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Nov. 17, 2017, 8:55 a.m.
Business Models

Beating the 404 death knell: Singapore news startups struggle to cover costs and find their footing

Political news reporting doesn’t seem to be holding up well as a business in the city-state. And it’s even harder when you’re seen as “alternative” media.

It wasn’t much of a surprise when the Singapore news startup The Middle Ground announced recently that they were shutting down. The site, which managed to pull in a mere $2,200 a month from patrons, couldn’t sustain the overhead of a news business that was only founded in June of 2015.

“The chances of failure are very high,” The Middle Ground’s publisher Daniel Yap told me. “But if you ask me if we have achieved what we set out to do, I’d say yes. We set out with the mission to do great journalism, and to do it independently. I think we have succeeded.”

The Middle Ground is the latest casualty of Singapore’s aversion to independent media. So far, politics and news reporting don’t seem to make for a viable business in the country. A recent survey by the Institute of Policy Studies found that more than a third of the 200-odd news sites and blogs active during Singapore’s 2015 parliamentary election have since gone offline.

Two of the major news sites that shut soon after the elections — Inconvenient Questions and Six-Six News — were each barely two years old. One of Singapore’s first independent digital news providers, 11-year-old The Online Citizen is now down to a one-man operation, after being downsized from a team of four editors.

Independent news startups are often driven by ideals around fostering a more open media ecosystem. But the reality remains that they need to make money to sustain their operations. As with traditional mainstream news media in Singapore, successfully financing the business either means being able to attract enough advertisers or attracting enough people who want to pay for news content, or some of both. Some lifestyle and entertainment-focused sites are doing relatively well, but funding models that can sustain political news coverage continues to elude independent news startups.

In 2016, The Middle Ground had begun to raise funds from individual supporters via Patreon, a U.S.-based crowdsourcing site popular with artists but used by many media organizations to connect with readers directly. Middle Ground readers could make monthly contributions in exchange for exclusive content. (“We aim to raise US$11,000 a month, but that amount is really just a fraction of our monthly costs,” Yap had told me, before the site shut down.)

Because they are not offshoots or projects of legacy media, these online Singapore news startups have, rightly or wrongly, often been labeled “alternative,” a designation that casts doubt in the minds of potential advertisers. (Mainstream news sites eat up most of the traffic to online news and sites in Singapore.)

Many advertisers shun independent news websites because of the perception that they are too anti-establishment, according to Yap.

“Advertising has been difficult for us. Some of them refuse to work with us or engage us commercially because we’re not from the mainstream media,” he told me. “Some have even asked me: ‘Will I get into trouble for advertising with you?’ It’s sounds absurd; but it happens.”

Kirsten Han, co-founder of recently launched Southeast Asia site New Naratif, had a similar experience when she was an editor at The Online Citizen: “With the government gazetting The Online Citizen, most advertisers stayed away because they thought the news website spelled trouble,” she said. (In 2011, the Singapore government ordered The Online Citizen to be classified as a “political association,” not just a news site, restricting among other things the types of funding the organization can receive.)

Nanyang Technological University communications professor Ang Peng Hwa said that, culturally, Singaporeans lean towards avoiding anything that appears to represent political dissent.

“Independent news websites may be seen as questioning the government and opposing it, even when they are fair, objective and balanced,” he said. “And very few people are willing to put funds into a such projects because they don’t want to appear as anti-establishment.”

Another stumbling block for online news sites has been the unwillingness of readers in the region to pay for news.

While a 2017 Reuters Institute survey found that the proportion of people who are willing to pay for news has increased globally, actual numbers in many countries remain very low. In Singapore, a mere 8 percent of locals pay for a regular online news subscription.

Local online news startups have made efforts to provide paid exclusive content to subscribers, but take-up rates are small. New Naratif, inspired by De Correspondent’s subscription model in the Netherlands, is charging a minimum of $52 for exclusive content. It’s acquired some 200 subscribers since launching its digital crowdfunding efforts in September 2017.

Numbers aside, perhaps there is a more fundamental question to be answered in Singapore: Will people pay for news, if it matters to them at all?

“Readers must step up,” Yap emphasized. “They must want to care and be willing to say that high-quality news is important to me.”

Startups, while small today, play a larger role in providing an alternative view and herein lies the lifeline, Ang said. “Where would people who want alternative views go? This may be an opportunity for alternative online news sites to grow.”

Despite the negative perceptions some advertisers may have toward news startups, the digital landscape has opened up a few new advertising opportunities and funding models for these alternative sites.

The extreme challenges online news sites face have spurred them to become more innovative in experimenting with new business models and content to attract readers, Ang pointed out.

“Some successful websites, like Mothership.sg, produce sponsored content and objective news stories. That may be a viable model,” he said.

A version of this interview was first published in Splice Newsroom.

Photo of women in Singapore on their phones by Dickson Phua used under a Creative Commons license.

POSTED     Nov. 17, 2017, 8:55 a.m.
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