These 4 Charts Show How Singapore Press Holdings Limited Is Being Disrupted

The traditional print media business is being disrupted.

This was the gist of a comment from Alan Chan, Singapore Press Holdings Limited’s (SGX: T39) chief executive, in the company’s latest earnings report that was released in mid-October. SPH has been reviewing its core media business as it seeks to retool itself for a digital future.

Shortly after the release of its results, the media firm made some moves.

SPH chose to merge two of its publications, The New Paper and MyPaper, into one publication. The media giant is also looking to reduce its staff count by 10% over the next two years. The moves hint at an urgency for change.

To understand why, these four charts from SPH’s latest annual report (for the financial year ended 31 August 2016) can help us understand the situation.

Traditional media is under pressure  

SPH’s operating revenue has been declining over its last five fiscal years.

Source: SPH’s annual report

From the graph above, we can see two things.

Firstly, SPH’s media segment is by far its largest revenue generator in the last five years. Secondly, the media business has been on the decline.  In the financial year ended 31 August 2012 (FY2012), SPH recorded over $1 billion in revenue from its media business. In FY2016, the same segment’s revenue was down to just $834 million, which is a sizeable fall.

In his annual overview in the annual report, Chan wrote:

“The media industry has faced considerable challenges in recent years.

More readers are consuming content digitally. Consumer sentiment is down, reducing advertising revenues with it. Media companies, including SPH, will continue to innovate and reinvent itself to remain relevant in this challenging environment.”

As Chan noted, readers are moving away from traditional media platforms. This has had an impact on SPH’s readership.

A digital shift

The impact of readers moving toward digital content is evident when we look at the readership trends of SPH’s newspapers. This is summarised in the two graphs below:

Source: SPH’s annual report

In the first graph above, we can see that readership for SPH’s newspapers peaked at around 3 million in 2009. However, it has been on a downtrend since then, ending at around 2.4 million in 2015. This is a 20% drop.

Moreover, we can observe that the trends are similar across newspapers of different languages. All newspapers are being affected.

Where have all the eyeballs gone?

The velocity of the digital shift can be observed in the differing fortunes of the digital subscriptions and print subscriptions for SPH’s mainstay newspaper, The Straits Times. You can see this in the chart below:

Source: SPH’s annual report

From August 2015 to August 2016, the print circulation number has declined 9% to around 277,100. On the flipside, the digital circulation figure has increased almost 57% over the same timeframe. The Straits Times ended FY2016 with a digital circulation of over 116,000, or close to 30% of the total circulation of the newspaper.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.