SPH ad and circulation declines signal ‘loss of pricing power of newspapers’

Straits TimesSingapore Press Holdings, the citystate’s largest print publisher, has suffered a fall in advertising and circulation revenue in the third fiscal quarter – despite posting an 81 per cent increase in net profit.

The revenue declines mark the failure of a plan to squeeze its loyal advertisers and a loss of the pricing power of newspapers, a media buyer has said.

Turnover for SPH’s newspaper and magazine arm fell 3.3 per cent to S$259.3m, owing to a 4.3 per cent slip in ad revenue. Circulation revenue reversed by 2.3 per cent to S$50.7m.

The publisher of The Straits Times pulled in a net profit of S$187.5m – up from S$103.8m – but operating revenue slipped 2.1 per cent to S$324.9m for the period ending 31 May.

“SPH has lost the pricing power of newspapers – which wasn’t the case a few years ago,” said Bharad Ramesh, head of trading for Southeast Asia at media agency buying group Vivaki.

“Their approach of squeezing their loyal advertisers isn’t panning out. Their focus on top-line revenue is squeezing their yield,” he said.

“They do however continue to engage with agencies to push their digital assets – which is currently less than 10 per cent of print revenue. And of course Kiss Radio, which has been a surprise hit.”

The fall in ad revenue has been blamed on hits taken by the property and car sectors. Meanwhile, SPH has managed to keep down costs by reducing staff costs, and lowering the cost of production and distribution.

Ramesh added: “Display revenues have fallen for five or six consecutive quarters. It’s a secular trend.”

“The cooling measures [on the property and car sectors] have had an impact for sure. But SPH has not helped itself by expanding into other categories more aggressively, taking share away from TODAY [Straits Times rival, published by MediaCorp] and strategically getting less advertising dependent.”

The company’s results do not reflect a wider malaise in Singapore’s media market, Ramesh added.

“They do however accurately reflect the decline in traditional media in terms of consumption and advertising. Pay TV and digital spend are up – though specifics are not tracked by Nielsen advertising expenditure,” he said.


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella Asia newsletter now.



Sign up to our free daily update to get the latest in media and marketing