In The Mass Media

The Big Read: A battle on two fronts leaves M’sia’s media on the ropes

M’sia’s news industry is entering a period said to be even more restrictive than the 22-year Mahathir era

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On March 14, 2016, The Malaysian Insider, one of Malaysia’s top news sites, closed, for “commercial reasons”. Photo: The Malaysian Insider

SINGAPORE — In February 2008, a news portal called The Malaysian Insider (TMI) went online, joining a handful of feisty online news outlets such as Malaysiakini, Malaysia Today and Merdeka Review which together heralded a refreshing change in a media industry long shackled by government restrictions on reporting.

Those were heady days. A month later, a general election saw the ruling Barisan Nasional (BN) coalition suffer a shocking setback when it failed to gain its customary two-thirds parliamentary majority.

The result was attributed, among other things, to greater media freedom under the administration of then Prime Minister Abdullah Ahmad Badawi — who took over in 2003 from long-time Premier Mahathir Mohamad, allowing dissent and freedom of expression, within some limits, to flourish briefly.

Protected by a 1990s pledge of no Internet censorship by Dr Mahathir — made while he was wooing technology companies as investors — the online news sites provided a hungry Malaysian public with a lively diet of news on politics, business and life that the mainstream newspapers and television stations, which still operated under tight restrictions, could not or would not.

“We got the news that mattered, whether from the ruling government or the opposition. We were fortunate that we had cultivated a list of insiders and whistle-blowers who were willing to help us with information,” former TMI chief executive officer Jahabar Sadiq told TODAY in an email.

They did, at least until last month. On March 14, TMI — which had become one of Malaysia’s top news sites — closed, its owners said, for “commercial reasons”. TMI’s closure came after another portal, The Rakyat Post, which started operations in October 2013, temporarily shut down on Feb 29 because of funding problems. The Rakyat Post resumed operations in the middle of last month.

Government pressure played a part in TMI’s shutdown. In late February, Malaysia’s Communications and Multimedia Commission (MCMC) blocked access to TMI after it ran a story, quoting anonymous sources, that a panel from the country’s anti-graft agency had evidence to prosecute Malaysian Prime Minister Najib Razak.

To continue reaching its audience, TMI had played cat and mouse with the Internet regulator, publishing on mirror sites for several weeks until it decided to pull the plug.

MCMC is now mulling over new controls on online news sites and blogs, and Malaysia’s news industry is entering a period which journalists and analysts say is shaping up to be even more restrictive than the 22-year Mahathir era.

Critics have charged that the Najib administration is cracking down on the media as pressure mounts over controversies surrounding state firm 1Malaysia Development Berhad (1MDB) and revelations that US$680 million (S$933 million) had been deposited into his private accounts.


That is only part of the story.

In a statement on March 14 announcing TMI’s closure, Mr Ho Kay Tat, the publisher and chief executive of The Edge Media Group, which owned TMI, said the news portal incurred losses of RM10 million (S$3.5 million) in the 20 months since his firm acquired it in June 2014.

“The closure of TMI should serve as a reminder to those of us in the media industry, as well as the public at large, that good journalism cannot be sustained without commercial support. And when good journalism stops, society is the loser,” said Mr Ho.

According to Mr Jahabar, monthly advertising revenue of RM300,000 fell short of expenses of nearly RM500,000 a month.

Besides administrative expenses, TMI also faced the threat of lawsuits and anonymous cyberattacks. In addition, three of its editors were arrested and spent a night in jail over a story on the Islamic penal code, or hudud. Two other executives, included Mr Ho, were also arrested a day later.

Despite the challenges, TMI still garnered a large following, drawing about 1.5 million unique visitors and generating up to 50 million pageviews a month.

Then, on Feb 25, the Internet regulator blocked TMI over the report on the anti-corruption agency panel and Mr Najib. The report contradicted the panel’s official statement, which said it had only advised the MACC to continue its investigations.

MCMC said TMI had breached Section 233 of the Communications and Multimedia Act 1998. That section deals with the improper use of network facilities or network services to convey content that is “obscene, indecent, false, menacing or offensive in character with intent to annoy, abuse, threaten or harass another person”.

The blocking was the death knell for TMI, which lost at least 30 per cent of its readership traffic, and caused advertisers to pull out.

“The media situation in Malaysia today is much worse than the dark days of Mahathir,” said Mr Steven Gan, co-founder and editor-in-chief of Malaysiakini, a pioneering news website which he started in 1999, and which continues to publish today.

“We should know, as Malaysiakini was launched when Mahathir was still in power. Then, we were raided by the police and 19 of our computers were seized. Today, journalists are being arrested, online media has been sued by the Prime Minister, websites are blocked, and laws are being strengthened to further tighten control over the Internet. This is indeed unprecedented,” added Mr Gan in an email interview.


Most online media outlets in Malaysia describe themselves as “independent” and/or “neutral”. They say they are not backed by individuals or companies aligned to the ruling BN government or other factions. Their raison d’etre, they maintain, is holding the government and those in power accountable, as well as reporting both sides of a story.

“I think the online media outlets are neutral in the universally accepted sense. In the eyes of the powers that be, however, things are different as they consider it the media’s job to channel their information to the masses,” said analyst Dr Oh Ei Sun, a senior fellow at the S Rajaratnam School of International Studies.

In contrast, Malaysia’s tightly regulated print and broadcast media are owned by conglomerates viewed as having close ties to the ruling BN government and are generally regarded as mouthpieces.

“I have stopped reading the mainstream newspapers for nearly seven years because of their imbalanced reporting,” said Mr Alex Tan, a senior negotiator for a real estate firm. “The content is skewed to support the political stand of the owners.”

This view is widely held, and has resulted in a drop in many newspapers’ circulation and readership, causing them to plunge into the red.

For example, the circulation of Malaysia’s oldest newspaper, the 170-year-old New Straits Times (NST), plummeted 35 per cent in the first half of 2014 compared to the corresponding period in 2013, from an average daily circulation of 115,570 to 74,711, according to the Audit Bureau of Circulations.

Similarly, Malay broadsheet Utusan Malaysia, which is linked to the ruling United Malays National Organisation (UMNO), fell by about 10 per cent, from 191,302 to 171,663, in the same period.

Former NST group editor-in-chief A Kadir Jasin, who helmed the title from 1988 to 2000, attributed the lacklustre performance of newspapers to two factors: The economy and a lack of editorial independence.

Malaysia’s economic growth is projected to slow to between 4 and 4.5 per cent this year, compared to last year’s 5 per cent.

The rising cost of living has also put the brakes on unnecessary spending, and in a day and age where news summaries can be had for free online, that makes newspapers vulnerable — a trend that is evident around the world, and not just in Malaysia.

“During the era of Dr Mahathir, when the stock market was doing well and the economy was growing by double digits, spending a few ringgit a day on newspapers didn’t make much difference to people’s pockets,” Mr Kadir said in an interview.

“Today, the economy is growing at a slower pace, and prices of goods and services are rising, so people are reluctant to spend more,” he said.

He also lamented the lack of editorial independence, saying the mainstream media is “doing worse than before”.

He said many mainstream media editors today have fallen into a comfort zone. He termed it waiting for “wahyu” — the Malay term for a “divine revelation” — a wry reference to instructions from the powers-that-be.

“Editors choose to be pliant, they choose not to be independent. I don’t know (why), probably it’s easier to toe the line,” he said.

Mr Kadir said that when he headed NST, he “tried to be as free” as he could. “I tried to be impartial, but that entailed a lot of risks and constant explanation to the powers-that-be and arguments about why it should be done this way, why we should not shut the opposition up altogether. It was laborious and only a crazy fellow like me would do it,” he said.

Unlike online media, mainstream newspapers are subject to the Printing Presses and Publications Act (PPPA). Although the government repealed a provision in 2012 that required all publishers and printing firms to obtain an annual operating permit, it still has the authority to grant or deny a publishing licence or to revoke one at any time without judicial review.

Last July, at a time when The Edge Financial Daily and The Edge Weekly, both owned by The Edge Media Group, were doggedly pursuing stories on alleged financial improprieties in the debt-ridden 1MDB, the Home Ministry suspended their publishing permits for three months.

Putrajaya said the issue created a negative public perception of the government and implicated it and the country’s leader in wrongdoing, and this was viewed as being potentially detrimental to public order and the national interest.

After The Edge challenged the suspension, the High Court revoked the ministry’s order on Sept 21 after noting that the minister had failed to “comply with procedural fairness as he did not give particulars of suspension to the applicant”.

The government’s move to suspend the two publications was seen as outdated.

“In the 1980s, when the Internet was still out of bounds to a majority of Malaysians, access to information was rather restricted. It therefore came as no surprise that the government would deliberately threaten to punish newspapers for publishing things it did not like to see,” said Chinese daily Sin Chew in an editorial last July.

“But in modern-day Malaysia, where information is just a click or a tap away, it will be hardly persuasive if the government still resorts to the same old trick to gag the media, especially if the reasons offered are anything but convincing,” the paper said.

Besides the PPPA, both the mainstream and online media are also bound by other laws, such as the Official Secrets Act and the Sedition Act.

Despite the commercial and legal challenges, none of Malaysia’s newspapers have closed down in recent years. That is because these newspapers often have advertisements and subscriptions from government-linked companies, a lifeline for publications struggling to shore up the bottom line.

“By and large, the support — such as government advertisements and the purchase of such newspapers by government departments — given to the mainstream media by the federal government helps to keep them afloat,” said Dr Mustafa Kamal Anuar, a research fellow who specialises in journalism and media at the Penang Institute, a think-tank.

“Today, journalists are being arrested, online media has been sued by the Prime Minister, websites are blocked, and laws are being strengthened to further tighten control over the Internet. This is indeed unprecedented.”

– Mr Steven Gan, co-founder and editor-in-chief of Malaysiakini

Paid content the way forward?

For the media industry — especially news portals — to thrive, it needs to find a way to make money without compromising on its reporting. This means Malaysians need to consider if they are willing to pay for quality news.

Take Malaysia’s pioneer news portal Malaysiakini. It started in 1999 as a free site, but decided on a paid model four years later.

“When we went live in 1999, we were — like all other news websites — giving out free content. While we did earn some money from advertising, that became increasingly difficult following the 2001 dot-com bust, when most Internet start-ups, which were our major clients, disappeared as their funds from venture capital dried up,” said Mr Gan, its editor.

“As an Internet start-up ourselves, Malaysiakini too would have had to close shop. The subscription model was our last attempt to keep it afloat.”

However, Dr Oh, the S Rajaratna School analyst, doubts that the paid model can gain traction.

“Readers are not willing to pay, so crowdfunding won’t work. Readers have to change their mindset, and pay for reading alternative news. Businesses have to be more daring in sponsoring alternative media. All this is missing,” he said.

Mr Gan disagreed, pointing out that Malaysiakini proves people are willing to pay for quality news.

“Few believed we would have succeeded, but interestingly, we did. While we lost a lot of readers after we erected the paywall, many eventually paid a small sum to access Malaysiakini. It took us about three years before we began to break even,” he said.

Revenue for Malaysiakini increased from RM4 million in 2008 to nearly RM6 million in 2015. Its annual subscription of RM150 per person — which has remained the same for nearly 10 years — contributes about half of revenue. Advertising accounts for the other half.

“Understandably, we are unsure about increasing our subscription fees as we have to compete with many new websites which provide free content,” he said.

“The government has finally woken up to the fact that news portals have a huge influence in Malaysia. Rather than improving the media that they either own or control, the government wants to put a leash on us.”

– Former Malaysian Insider CEO Jahabar Sadiq


But commercial challenges are just one part of the obstacle course that media outlets have to navigate.

The Najib administration is poised to further tighten controls on the media. A few weeks ago, MCMC mooted legal amendments that will force news portals and blogs to register with the government as part of a move to regulate online news outlets in the same manner as traditional ones.

Although Communications and Multimedia Minister Salleh Said Keruak said the proposal was not aimed at quelling dissent but is instead part of Putrajaya’s bid to ensure that existing laws keep up with the times, his argument found few supporters.

Neither Mr Salleh nor Mr Nur Jazlan Mohamed, Malaysia’s Deputy Home Minister, who had previously spoken on the subject, responded to requests from TODAY for comment.

However, many critics pointed out that the proposal, if implemented, does not augur well for press freedom in Malaysia.

“The government has finally woken up to the fact that news portals have a huge influence in Malaysia. Rather than improving the media that they either own or control, the government wants to put a leash on us,” said Mr Jahabar.

“The government is sacrificing and killing professional journalism in the interests of politics. In its place will be paid journalism and political gossip — all to keep people from thinking”.

Mr Francis Nantha, The Rakyat Post’s editor, disagreed.

“I don’t see this as being a problem. The new proposal will restrict certain things like seditious comments, pornography or statements that cause political tension, and I support it. I am happy with it,” he told TODAY in an interview.

He is also bullish about Malaysia’s media scene, saying that the Malaysian press is more free than its counterparts in some countries, which he said restricted access to information and people.

In citing an example, he said two Australian journalists managed to get close enough to Mr Najib to ask some questions last month, before being arrested by the police. They were deported three days later.

“Who can walk up to the US President and talk to him? The same rules apply to Singapore’s Prime Minister. Whereas I can walk up to the Malaysian Prime Minister and stand next to him. So you tell me, which country has a freer media?”