Southeast Asia’s big media emerges from slumber, finds digital media revolution at its doorstep

While traditional media in the United States have been reeling from the digital media revolution, registering millions in losses, shutdowns, and layoffs, their counterparts in Southeast Asia have been insulated from its devastating effects.

But maybe not for long.

Well aware that the window to adapt is fast closing, the region’s big media are finally getting more serious about investing in technology. Take this recent piece of news as an example: Scoop, a popular digital newsstand in Indonesia, has raised SGD 3M (USD 2.4M) in Series B funding from Kompas Gramedia, the country’s largest media conglomerate.

It’s certainly a good result for Scoop, which previously raised SGD 1M in Series A funding, hinting at a substantial increase in valuation for the company. The service currently has 210k monthly active users, with 90 percent coming from Indonesia.

Willson Cuaca, CEO of Apps Foundry, the company behind Scoop, says that this is the first non-controlling minority stake the media giant has taken in a foreign entity (App Foundry is based in Singapore). Prior to this, Kompas has either been developing its own products or acquiring other companies.

This significant development is no isolated incident.

Singapore Press Holdings (SPH), MediaCorp, and The Star Media Group — dominant in Malaysia and Singapore — have all increased their activities in the digital media space, venturing even beyond internet display advertising, which can hardly replace traditional ad revenues due to the ever-expanding amount of online inventory that’s available.

These three companies also face a more compressed timeline compared to Gramedia: Singapore and Malaysia are somewhat ahead of Indonesia when it comes to tech adoption. Combined with a smaller market in terms of population size, the pressure on them to change is also inevitably much higher.

Besides developing its own online products, SPH has been rapidly diversifying in the past year, investing in restaurant reservation site Chope and acquiring vehicle classifieds site sgCarMart for USD 48M, considered by many to be a fair valuation, and possibly even overpriced.

The company has been facing a slow but steady decline (see graphic below) in newspaper readership, and is counting on its events and property arms to boost its bottom line.

Source: SPH Annual Report 2012

More recently, The Star Media Group, a media conglomerate in Malaysia, has gone a step further — it launched a RM 20M (USD 6M) startup accelerator that focuses on digital media startups. The move has garnered cautious praise from the country’s tech startup players, although some noted that the company might be better off partnering with an existing accelerator instead.