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SPH to go beyond defending core print business - Nov 23, 2005 (ST)

BackNov 23, 2005

The Straits Times / The Business Times News On SPH

SPH to go beyond defending core print business

It is diversifying into other media, expanding regionally ahead of looming competition.

By Kelvin Wong
Nov 23, 2005
The Straits Times

SINGAPORE Press Holdings (SPH) has to go beyond just guarding its all-important print franchise and seek new frontiers for expansion, including diversifying into as many media as possible and going regional.

That is the direction the company ought to be heading in as a multimedia player, even though the threat of new media is not an immediately pressing one, Mr Leslie Fong, SPH's executive vice-president for marketing, said yesterday.

'I believe firmly that one had better scan the farthest point in the horizon for any sign of a gathering threat and take precautions, and not wait till the barbarians are at the gate,' he said.

The former editor of The Straits Times, who was addressing about 1,000 delegates at the AdAsia conference, made the war analogy in his speech, Beyond Print: Lessons From Genghis Khan.

There are lessons to be learnt from the legendary conqueror, who has been hailed as a military genius and strategist, the bloodshed he caused notwithstanding, said Mr Fong, who cited a saying attributed to Genghis Khan: 'Those who build fortresses will lose and those who move on to conquer new frontiers will win.'

He was quick to emphasise that it was not SPH's intention to make conquests, much less cause bloodshed. 'I suggest only that SPH must do more than just defend its core print business,' he said.

And SPH certainly has every intention of defending its print fortress - a business that is still doing very well, he added. In the last financial year, print advertising revenue made up more than 65 per cent of the company's total operating income of $1 billion.

SPH's stable of newspapers and magazines collectively also account for about half of the total discounted ad spending in Singapore.

And while much has been said about the Internet drawing eyeballs away, Mr Fong said it has not made much of a dent on SPH's readership numbers. The Straits Times, for example, still commands a daily readership of 1.3 million.

And online advertising has yet to take off in a big way. 'Our estimate is that total ad spend online last year was about $10 million to $12 million, or just about 2 per cent of our revenue.'

Still, 'we strain to see far into the horizon and put our ears to the ground to listen for the distant thunder of galloping hooves', he added.

Mr Fong outlined a two-pronged strategy for SPH. On the one hand, the company secures its print fortress by investing in content creation and giving both readers and advertisers greater value and choices.

But on the other hand, he said SPH is also mindful of the challenges and the potential of new media, and is moving into new frontiers.

For example, it has regrouped and repositioned its online platforms and wants to expand this business at a steady pace of at least 15 per cent a year.

The company is also considering going into online classifieds, starting with jobs, though not at the expense of its print classified operations which yield more than $200 million a year.

SPH also makes its foray into content delivery over mobile phones this month, a platform that can open up opportunities for advertising later. It has also gone into outdoor advertising.

As well, the company wants to be a regional player. It has started with magazines in Thailand, Malaysia and China, and is examining other possible ventures actively.

'We want to find partners who share our vision of ensuring a prominent place in Asia's media markets for Asian players and with whom we can work to mutual benefit,' said Mr Fong.