Legacy media organisations are paying the price for slow pivot to digital disruption, experts say

Coping with digital disruption is a conundrum that has plagued many traditional news publishers.

Coping with digital disruption is a conundrum that has plagued many news publishers in Asia Pacific because even though their industry was disrupted a decade ago, they failed to respond quickly enough to make the changes needed for digital transformation.

Singapore Press Holdings, the main newspaper company in Singapore, and Mediacorp, the state-owned broadcaster, have both struggled to increase advertising revenue over the past couple of years even though they have experimented with branded content labs, startup innovation labs and diversifying into properties.

It has resulted in a 45% slide in shares for SPH, whose stocks were once bigger than The New York Times, and it is also considering retrenchment as it reorganises its business.

For Mediacorp, it had to cease the print edition of its free broadsheet Today after 17 years to go fully digital, retrenching 40 staff earlier this year. SPH meanwhile, had to close its failed broadcast venture and has been steadily trimming its workforce since 2001.

News publishers around Asia Pacific have also not been spared, with the likes of Wall Street Journal and Campaign ceasing the print edition of their Asian publications to go fully online this year.

In other regions, Time Inc and Wenner Media, publishers of Marie Clarie and Rolling Stones respectively, are also being forced to sell off or close publications because of a lack of advertising revenue.

These moves are a result of the entry of disruptive global and local newcomers, such as Spotify and Netflix, diverting eyeballs from these news publishers with its slate of fresh content, while Google and Facebook have snatched advertising dollars with their dominance of the ad industry.

The slow pivot to these challenges by legacy organisations like Mediacorp, SPH and WSJ could also be due to traditional larger structures with shareholders, unlike more independent startup founders, and a fear that too much change and too soon, will upset their entrenched, wide audience market.

For example, Mediacorp embarked on experimenting with new digital initiatives like Toggle, Reebonz and a digital-first newsroom between 2012 and 2014. When these resonated with its audiences and customers, the broadcaster then started implementing it fully between 2014 and 2016. Having gained traction and increased traffic through page views and unique visitors, the third phase of monetising its digital assets is only just beginning.

In contrast, it took Netflix less than a year in 2007 to fully pivot from its original model of DVD subscriptions to online video streaming, before launching its streaming service internationally within the next four years. It then started producing House of Cards, its first-ever original content in 2013.

Former Yahoo! Singapore managing editor Alan Soon tells The Drum that Mediacorp's cautious approach is a good example of why legacy publishers are facing a declining readership online and as a result, are losing advertising dollars.

“Everything begins with readership. You cannot make something out of nothing. The pool is getting smaller and the money is going off to Facebook and Google,” Soon explains.

Stephen Tompkins, head of activation in Asia Pacific at Essence, concurs with Soon, but notes that preparing for digital disruption is no small feat and it is something most business enterprises have struggled with it in their own way, not just publishers.

However, he asserts that publishers were slow to adapt to this new medium because they often overestimated applying legacy models to a new medium, causing a variety of issues that needed to be solved long-term.

"Firstly, many publishers embarked on a digital advertising journey, treating it as an arms race to monetize pages. This, unfortunately, resulted in slower websites, cluttered content and poor user experiences," explains Tompkins.

"Secondly, publishers purchased traffic from vendors or built sophisticated daisy chains for inventory. This diluted transparency and incentivised shady actors to seek monetary gains.

"Had they developed and understood the audiences on the site, they could have improved the UX, gaining a better understanding of their consumer desires in the digital landscape.

"Thirdly, publishers didn't want to provide full transparency, which incentivised fraudsters who took advantage of closed models for monetary gains."

While these publishers were quick to recognise changing media consumption habits and provide digital offerings, they took a long time to integrate their print and digital teams because they did not have complementary targets such as driving print advertising revenue or traffic to the news sites, says Mimrah Mahmood, regional director for media solutions in Asia Pacific at Meltwater.

"Unified KPIs are key to enabling teams to operate as a single unit that is more efficient in monetising advertising across traditional and digital platforms," he says. "This also enables staff to be more nimble and pivot towards advertisers and consumers needs."

Soon, who recently launched The Spice Newsroom, a service that reports on the digital transformation of media and journalism, says traditional news publishers should question themselves if they are offering content that people want and need.

He warns that if they are just building a mass audience for the sake of building a mass audience, the digital world will destroy them.

“The Internet is by nature a long tail beast — it caters to every niche interest that’s out there. A mass media company simply can’t compete against that,” asserts Soon, adding that to survive, both companies need a purpose and a mission, and ask: “What can I provide my audience or customer that no one else can? Who’s my audience? What do they need? What’s the best way to serve them? Nothing else matters until they can get those three questions right," he says.

Soon recommends publishers to look at the example of Alibaba-owned, Hong Kong-based South China Morning Post, which doubled its number of unique users after lifting its paywall and received nearly seven million unique views in August this year, to learn about digital transformation.

“Keep an eye on what SCMP is doing”, adds Soon. “They are driven to create the best experience for their audience and that’s going to have a powerful effect on the rest of the region. Chief executive Gary Liu has the right smarts to reshape how this industry works.”

Mimrah on the other hand, urges publishers to look at the freemium model which has the ability to leverage every avenue to get more eyeballs on the content to better integrate with the 'new sheriffs of media' like Google, Facebook, Baidu and Tencent. He feels that publishers would have benefited from negotiating with these new media owners to get better rates earlier on, as well as longer-term commitments as they are now competing with, and are sometimes at the mercy of these technology companies.

One promising move that Mediacorp has made already to streamline its business offerings to continue to be attractive to advertisers, is hiring Parminder Singh, former managing director for Twitter in Asia Pacific, in a newly-created role of chief commercial and digital officer.

The roles used to be split, with Shane Mitchell holding the role of head of digital and Jack Lim in the role of chief commercial officer. It also hired Nick Fawbert as head of digital enterprise in 2014 to improve its digital capabilities. However, Mitchell and Lim left after two years, while Fawbet departed after just six months.

Helping Mediacorp form a programmatic alliance with SPH was Singh’s first big move after joining the company, before he helped launched Bloomr.SG, which aims to help content creators in Singapore produce creative formats in original content and brand storytelling for content creation, a sign the media company is slowly adapting to the experienced digital marketer’s methods.

Soon feels that by hiring Singh, Mediacorp finally understands that it needs to start offering a single solution to advertisers. “It’s interesting to see that Singh holds those two roles - it’s a recognition that you can’t be selling just analog these days,” notes Soon.

Meanwhile, James Sampson, vice president and general manager for data and analytics technology company dataxu in Asia Pacific, tells The Drum that the Mediacorp-SPH programmatic alliance will allow both companies to provide advertisers with new, high-quality information and ways to reach the Singapore population beyond what they may currently get elsewhere.

He explains that this alliance shows that both companies are adapting, as more of their offerings are consumed digitally, which gives them the ability to know more about their audiences, and better compete with Google-Facebook. It also equips them with new audience-based media offerings because of their combined understanding of their common and net new audiences.

“With digital devices accounting for the majority of consumers’ attention time, significant and mega audience owners, which know and provide the most about their audiences, are becoming the channels demanded by marketers,” says Sampson.

“You see non-media based companies (ecommerce providers, consumer internet services, telcos, etc.) evolving to offer media products as new revenue streams on the backs of their deep and actionable understanding of their consumers.”

For the alliance to be successful, Mimrah says both SPH and Mediacorp will need to invest heavily in 5G internet speeds to determine their positioning and footprint in this new ecosystem.

"The speeds we’re talking about will revolutionise the way we consume media content and the experiences that are possible over the internet. 5G will allow Internet of Things to be fully integrated with the consumer behaviour," he explains.

Soon has a piece of advice for brands, businesses and media owners who are keen to learn from news publishers' mistakes: “Move fast. There’s no denying that this industry is getting disrupted from all sides. Just because there’s still some money in print and TV does not mean you hold on to that with your dear life. The best time to change is before you need to.”

SPH has made moves on its own recently, incorporating a new company called Fastco Pte Ltd in July to ‘develop software for interactive digital media and investment holding’, while it recently signed a partnership with Business Insider to operate its Singapore and Malaysia editions.

The Drum reached out to SPH for its thoughts on its digital transformation journey, but a spokesman replied that the organisation will not comment on this subject. Mediacorp on the other hand, tells The Drum that it reaches over 97% of people in Singapore a week through multiple platforms including TV, radio, digital and out-of-home.

Its ability to operate, produce and collaborate in a digital ecosystem is a strategic imperative, while initiatives like SMX and Bloomr.sg are part of Mediacorp's decisive move into digital, explains Karen Yew, head of brand and communications at Mediacorp.

"We run some of the most popular web destinations of Singapore like Toggle and Channel NewsAsia that continue to see tremendous growth, and we’re investing significantly in all our digital offerings to deliver a great experience to our users and business partners," adds Yew.

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Shawn Lim

Shawn Lim is a reporter at The Drum, covering industry news around the Asia Pacific region with a focus on Singapore and Southeast Asia. Based in Singapore, he has worked across photography, video and online, covering a range of subjects including current affairs and sports.

Before Game of Thrones, he was a huge Breaking Bad fan. He does CrossFit and yoga to stay healthy.

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