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.