It wasn’t a big 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 overheads of a news business that was only founded in June 2015.
“We always knew this going to be a tough business.
“The chances of failure are very high,” says publisher Daniel Yap. “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.”
It seems that politics and news reporting doesn’t make for a viable business in Singapore. 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 major 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.
Business rules apply
Independent news startups are often driven by the ideal of fostering a more open media ecosystem. But the reality remains that they still need money to sustain their operations.
As with traditional mainstream media, financing the business means being able to attract advertisers or having enough people to want to pay for their content, or both.
In 2016, The Middle Ground began raising funds via the crowd-sourcing website Patreon, where 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 told Splice before the site was shuttered.
Because they are not borne out of legacy media, online Singapore news startups have, rightly or wrongly, been labelled “alternative”. This casts doubt in the minds of advertisers.
Yap says many advertisers shun independent news websites because of the perception that they are anti-establishment. “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 says.
“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 TOC, most advertisers stayed away because they thought the news website spelled trouble,” she says.
Nanyang Technological University communications professor Ang Peng Hwa says that, culturally, most Singaporeans avoid 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 says. “And very few people are willing to put funds into such projects because they don’t want to appear as anti-establishment.”
A penny for your news
Another stumbling block for online news sites is readers’ unwillingness 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 remain low. In Singapore, a mere 8% 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 remain 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: Will people pay for news, if it matters to them at all?
“Readers must step up. They must want to care and be willing to say that high-quality news is important to me,” says Yap.
Too small to fail?
Startups, while small today, play a larger role in providing an alternative view and herein lies the lifeline, says Ang. “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 new advertising opportunities and funding models for alternative sites.
Ang observes that the challenges online news sites face have spurred them to become more innovative in experimenting with new business models and content to attract readers. “Some successful websites, like Mothership.sg, produce sponsored content and objective news stories. That may be a viable model,” he adds.