Is Singapore Press Holdings Limited Really In A Sunset Industry?

Singapore Press Holdings Limited’s (SGX: T39) largest business segment deals with printed newspapers and magazines. As such, many investors deem the company to be in a sunset industry.

But, is that categorisation true? Let us explore.

Define a sunset industry

A sunset industry is one that has dim long-term prospects. It may even be threatened by obsolescence in the future. For Singapore Press Holdings, its printed newspaper business does seem to be facing obsolescence with more and more people reading news on online platforms.

However, Singapore Press Holdings is not really in the business of printing newspapers. It is in the business of producing news content. In that sense, regardless of how the content is distributed in the future – either through printed media or through the internet – the information that the company provides is still very much in demand.

Think of the music industry as an example. The distribution of music has evolved from cassette tapes to compact-discs to the internet. Yet, the music industry – in particular, those who create music – continues to be around. Similarly, given that Singapore Press Holdings is the content producer, how its content will be distributed in the future is secondary.

The niche within

Moreover, Singapore Press Holdings occupies a niche.

Famous investors and businessmen such as Warren Buffett, Jeff Bezos, and Jack Ma have bought local news providers in recent years even when newspapers in general have been struggling with readership numbers.

This is because local news events are still a niche for the local newspaper, despite global news events being increasingly commoditised. For news readers in Singapore, there is almost no other source of getting news regarding their local communities apart from the papers published by Singapore Press Holdings.

To put it another way, although I can easily get information on huge events happening in the USA, Europe, or China from many news sources, I will still have to rely on Singapore Press Holdings’ newspapers to know what is happening in say, Yishun, Jurong or Punggol.

So is Singapore Press Holdings really operating in a sunset industry? Many would think so, but I beg to differ.

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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 writer Stanley Lim doesn’t own shares in any companies mentioned.