Singapore Government Media Release
Media Division, Ministry of Information and The Arts,
140 Hill Street #02-02 MITA Building, Singapore 179369.
Tel: 837 9666
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KEYNOTE ADDRESS BY MR LEE YOCK SUAN, MINISTER FOR INFORMATION AND THE ARTS AND MINISTER FOR THE ENVIRONMENT, AT "DIGITAL TELEVISION: MANAGING THE TRANSITION" SEMINAR ON 5 JUNE 2000 AT 2.35PM AT CONFERENCE HALL B & C, SINGAPORE EXPO
I am pleased to join you here today at SBAs first DTV Seminar, held in conjunction with BroadcastAsia 2000. The theme of this years BroadcastAsia, "The Year of Opportunity " aptly describes the world trend in the media and communication sectors today.
Digital technology has opened doors to many opportunities within the broadcast industry. With the convergence of IT, telecommunications and broadcasting, we can look forward to the emergence of many new services and players. Dot-com companies like Yahoo.com and Amazon.com have enjoyed spectacular growth. Traditional media giants are busily reinventing themselves to ensure that they remain relevant in the new media and communications scene.
The Internet, with its ability to deliver text, sound and video at increasing speed and reducing cost, has given us a taste of this new world. Advances in broadband and wireless technology will further increase the power of the Internet.
In this rapidly changing environment, companies have to compete in both "old" and "new" media. Business models have to evolve to leverage on attractive content spread across several platforms to capture more "eyeballs" and build up their clientele.
Local Media Industry Review
What do these developments mean for us in Singapore? We welcome these new opportunities. At the same time, we are mindful of the need to retain our identity and cohesiveness as a nation. In this regard, our local media have a unique role to play to contribute to nation-building. They must also keep up with the competition or lose their relevance. Competition for attention will be particularly intense for our young who are more educated and net savvy.
Amidst the international array of programmes at our fingertips, it is heartening that local content remains dear to the hearts of Singaporeans. Whether it is in news or entertainment the audience is more interested in themes that reflect the local environment. Surveys conducted last year found that 99% of Singaporeans continue to watch the local TV channels, with 60% of cable TV subscribers spending the same amount or more time watching these local channels. Local dramas continue to tug at our heartstrings. We will also continue to turn to the local media not just to find out about local events but also to get a local perspective on international developments.
In March this year, I announced that the Government was reviewing the structure of the media industry in Singapore. The media market in Singapore is small and fragmented. Unlike the telecommunications industry that services the world market, too much competition is unsustainable in the local media industry. It may lead to a lowering of standards and an appeal to the lowest common denominator. Singapore also does not have enough local talent to sustain a large number of high quality media companies.
Much as we welcome foreign talent to work in Singapore and many international media are already operating here, the regular reporting on Singaporean affairs for the Singapore audience has to be done by Singaporean media. Our objective is therefore to strengthen the local media so that it can hold the attention of local audience. We will stimulate the development of local multimedia content that appeals to the local audience and encourage local players to aggressively embrace the Internet.
The Government has decided to retain the present media structure, with SPH as the core newspaper group and MediaCorp as the core broadcaster. To enable them to compete more effectively across the range of media platform, the Government is prepared to grant SPH licences to run up to two free-to-air TV channels and up to two radio channels. Similarly, the Government is prepared to issue MediaCorp group a newspaper licence. In this way, both groups will be able to build on their core business and develop new capabilities so that they can better extend themselves on to the Internet.
The challenge posed by the new technology and convergence is not technology per se, but availability of quality content. We need more and better content. The Singapore audience prefers local content. With SPH and MediaCorp competing in both old and new media, they will be better able to hold our local audience with attractive local content.
The Government will review the ban on satellite dishes in 2002 when SCV's exclusive pay TV licence ends. SCV has just completed its cable rollout island-wide in Sep 99 and is focussing on recouping its investment by increasing cable penetration and services to the homes. It will have until June 2002 to recoup its substantial investment of $600 million.
Digital TV
Let me now touch on Digital TV. DTV is a logical next step for the broadcast industry, with its ability to offer enhanced and interactive TV. While the Internet continues to capture our fancies, it is the TV set that is ubiquitous and present in every household. A recent survey by Pace Micro Technology on consumer attitudes to digital TV in UK found that almost two-thirds of respondents favoured interactive TV over PC-based home shopping. For generations that have grown up watching TV, there is something appealing about the TV that the PC has not been able to duplicate.
Digital is the way to go. There is no turning back. Since Singapore adopted Europes Digital Video Broadcast (DVB) standard in May last year, industry players have been actively exploring this new area of opportunity. SBA has responded by issuing six digital TV trial licences to Television Corporation of Singapore, Advent TV, Cathay Organisation, DigitalONE, HealthAnswers and MediaManager to conduct R&D in DTV services and applications, such as mobile TV, enhanced and interactive TV and data broadcasting.
In July last year, the Television Corporation of Singapore partnered Singapore Bus Services to conduct the first "live" public mobile TV trial. For the first time, bus commuters were able to receive "live" digital TV programmes while travelling. With mobile TV, commuters can now enjoy their favourite TV shows and get "live" news updates even before they get home.
SBA has awarded the Media Corporation of Singapore two digital TV licences to operate in Singapore a commercial mobile TV service and a commercial DTV service which will carry the existing analogue elements in digital form. TCS will equip 2,000 public buses with digital TV by the end of this year. On the road, bus commuters will get to enjoy "live" feeds of information and entertainment. At home, TV viewers would eventually be able to experience the wonders of DTV as MediaCorp builds on the content of its existing TV services to bring on interactive TV.
DTV offers many opportunities for creative partnerships to develop applications and services that can reap the full benefits of the technology. SBA has been encouraging partnerships between content creators, technology specialists and media players to maximize the potential of DTV. To encourage further development in innovative DTV services and applications in Singapore, SBA has established a $5m digital broadcasting development fund to assist industry players who are interested to develop new digital broadcasting applications and services. Singapore is a good test-bed for digital broadcasting services and we see great potential for digital broadcasting services developed in Singapore to travel worldwide as digital broadcasting technology takes off in other parts of the world.
We encourage players from both the software and hardware industries to seed partnerships with our local broadcasting industry to develop innovative services for digital broadcasting. I hope that this seminar will be the start of many successful partnerships as you explore the ways you can leverage on each others strengths in the new digital world.
Finally, I welcome all our foreign visitors and wish all participants a rewarding and stimulating seminar.
LOCAL MEDIA INDUSTRY STRUCTURE REVIEW
In March this year, the Minister for Information and the Arts announced in Parliament during the Budget Debate that the Government was undertaking a media industry review to consider how best :
a) To strengthen the local media to ensure they can anchor local audiences to local content.
b) To structure the industry so that our companies can be more competitive locally, grow regionally, and compete effectively against global media players.
2 The review was necessary because convergence of traditional media, such as broadcasting and print, with the Internet has changed the way people obtain information and are entertained. This has changed the operating environment of the media industry. The challenge for Singapore is to ride the wave of media convergence and globalisation while enabling a Singapore identity to flourish among Singaporeans.
3 The review undertaken by senior officials from MITA, MCIT, MTI and relevant agencies, has been completed. Key players in the media industry, including SPH and MediaCorp, were consulted. Findings from SBAs consultants were also taken into account.
Key Conclusions
4 In his speech delivered during the Digital TV Seminar earlier today, Minister Lee Yock Suan announced that the Government will retain the present local media industry structure, with SPH as the core newspaper group and Mediacorp as the core broadcaster. Various options were considered, and the Government decided that under current circumstances, allowing SPH and MediaCorp to compete with each other whilst encouraging them to move aggressively into the Internet was the best option. This is because of Singapore's small market size and talent pool, and the increasing importance of the Internet. To meet the challenge, we need to leverage on the preference that local audience has for local content. In Singapore's case, two players competing against each other will keep up the edge, and will bring more variety into content development.
5 To give scope for more direct competition between SPH and MediaCorp and enrich their position as content providers the Government is prepared to issue SPH with broadcasting licences to run up to two free-to-air TV channels and up to two radio channels. Similarly the Government is prepared to issue MediaCorp a newspaper licence. To further strengthen the company, Mediacorp would be floated as soon as possible, within the next year or so.
6 The Government will also review the satellite dish ban in 2002 when SCV's exclusive licence ends. SCV was given a 7-year exclusive licence to cable up all homes and recoup their investment of over $600 million. The Government will consider issuing additional pay-TV licences in 2002 as well.
Details of the Review
7 The review considered the following :
a) Size of Singapore Market and Competition. We are a small market, and have a shortage of talents to sustain a larger number of quality media companies. The market is further fragmented by language. In addition, the local media industry faces no shortage of competition globally, and increasingly this is coming through the Internet and cable TV. Unlike the telecommunications industry that has been freed up, complete liberalisation in the media industry is unsustainable and may lead to lowering of standards of our newspapers and broadcast channels.
b) Local Media's Nation Building Role. Our local media plays a unique role in nation-building and fostering community values. Singaporeans must have our own media which continue to report on local highlights and viewpoints, and anchor Singaporeans to Singapore. Regular reporting on Singaporean affairs must always remain under local control.
c) Impact of Internet. There is a significant shift of attention to the Internet as a platform for accessing news and entertainment. A reflection of this is the declining readership of some of our newspapers among young Singaporeans under 30. For example, the Chinese papers have reported that their readership among younger newspaper readers below the age of 30 has dropped significantly, from 35% in 1989 to 19% in 1999. World-wide, nearly every company in every industry are feverishly reinventing themselves to respond to their dot.com competitors. Our media companies must gear themselves up quickly to face increasing competition and to seize opportunities presented by the Internet.
d) Preference for Local Content. Whether news or entertainment, the audience has been shown to be more interested in their local themes and immediate environment. For example 60% of SCV subscribers watched as much or more MediaCorp programmes, compared to the time when they had no cable TV.
8 Based on the above considerations, the review adopted the following approaches:
9 For more information please see attached factsheets.
Contact Persons : Mohd Ali Baksh Tel No. 8379634
Quek Choon Yang Tel No. 8379630
MINISTRY OF INFORMATION AND THE ARTS
5 Jun 2000
LOCAL MEDIA INDUSTRY STRUCTURE REVIEW FACTSHEET
Ownership & Competition
1 What is the Governments position on foreign ownership in local media companies?
Local media have a unique nation-building role in our multiracial and multireligious society. They need to have a deep sense of responsibility and commitment to Singapore. That is why our media must remain in local hands and there should be no foreign influence. It is for this reason that we have rules limiting any individual shareholding to no more than 3%, and requiring board members of media companies to be mainly Singaporeans.
2 Why only two competitors?
(a) In terms of market size, Singapore has a small domestic audience, which is further fragmented by language. The advertising pie that can be supported by the domestic audience is small (TV and Radio adspend in 1999 was US$285 million, according to ZenithMedia) and limits the number of players that can come in. According to SBA's consultants (Spectrum Strategy Consultants), there is concern that excessive competition can lead to a vicious cycle where too many players hurt profit margins leading to lower investments in programming which in turn lower programme and journalistic standards.
(b) Second, there is a shortage of talent in the media field. Media talent is a premium resource all over the world and there is a hugely competitive market to attract them. Locally, the growth in info-comm and other sectors is also competing for the same talent pool. SPH for example has reported considerable difficulties in recruiting quality journalists.
Pay-TV Issues
3 Why is SCV's Pay-TV monopoly term not shortened?
SCV has just completed its cable rollout island-wide in Sep 99 and is trying to recoup its investment by increasing cable penetration and services to the homes. It is fair to allow its exclusive licence to stretch out until it expires in June 2002, to give SCV a chance to recoup its substantial investment of $600 million.
Newspapers
4 Are we going to allow more newspaper companies (whether foreign or local) to set up in Singapore?
In the interest of injecting more direct competition in the newspaper industry, the Government is prepared to issue a newspaper licence to MediaCorp. Foreign and local companies that are interested in this business can take the opportunity to work with the licensed local newspaper companies. These newspapers must of course operate within the conditions of the NPPA, which includes a 3% ownership rule and a management share framework.
5 What are the conditions of a newspaper licence to MediaCorp?
Similar rules as applied to SPH will be imposed.
Broadcasting
6 Why only two TV and two radio channels for SPH?
This was based on a number of factors including the frequency availability, the viability of additional channels and the need to ensure some degree of competition between the two players.
7 Will SCV be required to must-carry the SPH channels?
Yes.
8 Will SPH have Public Service Broadcast (PSB) obligations?
All broadcasting licensees are required to carry mandatory PSB programmes and meet local content requirements. Such conditions will apply to SPH too. The requirement is normally 25-30% local content, but we will allow a ramp-up period to reach this level.
9 Will SPH get PSB funding?
(a) Local broadcasters are normally required to produce at their own expense certain minimum mandatory PSB programmes covering genres such as news, current affairs and childrens info-ed programmes. The details will depend on the nature of the channels that SPH will be broadcasting.
(b) In addition, SBA normally commissions PSB programmes and SPH will be eligible to bid for these funds in competition with MediaCorp. SBA will discuss with SPH the details of their PSB requirements.
Digital TV and Radio
10 Will SPH get any DTV and DAB licences?
If SPH applies for such broadcast licences, SBA will allow SPH's analogue TV services to be simulcast on DTV. Likewise, SBA will provide capacity for all FM radio services (including any future radio stations that might be operated by SPH) to be simulcast on DAB.
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