It’s been a turbulent 2008 for the region’s media owners. The year has seen the rise of new media brands in sectors such as online video, and the collapse of old ones, such as the closure of Maxim in Singapore. As the end of the year approaches, who came out of 2008 stronger, and which companies went backwards?
1 Among the big international media owners, Google was a clear winner. The search giant made gains on two fronts in 2008. First, it saw its two global rivals Microsoft and Yahoo fail to take the opportunity to build a powerful rival to it in Asia. Microsoft’s US$47.5 billion acquisition bid for Yahoo would have created a strong player in the region; the collapse of the deal has left Yahoo shattered and Microsoft playing catch-up.
At the end of the year, Google also benefited from the PR feeding frenzy around Baidu, the dominant search player in China. In September, Baidu was accused of accepting money from dairy company Sanlu to block listings of negative news at the height of the Chinese milk scandal. Two months later, Baidu was exposed as receiving money from unlicensed medical companies to include their websites in Baidu’s search rankings. Any hit on Baidu’s market share will benefit Google.
2 Online video was one of the key emerging platforms in China this year. The battle within it intensified after the State Administration of Radio, Film and Television (Sarft) announced companies would require licences to continue operating. The most popular video-sharing sites at the time were Youku, Tudou and 56.com. Of these three, Youku, which received its licence in July, ended the year as the winner, having established itself as a trusted platform.
Tudou finally received its licence two months later, following a month-long shutdown in March by Sarft for airing prohibited content. Talks with CCTV to provide Olympic content online ended abruptly following the shutdown.
However, the big loser was 56.com, which was forced to abandon online video after being shut down by Sarft for three months. It is currently trying to become a community networking platform.
3 In Southeast Asia, Malaysian pay-TV operator Astro had a year to forget. In October it announced its decision to end its year-and-a-half relationship withits Indonesian partner, Lippo Group subsidiary PT Direct Vision, effectively retreating from the Indonesian pay-TV business.
The collapse of the deal leaves Astro watching from the sidelines as Indonesian pay-TV begins to grow in scale. The big winner is Malaysian firm Indovision, which is picking up Astro’s old subscribers and building share.
4 The print market has seen better days worldwide, but some companies are expanding. Singapore Press Holdings (SPH) posted a year-on-year profit increase of 17.5 per cent to $331.84 million for its fiscal year. SPH reported a 5.7 per cent spurt in newspaper and magazine revenue and a 7.6 per cent growth in ad revenue. While this gain came at a price - notably the closure of men’s magazine title Maxim in October - it allowed SPH to make investments for its future, including the acquisition of financial services portal Shareinvestor.com. And as Singapore is an unusual market in that print adspend is higher than TV, SPH is in a stable position, even in unstable times.
Its competitor in the Singaporean print market, MediaCorp, fared less brightly. Aside from ending the print circulation of four of its 15 magazines, MediaCorp - whose strength is in television - saw the departure of its VP of marketing after a five-year tenure. It has done little else to bolster its print business in Singapore.
5 In the world of outdoor it’s been a tough year for Focus Media, which saw its stock price hit a five-year low in November, dropping 90 per cent since October, last year. In March Focus was accused of mass-spamming to mobile phones, an affair that resulted in the resignation of CEO Jason Jiang. A series of financial setbacks, including the closure of its SMS division and a planned restructure of its in-store arm, has caused anxiety among investors. Given its prodigious growth beforehand, its recent travails represent an opportunity for the rest of China’s outdoor industry.
What it means for...
Media owners
- In search, Google will continue to be the dominant player regionally, and may gain ground in China. Its competitors will spend much of 2009 picking up the pieces.
- The rise of online video shows just how quickly major new media channels can form. It also shows how much interest they can attract from the authorities.
- However, the growing pay-TV industry in Indonesia and the success of SPH underline that there is still growth potential in traditional channels.
Marketers
- With more budget expected to head to digital next year, the options open to marketers in that space are growing. However, marketers are likely to rely on a few key media owners.
- Advertisers seeking better value should take heart in the efforts by publishers such as SPH to build cross-media sales platforms.
