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    Southeast Asia
     Nov 29, 2007
Malaysian media giant grasps for Internet
By Anil Netto

PENANG - The media battle for Malaysian hearts and minds, pitting the government-controlled print and electronic media against critical Internet websites and blogs, is heating up in the runup to general elections. Now, Malaysia's largest private media conglomerate, Media Prima, has unveiled big investment plans to generate Internet content, a revenue diversification strategy aimed at getting a larger slice of the growing online advertising pie.

At the same time, some analysts view the company's plans as a veiled attempt to erode the present influence and reach of

independent Internet-based news providers. Media Prima is believed to be closely linked to the dominant ruling political party, the United Malays National Organization (UMNO). The company is also highly profitable: in November, Media Prima announced "exceptional" financial results for the nine months ending in September, with profit before tax climbing 98% from a year earlier to 101.8 million ringgits (US$30.2 million).

Those revenues are generated partially through its control of all four private free-to-air television networks - TV3, ntv7, 8TV and TV9 - through which it has seized 54% of Malaysia’s television audience, up from 47% last year. Its main competitors, satellite pay-TV group Astro and state-owned RTM, command 29% and 17% respectively, giving Media Prima large sway over the local television market’s advertisement pricing.

Malaysia's mainstream television news - apart from al-Jazeera's news bulletins, which are relayed over Astro and sometimes includes news on Malaysia - in the main reflect favorably on UMNO politicians and government policies, while opposition and dissident groups receive little if any coverage. Media Prima also owns the New Straits Times group, which owns the country’s top-selling Malay-language newspaper, Harian Metro, and the English-language pro-government New Straits Times.

Having recently acquired all of Malaysia's main private television stations, the company is turning its attention and finance to the Internet in a bid to cash in on expanding online ad revenue and diversify its revenue sources. Media Prima will compete for viewers and readers with a number of small but nifty operators, some of which have garnered huge readerships. Those include Malaysia Today and Malaysiakini, both of which receive tens of thousands of daily visitors and have on occasion faced harassment from government authorities.

Independent news websites and blogs have enjoyed a surge in popularity on the back of two huge demonstrations and retaliatory government crackdowns in the heart of Kuala Lumpur, which the mainstream media arguably failed to report accurately or adequately. The first protest, which on November 10 called for wide-ranging electoral reforms, was downplayed in the mainstream media, apparently in hope that it was just a blip on the political landscape.

In contrast, news of the second rally, where protestors called for an end to the marginalization of the minority ethnic Indian community, was splashed on the front pages of the pro-government newspapers with aspersions cast on the organizers' intentions while damage to property and injuries to a few police personnel was played up.

It was left to al-Jazeera and independent websites and blogs to report what really transpired on the streets of Kuala Lumpur. Al-Jazeera's on-the-spot reporting of heavy-handed police action against one section of peaceful demonstrators ran counter to government assertions that the police had acted with the utmost restraint. At one stage, the television station ran footage of the police using water cannons even as a cabinet minister was insisting that the police had reacted reasonably.

Many independent news providers posted al-Jazeera's news coverage onto their blogs and websites, while others offered up scathing commentary about the government's excessive use of force against the protestors. The mainstream media now arguably faces its most serious credibility crisis to date, more so even than when news blackouts were imposed on the pivotal reformasi protests of 1998.

Receding thought control
With increasing numbers of Malaysians wired to the Internet, the government's once tight control over the traditional media - television, radio and the newspapers – is now unable to mold and control popular perceptions as it could in the past.

That would seem to make Media Prima’s Internet plans all the more crucial from the government's perspective. It's also crucial to the company’s long term profitability. Print media ad revenue is gradually sliding, with its share of total advertising falling to 59% from 63% in 2002. "We have seen proof of how online revenue has become big in other countries, and even there things are still pretty much at the infant stage right now," Media Prima group managing director Abdul Rahman Ahmad said in an interview last month with the business weekly The Edge.

In its bid to diversify its income revenue, Media Prima says it plans to focus on entertainment programs - not just reruns of shows already screened on television, but original content produced solely for the Internet. The commercial challenge will be to get a small portion of its existing viewers to pay a small monthly fee for online content using a subscription-based or pay-per-download model. Media Prima might also move to sell movies, games and music on-line, say analysts.

The company is clearly banking on state-owned Telekom Malaysia to invest in up to 13 billion ringgits worth of infrastructure for high-speed broadband in selected urban areas and 56 billion ringgits for the whole country under the telecom conglomerate's "fiber-to-the-home" and "fiber-to-the-curb" initiatives. The current broadband penetration rate in Malaysia is less than 5%.

Moreover, Media Prima is reportedly making plans to boost its online news presence. It already has major news websites for each of its three main newspapers - the Malay language Berita Harian and Harian Metro and the New Straits Times. Popular independent and critical websites such as Malaysia Today and Malaysiakini, however, have already surpassed the New Straits Times' current Internet reach.

Over the past couple of weeks, they have also closed in on Harian Metro website's large readership, judging by comparison charts generated on Alexa.com. These independent websites operate at only a fraction of the resources available to established newspaper organizations and it's not clear that by dedicating even more resources exclusively for Internet content that Media Prima will make inroads into the alternative news market without a critical shift to how its news is gathered and presented.

Given the popularity of alternative news and alternative sources of information, media analyst Mustafa K Anuar predicts that Media Prima will try to tap into this market by offering a package of news and information to Internet users in the hope that it could wean a section of them away from the critical websites and blogs.

"Its entertainment wing can also play a potential role in helping to divert the attention of the general public away from the social-political websites and blogs," said Mustafa. But, he adds, it won't be easy for government-linked Media Prima to win over the hearts and minds of already discerning Internet news hounds, particularly if the kind of news and information provided remains "as bland and unbalanced, if not distorted, as the ones that are available on the group's stable of newspapers".

Zaharom Nain, an academic who has researched media ownership structures, agrees: "If they are going to come up with the same type of news that they show on television, they are not about to challenge the alternative voices out there; nor will they be able to attract more people."

They will probably only attract the same young people that are attracted to the entertainment "fluff" on their television stations, he added. "In terms of mounting a challenge to the social political media already on the Internet, it is fairly unlikely they will succeed."

Anil Netto is a Penang-based writer.

(Copyright 2007 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

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