Alibaba-Backed South China Morning Post Saw Revenue Drop 50% in First Quarter
Alibaba-Backed Newspaper Says Revenue Dropped 50% in Quarter
(Bloomberg) -- South China Morning Post, the Hong Kong newspaper backed by Alibaba Group Holding Ltd., saw its revenue plunge by half in the first quarter as advertisers cut budgets amid months of social unrest and the coronavirus pandemic.
As early as mid-summer, advertising sales may begin to recover as the pandemic eases in Hong Kong, Gary Liu, the paper’s chief executive officer, said in an interview. The publication, which said in April it would cut jobs, lower executives’ salaries and ask some workers to take unpaid leave, has no plans for more such moves, Liu said.
The newspaper and Hong Kong’s media industry have been rocked by the pandemic and months of political protests against Beijing’s tightening grip on the city, a double-whammy that’s caused the city to register its worst quarterly economic performance on record. A potential third blow has arrived in the form of a new security law crimping political freedoms. It’s too early to tell how the legislation being drafted by China for Hong Kong will affect media in the city, Liu said.
“We are operating in a new normal,” Liu said. The pandemic has accelerated the paper’s plan to seek new revenue sources, including charging subscription fees for some online news it has previously published free, Liu said.
The South China Morning Post began offering more of its news free on the internet after Alibaba agreed to buy the 117-year-old paper in 2015 from Malaysian billionaire Robert Kuok for HK$2.06 billion ($266 million). Alibaba has never interfered in newsroom decisions and has always respected editorial independence, Liu said.
Struggling Hong Kong newspapers include Apple Daily, led by pro-democracy media mogul Jimmy Lai. Advertising income has slumped to almost nothing because of political retaliation and the pandemic, Lai has said, pleading for subscribers to sign on again after the total fell below 600,000 from about 800,000, he said in late April.
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