THE Malay Mail ceased publishing its print paper in 2018, completing a 122-year run. The Tamil Nesan shut down in 2019, five years shy of its centennial. Chinese daily Oriental Daily is the most recent casualty, shutting down in 2021.
They are not alone. A United States study found that 1,800 newspapers have shut. In mid-2020, News Corp announced over 100 papers would stop printing in Australia.
The papers that remain alive have shrivelled down, both in terms of circulation and revenue.The Audit Bureau of Circulation, which measured distribution in Malaysia, shut down in 2019, so it is hard to measure the decline. Industry sources put it at well under a million papers sold daily across the country, with only about 20% of its peak of 4.7 million copies in 2007.
The number could be even lower, during periods when readers were under pandemic-related lockdown.
Is digital doing better?
One would think that with the audience going digital, the media would make back online whatever they lose in print. This would also seem to be the case with many more players entering the market. Why would they do so, unless it was profitable?
The internet, especially the growth of smartphones in the last decade, has brought news instantly to the fingertips of over 90% of the adult population.
The top news sites typically reach over a million users per day.
In print, a circulation of 100,000 copies can generate RM1 million to RM3 million in advertising revenue per day or about RM10 to RM30 per reader.
Comparatively, online advertising earnings can range between 1 and 3 sen per user, generating between RM10,000 and RM30,000 in ad revenue per day, nearly 1,000 times lower than in print.
Why is this the case? Tech giants – particularly Google and Facebook – are able to offer advertising at dramatically lower rates, as they access billions of users globally. Advertisers are able to spend less and reach more customers through using their platforms, as opposed to purchasing more expensive advertising directly from media companies.
The drain on the media is not only due to the intense competition from the tech giants. The internet has allowed other forms of competition, too.
Piracy has become a major issue. Paid television providers such as Astro have been hit by streaming boxes that are able to offer the same paid channels for free through a one-time purchase or through a monthly subscription at a much lower price.
Astro is able to hang on to the older, less tech-savvy audience, but have found it challenging to pick up newer audiences. Piracy is also a major issue for news sites, as their original content is often copied and republished on anonymous websites, which earn revenue by working with advertisers.
This form of piracy is a copyright offence, and reduces advertising revenue for the copyright holders. However, there has been little action by the authorities to curb this form of theft.
The media market is also now global. Audiences in Malaysia can access any media site and platform, both for entertainment such as YouTube, Netflix and Disney+, news, or hobby sites. Malaysians are no longer confined to Malaysian-based media.
The internet also offers a lower barrier to entry. Anybody can set up a content site overnight, ranging from serious publishers to bloggers and influencers.
Brands, too, are no longer reliant on the media to convey their message. From billboards to email campaigns and social media pages, brands now invest heavily in building direct relationships with their existing and potential customers, without a reliance on digital and traditional publishers.
So, why isn’t there much effort to rescue the industry? There is little pressure coming from the customer or the audience. In fact, from the connected audience perspective, it is a golden age.
They have access to more media choices than ever before; media is now more engaging, faster, and cheaper than ever before. What is bad for the industry is a boon for the consumer.
In reaction to this disruption, print and broadcast media have had to downsize dramatically. Retrenchments, closing down of newspapers, and reductions in hiring.
How do we rescue the industry?
There are a few schools of thought and approaches. One approach has been to get those who have benefited from the digital disruption to contribute back to the industry.
For example, in early 2021, the global media industry watched as big Australian media lobbied and got the government Down Under to pass a law, officially called the News Media and Digital Platforms Mandatory Bargaining Code, that forced the big tech boys Google and Facebook to negotiate a revenue sharing deal with the media.
The law strengthened the position of Australian media to demand a higher share of advertising revenue. However, it remains unclear how much the media have benefited and whether such benefits will be enjoyed by the local and smaller players as well.
Nevertheless, this approach has some support in Malaysia.
Acting head of product development and data management at Sinar Harian Ahmad Nazri Mohd Noor said: “The news portals are the opposite of the false news. (They) are reliable and authoritative, therefore, the social media platforms should pay for the content that the media produces every day.”
He warned that relying on digital advertising and subscription alone may not be enough to cover costs, and called on the media industry to work together to pressure the government to act.
“The Malaysian government needs to facilitate the cooperation between social media platforms and news portals to facilitate some revenue sharing from the social media platforms to the news portals.”
Other approaches call for the media to be more nimble and adapt to the changes quickly.
“The reality is that print audiences have declined and fragmented with more going for audio and video, hence the proliferation of distribution channels or non-news platforms. Our choice is simple. We follow and build the audience in these channels – more video, audio, and to a certain extent, longform journalism – that can be sponsored, or have paid content and subscriptions,” said Jahabar Sadiq, editor and CEO of The Malaysian Insight.
He argues that breaking and topical news will have to be loss leaders in order to attract a discerning audience willing to pay for quality news content.
“In the Malaysian context, that will mean language and demographic differentiation to widen the revenue streams.”
He said one way to reduce costs is for the industry to agree to “a common payment gateway, wallet infrastructure for all subscribers to access... then we make it simpler, cheaper, and better for all of us to do business”.
“What should make us different is our approach to journalism, giving choice of news and content rather than having too many platforms and payment options,” said Jahabar.
Terence Fernandez, editor-in-chief of PETRA News, which publishes The Vibes and Getaran, also calls for innovation, but more in terms of the advertising model.
“Advertising budgets in many companies have now shifted from marketing to communications. With this in mind, the media needs to consider venturing into the realm of reputation management, communications advisory, and training.
“At first glance, it is a fine line to tread as this will question the impartiality and independence of the press. However, it is no different from the current challenges of having clients who pay for ad space.
“Dilemmas of ethics versus revenue will always be there, but in my experience, maintaining editorial integrity is a selling point. Bona fide brands will want to be associated with organisations that command the public trust.
“Just think, how many times have we as individual newspersons been approached by politicians, CEOs, public relations practitioners, etc, for free advice?” said Fernandez, suggesting that this relationship can be monetised.
He also saw opportunity in more collaboration across the industry.
“Advertisers are nowadays looking for multiple platforms to reach niche clients. A particular portal or newspaper's audience may be small, but if it is the right profile, advertisers and agencies will gravitate towards it. Hence, it would be wise for more established organisations to question why smaller, newer competitors can still enjoy ad revenue.
“In a multilingual country like Malaysia, there is abundant opportunity to work together with vernacular organisations to reach out to a multilingual audience. Broadcast, print, electronic – all have their merits and fans. Smaller organisations can and should band together to offer more competitive pricing with a varied audience on offer.”
Government’s role in support
Even without getting involved directly, the government can play a key role in supporting the media industry.
The government should (apart from scandals and intrigue) address infrastructure issues. Affordable internet access, better and affordable server farms, and cloud infrastructure will help,” said Jahabar.
“This has to be expanded across the nation rather than just urban areas. Having 4G or 5G isn't enough, we need better affordable infrastructure and even grants to produce content – educational or topical – for the nation’s demographics.”
Fernandez felt that the present laws are vague and open to misinterpretation.
“Laws such as the MCMC Act, the Sedition Act, and the Official Secrets Act need to be reviewed to remove lacunas and provisos that can entrap the media into coming afoul of the law. It is unnerving to think that these ambiguities were deliberate for this very purpose!”
Sinar’s Nazri called on the government to lighten the digital transition burden by offering tax exemptions for equipment, software and personal expenses to help media to upgrade their news portals to be subscription-ready.
Other measures by the government can also include capping defamation costs and addressing issues such as piracy above by actively blocking content pirates.
Globally, major news brands have shifted to a paid-subscription model. The entry cost into such a model is high, including integrating with subscription software, staffing customer support, and expensive marketing campaigns.
Hence, it is only viable if a media company can grow their subscriber base significantly.
From the consumer’s perspective, having become used to services such as Netflix and Spotify, they seem open to something similar for news.
“I would like a hassle-free, monthly payment for all the news sites I like, not having to navigate and manage all my subscriptions individually. It would also have to be collectively affordable, perhaps RM10-RM15 per month,” said one paying Malaysiakini subscriber, when asked how they would like to pay for their news in an ideal world. – The Vibes, October 22, 2021
Premesh Chandran is the founder and curator of Media Malaysia, a portal that discusses developments in the media industry, as well as CEO and co-founder of Malaysiakini
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