Why are media giants going digital and investing in startups? (LIVE BLOG)

We’re seeing media giants take baby steps in the technology and startup scene, from Singapore’s MediaCorp investing $40 million in luxury e-store Reebonz and launching a startup fund and incubator program called ‘The Mediapreneur’, to Indonesian digital newsstand Scoop raising S$3 million ($2.4 million) series B funding from Indonesia’s Kompas Gramedia.

So what’s attracting these giant conglomerates to startups like bees to honey? Founder and CEO of AdzCentral Reza Behnam takes to the stage to find out more from MediaCorp’s strategic planning head Guillaume Sachet and Kompas Gramedia digital planning director Edi Taslim on this trend as well as the future plans of these corporations.

#15:27: Our guests take to the stage.

#15:28: A quick run down: MediaCorp is one of the two bigger media companies in Singapore – with a wide portfolio of subsidiaries. More recently, we have ventured into the technology and startup space.

#15:30: Kompas Gramedia has newspaper, hotel chains, TV free-to-air, magazine groups, and event organizing.

#15:32: Why are media companies investing in technology and startup space? Guillaume says that consumer consumption patterns are changing. It also sees a shift from traditional to digital advertising. He adds that he sees a shift in the way people consume content, moving into customer intimacy trend. The Group is trying to develop in the digital and startup space ourselves. If not, they will invest or acquire.

#15:33: Edi says Kompas Gramedia’s approach is the same; they want to stay relevant to the digital space. For media companies – very natural to go into digital – they want to look into new ideas, new startups, and youths to collaborate with.

#15:34: In UK and Denmark, Behnam pointed out that digital advertising spend has surpassed TV. It’s probably the future we are heading towards. Can media not be disrupted from people spending too much on digital?

#15:35: Sachet says it is inevitable, but we can try to ride on the same wave. That’s why they have launched their own platforms. it tries to disrupt the pay TV markets through Toggle. He thinks that MediaCorp has the right team and assets to disrupt instead of being disrupted.

#15:36: He adds that he will be working very closely with startups, complement them, and not override their innovation.

#15:37: Taslim says that Kompas Gramedia started off as print media. In 2008, it was given a fund to grow the digital business. “We have an independent policy to run the business,” says Taslim.

#15:40: Having a separate entity would also mean having a different mindset and a different way of running a business, says Sachet.

#15:45: Sachet: We have been trying to think of how to nurture innovation within MediaCorp. ‘The Mediapreneur program’ focuses on early stage investment, and recently launched a proof-of-concept incubation program, which gets them to work with MediaCorp closely for about six months to one year. With these two vehicles, we are thinking of how to get these startups to work with us on a strategic manner.

#15:48: How do you manage strategic returns? Sachet says they are more conservative than the VCs. The reason for them being so is that they can get immediate, real-time feedback from real consumers through working together.

#15:49: We have introduced ‘The Intrapreneur’ for our internal MediaCorp staff who would go through the same process that ‘The Mediapreneur’ goes through. In a way, innovation starts not just from outside of the corporation, but within MediaCorp as well.

#15:50: “How can startups tap on Kompas Gramedia and MediaCorp?” asks Behnam. Taslim would prefer a demand-driven approach from the parent company, and then take it from there. As for Sachet, he says that startups should convince them on their product and is something they can build in the long term.

#15:52: Time’s up, session ends.

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This is a part of our coverage of Startup Asia Jakarta 2013, our event running on November 21 and 22. For the rest of our Startup Arena pitches, see here. You can follow along on Twitter at @TechinAsia, and on our Facebook page.

(Editing by Terence Lee)