Lee Cheok Yew and his staff at MediaWorks should have been preparing a toast to their achievement in grabbing 30 per cent of Singapore's viewership as the underdog broadcaster's second anniversary approached next month.
Instead, the chief executive officer behind the broadcasting business of print conglomerate Singapore Press Holdings was shown the exit when his contract expired on March 31.
Within days of Lee's departure, four more senior executives resigned, including Lee's right-hand man, Melvin Ang, the media business group operating chief. The unexpected departures have left industry watchers wondering if tiny Singapore, a market of a little more than three million viewers, can sustain two broadcasters. In the best of times this would be difficult, more so now with economic conditions this dismal.
The other question centres on MediaWorks' future and the prospect that it may have to change its strategy in the battle against its entrenched rival MediaCorp. The station moved quickly to fill vacant management slots with a combination of relative newcomers to the group and old hands under a temporary caretaker, Wee Leong How. Wee, the chairman of SPH's Times Periodicals business, will oversee business until a replacement is found.
At the time of his departure, Lee and MediaWorks made no effort to hide the fact that there were "serious internal differences" that "if not resolved, could seriously undermine the operational efficiency". Appointed in June 2000, Lee was viewed by the industry as having played a key role in launching the station, boosting its ratings and introducing innovative advertising sales packages. In doing so, agencies say he helped breathe new interest in TV as a medium.
But the initiatives weren't enough to staunch the bleeding. According to SPH's 2002 annual report, MediaWorks' advertising revenue was S$27.5 million, but losses hit $44.6 million.
For the six months ending February, turnover was reported to have improved to $28.5 million and loss was reduced to $16.6 million. Broadcasting advertising revenue for the first half more than doubled to $23.4 million from the same period last year. SPH is clearly feeling the pinch as the broadcaster continues to bleed.
Media sources speculate that it is not making money fast enough for a holding company used to quicker investment returns from its print business through English-language flagship daily Straits Times and the Chinese-language equivalent Lianhe Zaobao. Making the task of breaking even harder is the fact that print is king is Singapore, taking close to $757 million of adspend pie against TV's $696 million. Excluding bonus deals, some believe, the split is wider in print's favour. "Initially the programming strategy was not working. So we decided to introduce the movie belt from 10pm every day. We increased our share to 28 per cent of the English channels' ratings share. We took the opportunity to rebrand (the Chinese and English-language stations) to U and i because (its former name) TVWorks was confused with the company," Lee said.
Channel i may get another boost from a deal Lee had signed before leaving.
He persuaded Paramount International Television to jump ship from MediaCorp's Channel 5, which could provide the underdog English-language channel with new drawing power. With the deal, Channel i gets first bites of Paramount's library, comprising more than 55,000 hours of programming and a haul of highly-rated shows.
At the time, Lee said Paramount's programming would help Channel i build on the 28 per cent market share of the English-speaking audience it garnered since rebranding the station last year, to 40 per cent by the end of this year.
With the two stations using separate research firms to track viewership, the ratings picture varies, depending on who's talking. On the one hand, MediaWorks claims prime-time ratings of 36.4 per cent of viewers aged 15 and above in March, against MediaCorp's 63.6 per cent, based on Nielsen Media Research data. MediaCorp, citing Taylor Nelson Sofres research for viewers above 15, insisted that it had 66 per cent viewership for the first quarter of this year, against MediaWorks' 34 per cent.
Ratings aside, the worry among media agencies is whether MediaWorks' new team will retain innovative advertising sales options such as guaranteed ratings that Lee's executives had introduced.
Starcom managing director Jeffrey Seah notes: "MediaWorks' belief in its product is so strong that it offers guaranteed ratings. They are more business-like and understand business and client needs. They also react faster to consumer trends. For example, they brought in Korean dramas when consumers wanted Korean dramas, or Taiwanese slapstick variety shows or reality shows."
In the current climate, two's a crowd no matter how hard a start-up struggles, says MediaWorks former operating chief Melvin Ang. "We are doing well despite market conditions and we have a lot of support from the trade.
Our revenue has grown more than 100 per cent. (But) Singapore can't sustain two stations, not in the current market.
A more immediate challenge for MediaWorks is finding the right candidate to take it forward at a time when - as one staff claimed -morale had taken a heavy hit from the way Lee was shown the door. Said the staffer: "With the bleeding of top management, we are as good as starting from scratch."
WEE ON MEDIAWORKS: DISAPPOINTED WITH REVENUES
What is SPH's assessment of MediaWorks' performance to date?
While we have been happy with the improvements in ratings, we are somewhat disappointed that the revenues have not quite increased in tandem.
Is a programming/marketing shift in the works under the new team?
The new team have just come on board. We need some time to assess the situation and do not expect dramatic changes in the short-term.
What is the assessment of staff morale in the wake of Lee's sudden departure?
Naturally, when a change like this takes place, there will be colleagues who are affected. We are doing our best to reassure staff and to get things back to normal as quickly as possible.
Have the departures sent MediaWorks back to square one?
I am confident in our ability to work together as a team once we have put this episode behind us. We will not let these departures affect us too much.
When does SPH expect MediaWorks to break even?
I would rather not comment on this at this time. Obviously it is in our interest for breakeven to happen as soon as possible.