Singapore Press Holdings (SPH) has retrenched a number of personnel in its advertising arm and magazines operations as the ongoing Covid-19 pandemic decimates advertising revenue.
The media conglomerate will let go of 140 marketers and editorial personnel from its Media Solutions Division (MSD) and SPH Magazines, about 5% of the overall Media Group’s headcount, incurring retrenchment costs of approximately $8 million.
"Subscriptions and readership of our news titles have increased since the onset of Covid-19. However, the economic downturn has significantly impacted our advertising revenue. A more integrated approach of producing and selling our content across our various platforms will allow us to deal more efficiently and effectively with the new level of demand we are seeing from our advertisers and audience,” said Ng Yat Chung, the chief executive officer of SPH.
Why is this happening?
- In March, SPH announced that its directors, chief executive officer and senior management would take a voluntary pay cut of 10% and 5% respectively.
- SPH warned shareholders in March that its operating profit for the year ending 31 August is expected to be "significantly lower" than the S$187m recorded in 2019, because of the Covid-19 crisis.
- SPH began reviewing its media business in 2019 to provide advertisers with more marketing solutions through an integrated sales approach across its different platforms and titles.
- It brought together its magazine titles and radio audiences with its newspaper titles audiences. It has also rolled out self-service options for advertisers to customise their campaigns.
- SPH was already struggling with ad revenue before Covid-19. In October 2017, 130 staff, including some from the newsrooms and integrated marketing division were let go. Last year, 130 employees from its media solutions division, magazines and smaller subsidiaries were let go.
- SPH’s struggles come at a time when experts warn publishers that advertising cannot be the only source of revenue and that a subscription model is the way forward. SPH previously enacted a metered paywall on The Straits Times, before changing to a model that allows only subscribers to have access to its premium stories.
- Like publishers around the world, SPH has been unable to compete with the likes of Facebook and Google on a global and local scale as advertisers turn to the ad giants for speed and scale of innovation. This has seen the digital duopoly dominate ad revenue.
- It had tried to stem the bleeding by collaborating with Mediacorp on a joint venture called Singapore Media Exchange (SMX), a programmatic advertising trade desk alliance.
- However, according to sources, SMX has not fulfilled its potential yet as both parties have yet to solve a number of roadblocks. This has seen SPH go to Google to create a joint business plan to grow digital advertising revenue, hunt for subscription audiences in new platforms and develop their digital video content business.
- While some publishers have turned to membership, events, or even online training, SPH has instead turned to investing in property to survive. The property segment now forms two-thirds of SPH’s profits.
- It delivered higher steady income stream for SPH from the acquisitions of SPH Reit, Figtree Grove in Australia and the Rail Mall. SPH also expanded its UK student accommodation portfolio to S$369m with two smaller assets in Lincoln and Glasgow. It also owns the residential property in Singapore called Woodleigh Residences.