Can Dinosaurs Evolve?

 

It’s now official – the once mighty media business of Singapore Press Holdings (SPH) will now be receiving $180 million of tax payers’ money a year for the next five years. The Minister for Communications and Information, Ms. Josephine Teo, explained to parliament that it was essential to provide this funding because “preserving local news media was critical,” and the funding would provide relief for the media outlets to transform. More on the story can be found at:

https://www.straitstimes.com/singapore/politics/sph-media-trust-to-get-up-to-180m-a-year-in-government-funding-for-next-five-years

 

 From Yahoo News

A lot of things are being said about this move and what it says about the Singapore media scene. I will leave that debate to the more qualified. However, I will state that the fact that the government had to step in and provide tax-payer funds to “preserve local news outlets,” should be seen as nothing less than the humiliation of the management of the media outlets. The local news outlets had a duopoly (Singapore Press Holdings controlling the print and MediaCorp controlling the broadcast) and had captive readers and viewers. They also had a license to print money in as much as advertisers didn’t have a choice.

Whilst newspapers around the world bled, ours were in robust financial health. My mother, a former editor with the Straits Times (Section 2) and her contemporaries remembers generous bonuses and annual leave.

So, what happened? How did a company that once had a license to print money end up in a position of needing a hand out from the tax-payer? Well, the answer is simple, the media houses were essentially dinosaurs that failed to evolve. The focus of business was not on providing the consumer with what the consumer wanted but on maintaining their monopoly. One only has to look at how the management of both media companies spent time snipping about whether readership or viewership was better when they could have used that time to focus on how to reach their consumers.

You can argue that the media houses were behaving like dinosaurs because there was no need for them to behave otherwise. They were the biggest creatures in the jungle and nobody else could take them on. What they failed to see was the smaller creatures were nimbler and found ways to beat the big dinosaurs.

However, size and power should not be an excuse for people and organizations not too evolve. There are companies that are using their size and cash power to prepare for a future where their mainstay is likely to be no more.

Interestingly enough one of the best examples of a big company trying prepare for a future is the largest oil company in the world – “Saudi Aramco.”

The Saudi National Oil company has been actively trying to brand itself as a responsible steward of the world’s energy supply. Part of that stewardship involves the role of how the oil affects climate change and Aramco is actively trying to show that it is trying to minimize the affects of fossil fuels on the environment:

https://www.aramco.com/en/sustainability/climate-change#:~:text=Reducing%20emissions%20to%20address%20climate%20change.&text=Reducing%20emissions%20to%20address%20climate%20change%2C%20while%20meeting%20the%20world's,and%20operated%20assets%20by%202050.

 

 https://www.aramco.com/?utm_source=googleads&utm_medium=ppc&utm_campaign=GO_SG_Brand_PH&gclid=EAIaIQobChMIrY-MkvGE9gIV2YNLBR28ZAFbEAAYASAAEgKB4PD_BwE

 

 One might argue that Saudi Aramco is unique in the sense that it is owned by the Saudi Government and has a social function as well as a commercial one.

However, there are other oil companies that are purely commercial and also working to prepare for a future without their main business. Just take a look at this Shell Station in Singapore.

 

Ironically, one of the industries that has been particularly successful at reinventing itself is also one of the most reviled – the tobacco industry. One of the biggest players in that industry is Philip Morris, which now talks about how it is preparing for a “Smoke-Free Future.” The global debate on alternative products is ranging. Singapore famously bans alternative smoke products but allows cigarettes to be sold freely. However, there are markets that have recognized that the alternative products could help reduce tobacco usage. Say what you like about the tobacco industry but it has proven to be resilient despite every legal effort to cripple it and it has shown itself to be forward thinking and not used its cash to get complacent.

https://www.pmi.com/

 

 Nobody imagines Shell not selling petrol or Philip Morris to exit the tobacco business anytime soon. However, these companies are not waiting for that inevitable day when their main product becomes irrelevant. Again, say what you like about the oil and tobacco companies but they are not getting complacent and imagining that their product will continue to print money for generations to come.

Evolution and revolution are word usually associated with the technology industry. However, they apply to all industries. Any government that wants to claim that it manages a good economy, should ensure that there is a certain amount of pressure on any given industry for all the players to compete and think of the future. If a government allows a market situation where the main players spend their days talking about their market dominance and how its beneficial for consumers to donate to the industry, that government is likely to go the way of the dinosaur along with the industries that it protects from competition.