Media Prima looking for ways to beef up earnings

Kamal: ‘Collectively, we are still the number one channel where we still command about 35 to 36 market share of total viewership, inclusive of pay TV.’

Company plans more creative advertising content during peak hours

Media Prima Bhd’s television network division, which is the mainstay of the group, is looking at non-traditional avenues to beef up its profitability, which has been declining recently.

The group is looking to come up with more creative advertising content for clients during its peak hours, which have seen growth in viewers.

Currently, Media Prima operates four free-to-air television channels in Malaysia, namely TV3, NTV7, TV9 and 8TV. It also recently relaunched the over-the-top (OTT) service called Tonton.

According to its television networks chief executive officer Datuk Kamal Khalid, contrary to popular belief, the company’s number of viewers in the prime time belt from 7 pm to 11 pm has actually increased year-on-year.

“It would be good to think of a strategy on how to further monetise on this as viewership during the prime time this year has been very healthy.

“Collectively, we are still the number one channel where we still command about 35% to 36% market share of total viewership, inclusive of pay TV.

“We have seen a reduction in our viewership in our off prime time belts because there are so many different platforms now competing for people’s attention.

“So, from our perspective there is no reason to invest heavily in this off prime time hours because the increase of viewership will be marginal and the opportunity to monetise will also reduced.

“Thus, it is better for us to put the investment in the prime time belt where we can still gain some eyeballs,” he told StarBizWeek recently.

To further monetise airtime during these hours, Kamal says the key thing for them is to try to understand clients’ needs and that is still an ongoing process.

“Previously, advertising was a very straightforward sales operation but now advertisers, especially for consumer goods - want a lot more specialisation.

“Clients now have now a lot more product lines that specifically targets different audiences.

“So that’s one thing we are going to do,” he says.

On top of that, Kamal says clients now have many other different platforms to advertise and that pose challenges to their revenue.

“One is because there is more competition in the space, and there is digital of course where people are beginning to put a lot money there.

“We have to try to find ways to convert the fantastic viewership that we have into revenue and we have to find ways not to solely rely on the traditional type of advertising going forward.

“This is important because our free-to-air television channels are still the main source of income,” he says.

Digital and OTT

This strategy comes in the realm of increasingly popular digital and on-demand over-the-top (OTT) entertainment and news platforms such as Netflix, iflix, Telekom Malaysia, Internet protocol television (IPTV) service HyppTV and YouTube.

For the nine-months ended Sept 30, the profit after tax of Media Prima’s television networks division declined by 82% year-on-year to RM10.4mil.

The division was the group’s top earnings contributor which recorded RM72.9mil profit after tax in 2015.

At the group level, Media Prima slipped into the red for the first nine months this year as it posted a net loss of RM64.2mil or 5.79 sen per share, compared with a net profit of RM107mil or 9.65 sen per share a year ago. Revenue fell 8.5% to RM970.4mil from RM1.06bil.

This is mainly due a one-off restructuring expense for its print media operation.

Meanwhile, on non-advertising revenue, Kamal says the group has launched its home shopping business about seven months ago and has also relaunched its OTT services early this year.

“We launched our home shopping business in April, in collaboration with South Korea’s CJO Shopping Co Ltd (CJO).

“Because CJO is the expert in this area and is the largest home shopping company in its home country, this is progressing really well.

“The other avenue is our own OTT called Tonton which was launched six years ago primarily for viewers to catch up on missed television content.

“But, we relaunched it early this year with paid users for the premium content.

“It now has about six million registered users and the prospects is promising, but it’s too early to gauge on its monetary contribution to the division,” he says.

Tonton registered users enjoy limited free content and have to pay RM3 day, RM10 a month or RM96 a year to gain access to the television networks’ entire library.

“Our collection probably have the best collection of local content to offer.

“If we reach the expected critical mass, I supposed the next step is to take it regionally to Indonesia, Singapore and Brunei,” he says.

On going digital, Kamal says MyTB Broadcasting Sdn Bhd’s fees of RM12mil for standard definition and RM25mil for high definition are too high.

“We have raised the matter and they have listened and looking at ways to bring down the transmission cost.

“Other options of going digital are to work with Telekom or Astro; we would be happy to work with them too,” he says.

Going forward, Kamal sees the next couple of years as a period of transition due to the change in focus and strategy of the division in line with current demands.

“The transition is to explore more of non-advertising revenue generators such as Tonton and home shopping.

“We just started to implement them this year and there is a logistical transition period of two to three years.

“Additionally, there is pressure to maintain viewership and revenue of our free-to-air channels as well,” he says.