History and background of the Singapore television industry
The local television industry in Singapore started off as single-channel, one-and-half
hour monochrome service by the Radio Television Singapore (RTS), a government
department under the Ministry of Culture in 1963. From the humble starts television
had ever since 1963, television stations in Singapore have always been owned
by the government and heavily legislated by the government. It is only in the
late 80s when the government allowed the entry of the cable broadcasting and
even then the entry was a slow and uneventful one.
In 1994, the Singapore government took a major step in opening up the television
industry by privatising the local television station, Singapore Broadcasting
Corporations (SBC) and renaming it as the Television Corporation of Singapore
(TCS). By opening up various regulations to allow the entry of more competition
into the local broadcasting scene, it has attracted various key players such
as HBO, CNBC and Nickelodeon to set up their bases in Singapore. The opening
up also meant a larger role cable television plays in the lives of Singaporeans.
Currently, with further relaxation of regulations in the media industry, by
issuing more licenses for broadcasting, it has led to the formation of another
television station, SPH MediaWorks.
The television industry in Singapore, from the start has always been heavily
controlled by the government. SBC had monopolised the TV industry all the way
from its start till its metamorphosis to TCS. Even with privatisation, TCS has
been a government linked corporation, which enjoys to a certain extent the same
kind of dominance, SBC had when it was government owned. Even with the introduction
of a new television station, the television culture in Singapore will still
be a protectionistic one.
Local television scene: what is it made up of?
Looking at the current television industry, it is made up a chief media conglomerate,
MediaCorp Singapore which has the ownership of 2 television stations, TCS and
STV 12, and 1 cable television station, SCV. These 2 stations provide 5 free-to-air
channels: TCS 5, TCS 8, Sportscity, Central and Suria. These 5 stations cater
to the multi-ethnicity population of Singapore providing the different needs
of the population.
SCV on the other hand is subscription based and supply up to 40 different international
and regional channels to provide to the various niche markets of consumers.
Revenue: Where do the television stations draw their revenue?
Local free-to-air stations: Catering to a population of 3.2 million, the free-to-air
stations draw their revenue entirely from advertising slots they sell to advertisers.
TCS reaches to more than 90% of the population and commands a weekly reach of
80% of the population. One example of the nation-wide viewing of TCS programmes
can be seen by the ratings of The 1998 Stars Award, reaching a whooping 1.01
million viewers in 1998. Such an extensive audience reach has allow TCS to generate
its main source of revenue from the sale of advertising time.
Cable television: Cable TV subscription, as at February 2000 is 216,000. The
main source of revenue from cable television comes from the monthly subscription
fees received from subscribers who pay to watch the different channels offered
by SCV. Due to its unique marketing strategy of selling their programmes where
viewers are promised uninterrupted programming, it is difficult for cable television
to sell advertising time. Furthermore the nature of catering to specific groups,
it reduces the marketability of cable television as an advertising medium. This
results in a low level of dependence on advertising as a form of generating
revenue. The competition from local free-to-air channels also reduces the advertising
pie.
Pay-per-view: Possibility or probability?
To tackle the question of whether local television stations will become pay-per-view,
one must examine the factors that affect the decisions of a television station.
Rising production and programming costs.
Faced with the rising demand for better signal receptions, more channels and
interactivity, the pressure on a television station faced is definitely daunting.
With such demands, it is inevitable that television stations have to consistently
source for newer and better technologies to improve their quality of broadcast.
The blind competition for new technologies by television companies to garner
more audiences would mean higher costs, especially in research and implementing
the improved techniques of broadcasting.
The rising costs of production are not help by the expensive production of popular,
high profile programmes. Popular foreign programmes that are extremely popular
with audience are expensive to acquire. This situation is made worse by the
fact that now people have alternatives options such as cable television. Therefore,
local television stations have to acquire a desirable amount of high cost popular
programmes in order to sustain their high viewership and hence maintain their
revenue. Licenses to broadcast popular programmes such as world sporting events
like World Cup, which guarantees large audiences, are also expensive to buy.
All this adds to production costs of a local television station.
Demand for high viewership.
As television companies are profit driven private corporations, the one thing
that
is of utmost importance is the generation of profit. If a program cannot generate
any profit, a television station would not pay to broadcast it. Similarly, even
if a program cost a lot of money to acquire, as long as it is able to reap in
chunks of advertising profits, a television station would hesitate to put it
on their channels.
To the conventional profit driven television station, the pressure for viewer-ship
plays a very big part in their programming. If the channel is unable to reap
in enough viewership from their programmes, their marketability to the advertisers
would fall. This is the reason why ratings are particularly important to television
stations. Programmes that are not well received by the audience are reflected
through ratings and the direction of future programming would change in the
direction, which the station feels generate a higher viewership.
Limitations by regulating bodies
A television station is very limited by the guidelines of the regulatory bodies.
Even if a certain programme is extremely popular, it would not be broadcasted
if it is against the guidelines of the regulation bodies. The direction a television
station produces programming is very much affected by the directions of the
various guidelines. Ethical issues in media like censorship, undesirable content
and libel are all regulated by the regulation bodies. To a certain extent, how
a television station schedules their programming is dependent on the guidelines
laid down to them by the regulatory bodies.
Therefore to subject a channel or a station to a pay-per-view system, there
must be a profit gained. The amount of profit earned from subjecting to a pay-per-view
system must be more profitable than the advertising revenue from putting that
programme in a free-to-air channel. In this case, the costs of acquiring the
programme are not an important factor. Instead, what is most important is whether
that particular programme can reap enough profits, either from advertising or
from collecting subscription from the pay-per-view programme.
Pay-per-view: the Singapore context.
The question that is being discussed deals with whether pay-per-view in local
television stations would be a possibility in Singapore. Going by the same factors
laid down earlier, I would think that the possibility of that happening is very
small, at least in the next 5 years.
As of now, with the entrance of the competition from other sources such as cable
television and satellite television, the local free-to-air stations are faced
with the task of improving their technologies and programming to cope with the
intense competition. This has led to newer investments and more funds being
pumped in to improve. Various measures that TCS have taken include diversifying
their programmes to cater to the different niche market to counter the competition
from subscription television. For example it has set up SportsCity to provide
a local version of big international name like ESPN.
Maintaining the advertising pie via high viewership.
Currently, TCS can still secure the interest of its audience even with the introduction
of cable television as a substitute. As the Singaporean culture of having free-to-air
television have been instilled in them for the last 3 decades, TCS has secured
its place as the television station owned by the nation. It is also difficult
for the people to accept a new form of watching television especially when they
have to pay for the service. This has limited the growth of cable and subsequently
affected the profitability of having paying television.
Furthermore, it would take time before the population would accept and change
their viewing habits to the newer stations. With the resistance to change their
viewing habits of many people, the likelihood for them to switch to other medium
is lower.
The difference in the audience targeted is also an important factor that has
maintained the viewership of TCS. As those who actually subscribed to SCV, it
does not exclude them from watching the programmes from TCS. The marketing strategy
for the 2 different companies is also different. TCS generates more of its revenue
from selling advertising space, while SCV provides programmes with minimal commercials
to provide a higher level of visual entertainment to audiences and to niche
audiences who are willing to fork out the extra dollar.
Given the local television stations' ability to sustain itself even in the midst
of new options coming in, the advertising marketability of local television
stations are still very high. A study done by Aw and Lek (1997) can further
demonstrate the limited impact of cable television on TCS's advertising revenue.
Without its dominant form of revenue being very much affected by competition,
there is no point for the local television station to go into pay-per-view.
This would mean that there is no worry about the increases in costs as the profitability
of its advertising space is sufficient to cover the increases in costs.
Programming nature of pay-per-view
The nature of the programmes the audiences are willing to pay for would also
affect the profitability of pay-per-view. To ensure profitability, a programme
must be widely watched. The programmes the audiences are willing to pay for
must be programmes that are exclusively broadcasted and not to be viewed on
another channel or medium on a cheaper cost.
Programmes that have the potential to become pay-per-view include top international
movies, major sporting events or live telecast of concerts. However such programmes
have limited viewership as they usually cater to niche audiences who cannot
access certain programmes via conventional means of television broadcast. It
would not be more profitable than selling advertising slots in between slots
in the programme in a free-to-air channel.
Pay-per-view programming also means that one must pay for whatever he watches.
Unless a programme is priced extremely cheaply, it would probably reduce viewership
especially if a free alternative is readily available. In fact, cable television
would give a better deal to the audience than pay-per-view, as they get more
channels and variety than pay-per-view.
It is also very difficult to sell any advertising space on a pay-per-view basis,
as the audience would expect a disturbance-free programme like such of watching
a movie in the cinema. Unlike free-to-air television, the expectations set by
audiences would be different especially since they have to pay to watch that
particular programme.
Protectionistic nature of government
Even with the opening up of the media market, the government still adopting
a protectionistic role in regulating the media. According to a report by Aw
& Lek (1997), Singapore Broadcasting Authority (SBA) put a ceiling of 25%
on the revenue SCV can earn from advertising. On top of that, advertising time
is also limited on SCV.
Going by such a yardstick, it is easy to see that the government plays an important
part in protecting the national television station before allowing it to compete
with the other international players. Even with MediaWorks entering the market,
it would probably be a competition between free-to-air channels to divert the
audiences' attention from international networks.
The amount of censorship imposed by the government on imported programmes would
also hamper the chances of a pay-per-view channel being set up. In an article
yesterday on Wall Street Journal, (Flegg, 2000), HBO has found it extremely
difficult to market their product in Asia because of the heavy censorship practised.
Vertical integration of local media companies.
With the trend of conglomeration happening to many international media players,
the Singapore media industry has also not fallen behind. With MediaCorp, who
owns TCS and SCV going into print media and online media; SPH, who owns the
country chief newspaper going into television industry by starting MediaWorks,
the trend of vertical integration has set in to Singapore.
With media convergence being the buzzword in the media industry now, it would
raise the power of advertising to a higher pedestal making it even easier to
market the advertising powers of local television stations. This would render
revenue from pay-per-view as an ineffective substitute to advertising revenue.
Pay-per-view: a thing of the future?
With the dynamic and ever changing nature of the media industry today, it would
be very difficult to deem the idea of pay-per-view as impossibility. In fact
pay-per-view programmes have been successful on various networks in America.
However, whether or not the local television industry would sway towards that
direction would lie heavily on the movements of the international media scene.
Pay-per-view: Are we willing parties?
With the trend of globalisation and conglomeration being ever so rampant in
the media world, it would be difficult to dismiss the notion of pay-per-view.
With media empires threatening to monopolise the information industry, it has
certainly caused alarm bells to ring. In fact the monopolisation of media industry
has affect the costs of programming of television stations. In the sports industry,
much of the revenue generated is from the royalties paid to them by television
stations, such as SportsCity who want to broadcast the matches. This raises
costs of programming especially with the uncontrolled rise in wages paid out
to sporting stars, for example in the English Premier League.
Furthermore, the sports industry is also a very lucrative form of profit both
in terms of advertising and from subscription. If any one person or group were
to be able to control the sports industry, the profit reaped would be exponential.
This probably explains why media mogul, such as Rupert Murdoch are fighting
for the control of it.
Pay-per-view: An option on cable?
As mentioned earlier on, the idea of pay-per-view would not replace advertising
as a chief form of revenue especially in the short run. However the possibility
of it being an option on subscription television lies high.
Pay-per-view, especially of unreleased movies would possibly replace the ailing
video-rental industry in Singapore. By paying for a movie to be shown on TV,
it would provide more than an adequate replacement to cinema going or video
rental.
With pay-per-view, it would probably widen the choices one has and injects interactivity
into television viewing, especially if programmes are played immediately on
demand.
Certainly, pay-per-view is another option viewers can have in this ever-changing
media world. However, for it to replace or even be on par with advertising as
a form of revenue generation is unlikely.
REFERENCES
Books
Shawcross , W . (1997) . Murdoch: The making of a media empire (Rev . ed .)
.
New York : Simon & Schuster .
Willis , E . , & Aldridge , H . (1992) . Television , cable and radio: a
communications approach . New Jerseys : Prentice-Hall .
Traber , M . (1993) . Communications ethics . In G . Gerbner (Ed .) , The
global media debate . (pp . 151-159) . Norwood , NJ : Ablex
Aw , M . & Lek , S . (1997) . The impact of cable on Singapore's broadcast
scene . Final year project . SCS-NTU
Database
HBO finds Asia a tough market ( 24 Aug 2000) . Reuters business briefing .
Retrieved August 24 , 2000 , from NTU library database on the World
Wide Web : http://www.ntu.edu.sg/library/ntuexam/rbb/rbb.htm
URL
Ministry of information and the arts [ On-line ] . (2000) . Available :
http://www.gov.sg/mita/
Singapore broadcasting authority [ On-line ] . (2000) . Available :
http://www.sba.gov.sg
Singapore Cable Vision [ On-line ] . (2000) . Available : http://www.scv.com.sg