCorp took the line further in a statement reacting to the
ministers and argued that even before the 2000 liberalisation,
excess air-time, or unfilled advertising slots, on its Channels 5,
8 and others, showed that the supply for space exceeded demand from
advertisers.
But most media analysts and watchers are not persuaded by this
argument.
Dismissing it emphatically, analyst Christopher Sanda of securities
firm DBS Vickers says: 'MediaCorp is completely wrong.'
Both MediaWorks and MediaCorp are
hurting because the rates they charge for advertisements have gone
below cost, he says. 'When you do that, whether you
are selling cars or watches or nasi lemak, you are going to
generate losses.'
Managing director Gan Boon Guan of OMD Singapore, which helps
companies place ads, agrees. He reveals that ad rates have gone
down by as much as 50 per cent since competition began in 2000, but
especially in the last year, when total advertising spending shrank
in a shaky economy.
Why this seeming suicide?
Mr Sanda and Mr Gan say it is all about getting market share and
wiping out the opposition.
In a game of kill or keel over, losses for a few years matter not
as the battle is for the long term.
Being top dog is key because when it comes to television
advertising budgets, says Mr Gan, companies think this way: 'I can
afford to not use the No. 2 but cannot afford not to go to the
leader.'
That Singapore Press Holdings is hugely profitable, he, like many
others argue, indicates that the advertising market is big enough
for two or even more players, even in television, to aim for a
share of it, if not enlarge it.
'The pie for television is an imaginary pie. Both MediaWorks and
MediaCorp should be fighting for a bigger share of the total ad
pie,' says Mr Gan.
Radio, for example, shows how this can work. Since liberalisation,
it has more than doubled its ad market share to 9.3 per cent.
Singapore is very much an anomaly with newspapers getting the
lion's share of advertising revenue compared with television, which
gets only 30 to 40 per cent. 'In Taiwan and Thailand, for example,
television gets over half the pie,' he says.
COMPETITION CAN
WORK
ANALYSTS also draw comparisons
with the thriving and profitable media markets in small countries
and cities in the United States with populations of roughly the
same size as Singapore's.
Assistant Professor Mark Cenite of the Nanyang Technological
University's school of communication and information, says that in
the cities of Denver and Minneapolis - which have
television-viewing populations of about three million people each -
at least five broadcasters slug it out.
New Zealand is another good example.
Like Singapore, it has a population of about four million people.
It supports four major media groups and all are
profitable.
The two broadcasters are state-owned TVNZ and Canadian-owned
CanWest. In the last financial year, they enjoyed net earnings of
NZ$29.1 million (S$31.7 million) and NZ$28.5 million
respectively.
And even Uruguay, in South America, has four television stations,
one state-owned and three private, though Insight was not able to
obtain their earnings figures.
But the Singapore situation has at least one equivalent -
Ireland's.
Its first and only commercial free-to-air television station, TV 3,
has been in the red since its launch five years ago.
TV 3 says this is because its state-owed rival, RTE, engages in
predatory pricing of air-time for commercials, a charge that RTE
has denied.
Not everyone agrees that low ad rates is to be blamed for the state
of affairs in Singapore.
Some media experts point the
finger at management for lacking the creativity and ingenuity to
harness the revenue potential of television.
Political analyst and media watcher Seah Chiang Nee believes that
part of the reason for the stagnation is that both MediaWorks and
MediaCorp's management have failed to seize opportunities: 'The
market is not too small if they can produce shows that can also be
shown abroad. They need to create new markets.'
Mr Arun Mahizhnan, a media expert and deputy director of think-tank
Institute of Policy Studies, agrees: 'The conceptualisation of the
market is where the problem is.'
Both are producing the same products and aiming at the same market
without sufficient differentiation, he says, noting that the pie
usually grows following any case of deregulation, which has not
happened here.
The multiple facelifts at MediaWorks' English-language Channel i
shows the lack of vision on the part of management, say some
watchers.
Political observer Sharon
Siddique describes it as 'a lack of vision, a clear idea of what to
do'.
'The idea at MediaWorks that you are going to carry newspaper
material onto television has not worked out very well, in the sense
that print and broadcast journalism are very different and few have
straddled that well.'
'The chopping and changing has been costly.'
DIFFICULT TO BE
DIFFERENT
MR MAHIZHNAN argues that the so-called liberalisation is, in
effect, a very controlled experiment and did not produce real
competition.
Both companies are predominant print or broadcaster outfits
dabbling in one another's business.
'We should not even have thought of these two media organisations
when giving out the new licences, but give them instead to a new
company as these two need not be the best,' he says.
Others claim that the stations' financial woes are also due to the
strict rules on content, especially for entertainment, that tie the
hands of stations in standing out and drawing new audiences.
Mr Seah says: 'Television is more sensitive and conservative; it's
'this cannot, that cannot'. So it's hard to grow.'
Sociologist Chua Beng Huat says competition forces survival via
'differentiating yourself', which means 'escalate the commentaries,
keep jazzing up the content'.
'But the Government is afraid of the escalation of competition
because in trying to make yourself more readable, you have to be a
lot more critical.'
That is what's really behind Dr Lee Boon Yang's warning to the
local media that they should not mix comment with news, he says.
'The bleeding stuff was just an excuse' to reiterate media policy
in Singapore.
Observers such as Dr Chua say
that the restrictions in media policy and laws make it difficult
for the media companies to experiment and be creative.
Ms Siddique sums it up: 'In trying to be distinctive, are the OB
markers flexible for them to be distinctive? How different can the
products be?'
http://straitstimes.asia1.com.sg/singapore/story/0,4386,220081,00.html?
