FO­CUS ON DIG­I­TAL REV­ENUE STREAMS

Group has ini­ti­ated strate­gic ‘busi­ness-to­con­sumers’ ini­tia­tives and is set to ben­e­fit from REV Asia Hold­ings ac­qui­si­tion

New Straits Times - - Business -

KUALA LUMPUR

ME­DIA Prima Bhd, Malaysia’s lead­ing fully-in­te­grated me­dia group, seeks to grow its dig­i­tal and non-tra­di­tional rev­enue streams through strate­gic busi­ness ini­tia­tives launched last year and early this year.

Group chair­man Datuk Seri FD Iskan­dar said it had ini­ti­ated key ini­tia­tives last year to en­able new rev­enue streams while con­sol­i­dat­ing its mar­ket share in the core ad­ver­tis­ing rev­enue.

“The group had in 2016 launched a num­ber of key ven­tures that are ‘busi­ness-to-con­sumers’ in na­ture, such as our home shop­ping plat­form, CJ Wow Shop, re­vamped on­line video stream­ing sub­scrip­tion ser­vice, ton­ton, mo­bile gaming and dig­i­tal life­style ap­pli­ca­tions for mo­bile users.

“Re­cently, the group also an­nounced the ac­qui­si­tion of REV Asia Hold­ings Sdn Bhd which sig­nif­i­cantly strength­ens Me­dia Prima’s dig­i­tal reach to de­rive rev­enue from the growth in dig­i­tal ad­ver­tis­ing,” he said in a state­ment.

Group man­ag­ing di­rec­tor Datuk Seri Am­rin Awalud­din said while it recog­nised the tough op­er­at­ing en­vi­ron­ment’s im­pact on its per­for­mance, Me­dia Prima will evolve from a tra­di­tional me­dia group to one that is dig­i­tal first with di­ver­si­fied rev­enue streams via a trans­for­ma­tion ini­tia­tive that is al­ready un­der­way.

Me­dia Prima plans to de­rive ad­di­tional rev­enue streams by ex­pand­ing its mar­ket base into re­gional mar­kets via the group’s tele­vi­sion, con­tent pro­duc­tion and out-ofhome busi­nesses, he added.

“Though we are con­tin­u­ously re­view­ing our busi­nesses, the group will forge ahead with trans­for­ma­tion ef­forts to re­main rel­e­vant and de­fend its lead­er­ship po­si­tion.

“We will con­tinue to im­prove cost ef­fi­cien­cies and make pru­dent in­vest­ments in ar­eas that would pro­vide us with a com­pet­i­tive ad­van­tage,” he said.

While Me­dia Prima has ven­tured into new dig­i­tal and con­sumer based ini­tia­tives to complement its tra­di­tional me­dia seg­ments, these ini­tia­tives re­main in ges­ta­tion pe­riod.

Am­rin said the tra­di­tional me­dia in­dus­try to­day was fac­ing de­clin­ing ad­ver­tis­ing ex­pen­di­ture (adex) fol­low­ing the tough macroe­co­nomic con­di­tions, in­creased com­pe­ti­tion, tech­nol­ogy dis­rup­tions and changes in con­sumer be­hav­iour.

“The ex­pected out­look for 2017 was equally chal­leng­ing. None­the­less, we are cau­tiously op­ti­mistic on the po­ten­tial of our new busi­ness ini­tia­tives even though they re­main in ges­ta­tion pe­riod,” he said.

The group had an­tic­i­pated a pro­longed pe­riod of mar­ket stag­na­tion, with a flat or lower ad­ver­tis­ing rev­enue recorded by its me­dia plat­forms with the ex­cep­tion of its out-of-home and dig­i­tal plat­forms.

“Fac­tors such as cus­tomer frag­men­ta­tion, tech­no­log­i­cal ad­vance­ments, a shift in tra­di­tional ad­ver­tis­ing to dig­i­tal me­dia ad­ver­tis­ing and in­creased com­pe­ti­tion from new en­trants and global me­dia play­ers con­tin­ued to pose chal­lenges to the group dur­ing the first quar­ter of this year.”

Me­dia Prima recorded rev­enue of RM272.2 mil­lion and net loss of RM41.4 mil­lion for the first quar­ter ended March 31 2017.

The group saw a 10 per cent rev­enue re­duc­tion from the cor­re­spond­ing quar­ter a year ago due to the lower ad­ver­tis­ing and news­pa­per sales as tra­di­tional me­dia plat­forms face on­go­ing chal­lenges of sub­dued adex and shift to dig­i­tal me­dia.

Datuk Seri FD Iskan­dar

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