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3 reasons govt will continue to fund SPH Media despite circulation debacle

3 reasons govt will continue to fund SPH Media despite circulation debacle

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Last month, SPH Media confirmed to MARKETING-INTERACTIVE that it had found inconsistencies in its circulation data, following a review of internal processes. According to the company, these inconsistencies include subscription contracts.

Now, the government has announced that the saga will not change its decision to give funding support nor the amount it previously committed to providing to SPH Media Trust, according to Communications and Information Minister Josephine Teo in Parliament on February 6. 

The case involved a discrepancy of 10% to 12% which is around 85,000 to 95,000 daily average copies across all titles. There was also double counting of subscriptions and destructed copies included in the count, according to an article on The Straits Times (ST). The article added that in another instance, a project account took in additional funding to purchase fictitious circulation numbers. Certain circulation numbers were also arbitrarily derived. The incident caused waves in the industry and prompted the Ministry of Communications and Information (MCI) to launch an investigation into the media company which has since been concluded.

Don't miss: 3 industry-wide ramifications post SPH Media's admission of circulation tampering

As part of its review, MCI said it re-examined its analysis of the media landscape in early 2021, when the decision was taken to support the restructuring of the SPHL’s media business into SPH Media Trust (SMT). “We also reviewed our reasons for committing public funds to support SMT’s capability development,” Teo said in parliament according to transcript records seen by MARKETING-INTERACTIVE. She said:

SMT’s internal review of circulation numbers reinforced our assessment that the media landscape had become highly unfavourable for news organisations, even if they had substantial reach and were trusted by the public.

"In particular, demand for print and digital subscriptions had weakened because news had become freely available. This is why circulation had come under pressure. I emphasise: This does not make it right for anyone to overstate circulation numbers. But it reaffirms the need for restructuring," she added. 

Why the government continues to fund SPH Media

Teo then laid out three reasons why MCI decided to commit government funds to SPH Media in the first place. She highlighted that our local news media is at a watershed with structural changes, technological advances and the Internet severely disrupting the media industry, which traditionally relied on print advertising revenue.

She also brought up that preserving the local news media serves a larger, long-term public interest in that they give voice to the Singapore identity and Singaporean perspectives. 

Finally, she added that in a crowded information space, citizens must have sources they can go to that are accurate and objective.

Moving on to address the issue of the funding amount, which comes up to SG$180 million a year over five years, Teo said that the level of funding previously assessed for the purposes of investing in technology and capability development remains valid. “As Members can see, in assessing the funding required for SMT’s transformation, circulation numbers were not a key consideration. The level of funding previously assessed for the purposes of investing in technology and capability development remain valid,” Teo said. She added that the focus remained on reach and readership instead.

Readership and reach are measured through surveys done by third parties, continued Teo. She added that SPHL had previously commissioned surveys conducted by third-party research agencies such as GfK. MCI had also independently verified readership and reach using data sources outside of SPHL and SMT, including data collected by the Reuters Institute of Oxford University, and News Consumption Surveys.

Ensuring accountability within SMT

Teo then moved on to saying that the findings of SMT’s internal review of circulation data from September 2020 to March 2022 have no bearing on public funds, as the government did not have a funding relationship with SMT before the financial year of 2022 and that no funds have been disbursed yet.

She added that conditions and safeguards have been put in place to ensure the accountability of the use of public funds.

This includes applying Key Performance Indicators (KPIs) such as the total reach and engagement of SMT’s products and specific reach indicators for certain groups and youths to determine the amount of funding it receives.

“The achievement of the KPIs will determine the amount of funding SMT receives. SMT’s KPI performance and financial statements must be audited by independent external auditors before submission to the government. The government can also conduct its own audits of SMT,” said Teo.

Teo continued by saying that SMT would now need to provide progress update to MCI on a half-yearly basis with money only being doled out after SMT provides satisfactory regular updates on where and how funding has been utilised, and future business plans.

Other queries 

Adding on, other ministers asked about the duration and financial implications of the overstated circulation numbers, the manner, timing, and extent to which SMT discloses details of its review. Teo said that while these concerns were valid, they should be addressed to SMT.

“SMT has its own corporate governance and executive team. Their CEO is accountable to their board, which is in turn accountable to the members of the CLG,” she said. “SMT has its own corporate governance and executive team. Their CEO is accountable to their board, which is in turn accountable to the members of the CLG,” she said.

She concluded why welcoming the board’s resolve to examine the findings of its internal review, adding that MCI expects SMT to share the findings of the audit and risk committee’s investigation.

“SMT’s Board and management must also be mindful of their public duties, their responsibility to maintain the public’s trust in their newsrooms and journalists, and the need to discharge these responsibilities in a diligent and timely manner,” she said.

When MARKETING-INTERACTIVE reached out to SPH for a statement, they mentioned that as the review by the SPH Media Holdings Audit and Risk Committee is currently ongoing, they are unable to comment further.

Related articles:
Association of Advertising and Marketing SG asks for 'absolute transparency' from SPH
SPH Media chief sends out memo to adland trade partners clarifying rates
SPH Media confirms fudging of circulation numbers: Will this leave advertiser trust broken?

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