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Speech by Mr Khaw Boon Wan, Chairman-Designate of SPH Media Trust

SPEECH BY MR KHAW BOON WAN, CHAIRMAN OF SPH MEDIA TRUST
PRESS CONFERENCE FOR SPH MEDIA TRUST, 12 MAY 2021


“A New Chapter: Transforming SPH Media for the Digital Era”

1.       SPH Media’s flagships, ST, ZB, BH and TM, are important institutions. They record our history, with comprehensive coverage of local news in all four languages. They have helped to unite us as one people and impart important values to our young. They also cover global events and interpret them for our people, providing the Singapore perspective and presenting the Singapore voice to the world. 

2.       We are proud of these publications, and the newsrooms that produce them. The talent in our newsrooms has created high-quality products that have won the trust of readers.

3.       The digital revolution has, however, severely disrupted the media industry. Their economics have been turned upside down. First, platforms like Facebook and Google have taken a huge share of media advertising revenue. Second, there is now a profusion of content online, often for free, competing for our readers’ attention. Third, this has changed a new generation’s reading habits. They now find out what is happening from their social media feeds and chat groups, and much less from reading a daily newspaper, especially in print.

4.       Together with the other newspapers in its stable, BT, WB, Shin Min and TNP, SPH Media has held its readership so far, but more of the same will not guarantee future success. The Government has been troubled by the writing on the wall for several years now. Our society will be weaker if local mainstream media becomes diminished and cannot provide trustworthy news and analysis. Against the onslaught of information − not always factual or accurate, and at times plain falsehoods − trustworthy journalism is a public good and should be supported.

5.       The Government has therefore encouraged SPH Media to gear up for this intense competition. The experiences of NYT, FT and several others suggest that serious digital media transformation, while not a panacea, can go some way in building a sustainable future for incumbent media companies which are focused on quality journalism. Going digital is not new to SPH Media, but we now need to step up more decisively to grow our readership rapidly especially among the young. This will require substantial investments in digital media transformation, investments which take a long time to recoup. The Government is willing to help SPH Media build capacity, pilot innovations, and scale up to increase impact and outreach. But even with growing readership, the ability to grow digital revenue to counter the continuing decline in print revenue is in itself a major financial challenge.

6.       The challenge confronting our newspapers is not unique to Singapore. It is a global phenomenon. Quality newspapers around the world are facing this challenge. Many have folded as they could not sustain the financial losses. Some, like the Washington Post and SCMP, have multi-billionaires to bankroll their media operations. Others have gone down the path of divisive politics to build subscriptions, straying from their original mission. 

7.       In Singapore, we have to forge our own way. SPH Media needs to develop a model which is both financially sustainable and will enable it to continue delivering high-quality trusted products to its readers. What is clear is that the listed company model is no longer the best business structure for quality journalism. Even if the resources are available, shareholders do not have the appetite to sustain investments in capacity building and digital transformation. Without a radical  restructuring, newsrooms will continue to be squeezed; their products’ quality and circulation will eventually decline. The first casualties will likely be our vernacular papers. This will be detrimental to our multi-racial society. Without regular and  substantial financial support from the Government, SPH Media will soon be insolvent. It will be a struggle to sustain quality journalism as a public good.

8.       As Minister Iswaran stressed in Parliament on Monday, “a high-quality, professional and respected media, reporting news by Singaporeans for Singaporeans, is essential to the fabric of our nation”. This is the role that the Government wants the local media to play. This is also how I see the media’s national role. We will do all it takes to ensure that SPH Media succeeds in this role. 

9.       The solution is to delist the SPH media business, with the agreement of SPH shareholders, and convert it into SPH Media Trust, a company limited by guarantee (CLG). This allows us to retain the financial discipline of a commercial enterprise,  and yet have recourse to funding from the Government and other sources for costly investments in digital transformation which listed company shareholders have no appetite for. Public funding will have to be accounted for and will be directed at capacity building. Such funding is already available to other companies, including Mediacorp. 

10.       The nine Management Shareholders of SPH have been sounded out to form SPH Media Trust, to take over the SPH media business as an on-going concern. They have agreed to be the founding members of the CLG, to continue their mission of supporting quality journalism. In due course, we will expand the CLG membership to include other established companies, especially those in the digital economy. Together, they will be the trustees of SPH Media Trust, charged with the critical mission to protect quality and trustworthy news in Singapore, and forge ahead with the mission of fulfilling a public good. The cut-over date is planned for 1 September this year, at the earliest.

11.       The founding members of the CLG have asked me to be the Chairman. I have accepted this heavy responsibility. My immediate priority is to ensure a smooth transition, without any disruption to the current media business. Practically all 2,500 media and media-related staff of SPH will move over to SPH Media Trust. Patrick Daniel will run the SPH Media Trust as its interim CEO. He was the former Editor-in-Chief and until recently, the Deputy CEO of SPH. I therefore expect the actual transition to be uneventful.

12.       I am grateful to Patrick for agreeing to help us out. Like me, he is enjoying his retirement. But he has a strong personal interest to see SPH Media succeed. I have assured him that I will begin a search for a CEO who can take SPH Media into the future as a multilingual digital media organisation, one who understands both East and West and is Singaporean at heart - and be among the world's best.

13.       We can then deal with the challenges:

      a. How to enhance our current digital products?
      b. How to grow readership, especially among the young?
      c. How to grow digital revenue to counter the decline in print revenue?

14.       I will work with the Media Trust team to settle the strategies and to carefully execute them. We will seek expertise where we lack. We will draw on the lessons of successful digital media transformation efforts elsewhere. We will tap on funding support from the Government for capacity building.

15.       Actually, the problem is not difficult to define. My generation enjoy our morning coffee with an SPH newspaper. The young prefer a different lifestyle. They access the news at any time of the day, and through a variety of platforms – the phone, the tablet, the computer. They don’t even start reading from the front page!

16.       We must adapt to their habits and expectations. We must improve our digital products to make them essential to their daily lives. We have started doing so, but we must accelerate our efforts. Current newsrooms were built for the print era; they need to be transformed further for the mobile phone and tablet era. As a British media company puts it: we have been “a print media company with digital products”; we must now decisively become “a digital media company with print products”. 

17.       This is not a mere play on words. This demands a transformational change in mindset. Good quality content is still critical, but it is not sufficient. We must now tap on digital technology and platforms to actively push it out to reach our subscribers and non-subscribers. To succeed, we must connect meaningfully with our subscribers and non-subscribers, listen to and understand their digital habits, and customise our content to suit their lifestyle and convenience. This requires a  quantum leap in capabilities, skillsets, and attitude. After we have stabilized our transition, we will set up SPH Media Academy to systematically train recruits and upskill existing staff. The Academy will be a useful platform for colleagues to build team spirit, enhance collaboration, and strengthen values and commitment to quality journalism in the digital era.

18.       I have begun meeting the SPH staff in small groups, listening to their concerns and their aspirations. And I will continue to conduct such dialogues over the next few weeks. My distinct impression so far is that the newsrooms are game and willing to take up the challenge. They are mindful of the national role that the media plays and that they must not fail in this mission. Warren Fernandez, Lee Huay Leng, Goh Sin Teck and several others have also told me so. I promise them my full support. How? Briefly, we will enhance their digital media capacity. We will build a first-class digital tech team to support the transformation. We will empower the newsrooms with skills and tools in graphics, video, technology, design and data to make the everyday experience of reading the news more accessible, compelling and engaging. This requires a joint effort among journalists, IT engineers and online media professionals. We will also size the newsrooms adequately so that they have the capacity to engage meaningfully with the audience. We are working out the additional investments that will be needed for this effort.

19.       But remember: transformation is a journey. It is not merely a technical exercise. It is also a cultural transformation. It takes time and effort for cultural change to take effect. Even for a greenfield project, it is difficult starting a new media company. It is several times more difficult for an existing company with established corporate traditions. To give one illustration: I have not yet examined the existing IT infrastructure of SPH Media. I will not be surprised if the legacy IT systems will severely  constrain our efforts to immediately enhance the user interface and user experience of our digital products. We will work hard to overcome these constraints. We hope our readers and subscribers will bear with us as we fix and replace the “digital plumbing and piping”. Please be patient and give us some time. 

20.       Besides addressing immediate needs, we must also plan for the future. We will continue to recruit and train the next generation of journalists and provide them with long fulfilling careers. From next year, we will step up the award of SPH  scholarships, not just in journalism, but also in digital disciplines. We will also arrange internships for local undergraduates to expose them to a career in journalism and digital media. For serving journalists, we will arrange fellowships and attachments in world-class newsrooms for global networking and possible cross-border collaboration. We are determined to keep journalism as an attractive profession that offers rewarding careers to talented and ambitious young men and women. 

21.       I am optimistic that we can succeed. My optimism is based on three observations:

      a. First, we have serious journalists and creative talent in our newsrooms, committed to the mission and raring to go. I will help them realise their ambition.

      b. Second, we have the strong support of PM Lee and his Government. They know that having trusted sources of news and information remains critical to nation building. While we must offer a range of viewpoints, we must not go down the path of divisive and corrosive media, or clickbait journalism that panders to eyeballs but fails to inform or educate readers. This is the imperative that drives my team. Otherwise, Patrick Daniel and I would not have come out of retirement to work on this national project.

      c. Third: I believe that our business community will support us. I sounded out some senior professionals from the private sector. They are not from the media, but they have observed the destructive impact on society when quality media succumbs to digital disruption. They told me that they have followed the Parliamentary proceedings closely. I hope a couple of them will come forward to help us by serving on the Board of Directors. I also intend to seek help from digital entrepreneurs. Indeed, when I discussed this subject with Mr Anthony Tan of Grab, he offered an expert for us to tap on for advice. I grabbed it immediately! 

22.       This is the start of a new chapter for SPH Media. The last time we had a major restructuring was in the early 1980s, when newspapers were merged and consolidated. It was to confront the commercial realities then, in order to ensure the viability of quality newspapers in Singapore.

23.       Now, the strategic objective remains the same: to preserve quality newspapers in all four languages trusted by readers, and to sustain them over the long term. Likewise, the values and principles underpinning our brand of journalism remain unchanged: integrity and professionalism of our journalists; and independence of our newsrooms. 

24.       PM Lee reminded us on the occasion of ST’s 170th Anniversary that “…you must … be conscious of your important role in Singapore, and continue to maintain your hallmark of credible, balanced and objective reporting..., take a long-term perspective of Singapore’s interests, and report the news for Singaporeans through Singaporean eyes. Inform, educate and entertain – roughly in that order”. Today, almost 6 years later, credible, balanced and objective reporting is as important as ever. So is taking a long-term perspective of Singapore’s interests, and reporting the news for Singaporeans through Singaporean eyes. But since PM Lee spoke, the digital disruption has further widened the gap between traditional media and new  media. It is no longer adequate for newspapers to “inform, educate and entertain”. With news proliferating and breaking news round the clock, traditional media’s ability to inform is no longer a differentiating factor. Competition is now in the depth of analysis and original insights, and also in their presentation. We need to urgently update our mission for the digital era. I discussed this with PM Lee and he agreed with this analysis.

25.       Finally, let us thank our loyal readers. We will continue to serve you in any format with which you are comfortable. While we will push our digital products and our apps aggressively, our print products will still be there in all four languages to accompany your morning coffee. And we stand ready to help our older readers who want to go digital. If necessary, we will hand-hold them in their digital journey. Nobody will be left behind.