Media Prima Set to Reap Strong Growth in Revenue

By ANNA MARIA SAMSUDIN

MEDIA Prima Bhd may realise significant growth in revenue following the

acquisition of a 100 per cent stake in television station Natseven TV Sdn

Bhd (ntv7).

Group managing director and chief executive officer Abdul Rahman Ahmad

said the expected revenue growth is based on ntv7′s strong revenue track

record, which was in the range of RM100 million to RM150 million audited

sales revenue per annum for the past three years.

“If we are able to maintain the track record, then this deal will be

very profitable for the group,” he said.

In addition to this, the purchase would help the group to manage its

cost structure more effectively.

In fact, it is estimated that the consolidation of Malaysia’s private

free-to-air TV networks would help the group realise significant savings

in costs annually.

This can be done through better economies of scale, operational

efficiencies and the reduction in destructive discounting of advertising

rates.

“We think that we are now able to operate in a more profitable manner.

ntv7 too would be more viable upon the completion of this acquisition,”

he told Business Times in Kuala Lumpur recently.

Abdul Rahman highlighted that ntv7 currently attracts 30 per cent of

total advertising expenditure (adex) in the country, the second highest

after TV3.

He said the strong brand created over the years, through the tag line

‘The feel good channel’, has earned ntv7 an 11 per cent share of all TV

audience nationwide.

“The acquisition would be earnings enhancing for us and will create a

lot of shareholder value, going forward,” he added.

Following the RM90 million acquisition of ntv7, Media Prima will emerge

as the sole owner of Malaysia’s private free-to-air TV stations.

With the inclusion of ntv7, Media Prima now owns four TV networks –

TV3, 8TV, Channel 9 and ntv7. The proposed deal, which will be funded by

internal funds, is expected to be completed by early December.

Abdul Rahman also said that the consolidation of the country’s

free-to-air TV industry would benefit viewers.

With all these TV stations under one roof, it is now able to well

manage disruptive competition in the TV industry and eventually able to

give more focus to improve its contents and enhance viewers’ satisfaction.

“Even so, we would like to assure advertisers that although Media Prima

now owns all the private free-to-air stations, this does not mean that we

will drastically increase the advertising rate.

“Instead, we plan to work more closely with the advertisers and help

educate them about the various media platforms that they can use to best

reach their target customers,” he added.