A short primer on the Southeast Asian media market with particular focus on digital media and on the Malaysian context. When you work with a media company, especially when you are outside of your home market, you have to start with some very basic grounding in the market.  What works today?  What doesn't?  What are your hypotheses for why the market has reached this particular point in its evolution?   Without doing this you run the risk of assuming everything works the way it does in Silicon Valley.  Every market has its own unique fundamentals.  Without at least developing a bit of a primer on these fundamentals, a consultant runs the risk of developing plans, strategies and training that is politely acknowledged and then equally politely ignored. 

So, here is a short primer using publicly available sources to describe the infrastructure and advertising support for media, especially online media, in Southeast Asia.  My first step in understanding where there are business model opportunities for MalaysiaKini. 

Southeast Asian Media Overview

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Infrastructure: In the developed markets of Southeast Asian - Malaysia, Singapore, Indonesia, Philippines, Thailand and Vietnam - the markets fall into two clear groups.  First, there is Malaysia and Singapore where internet and mobile penetration rates are approaching or in the case of Singapore exceeding rates in North America and Europe. Second there are the other markets where penetration is growing quickly, but is still concentrated in major urban areas - Bangkok, Jakarta, Manila etc.

Advertising:  In the developing media markets, media spending in online has remained quite low.  Low penetration rates for online and resulting small market sizes contribute to low online ad spend.  Another potential contributing factor is the large role of foreign owned sites in local internet behavior.  These sites have mostly been focused on developing revenue from their North American, European and Japanese affiliates.  Little focused sales pressure or other efforts to develop revenue models to fit the local audience behavior in Asia.  Little focus from these international players contributes to the limited development of advertising markets as well as other revenue streams in Southeast Asia.

In Malaysia, the advertising market continues to be heavily concentrated in newspaper and television with online advertising accounting for less than 1% of total spend according to Nielsen; compare this to the 14% of ad spend estimated to be in online in the US.  In Malaysia, major media companies often with "strong" relationships with the government and major corporations dominate the market for advertising, driving marketers to their traditional media outlets over more performance oriented online players.  Until the demand for online advertising turns the corner either through the active participation of the major online portals - Google, Facebook, and Yahoo - or a change in the fundamental dynamics in the local media market. 

Questions to Address:

1.  Advertising. 

• How much can the domestic advertising market contribute to long-term sustainability, given the small role that online plays in the market?

• Are there types of domestic advertising spending that can be cultivated to drive the overall advertising market? Classifieds?  Small business and directory?

1. Partnerships.

• Given the strong role of some international partnerships, are there local Malaysian partnerships that will help drive new revenue with minimal additional costs.

• There are a lot of additional questions to ask around the content revenue models (subscriptions, syndication, ...) that need to be addressed next.