Media Prima, Malaysia’s Integrated Media Group, seeks to increase its digital and non-traditional revenue streams through strategic business initiatives launched in 2016 and early 2017.
Datuk Seri FD Iskandar, Group Chairman of Media Prima, said, “The Group has initiated key initiatives in 2016 to enable new revenue streams while we consolidate our market share in the core advertising revenue. The Group had in 2016 launched some key ventures that are ‘Business to Consumers’ in nature such as our home shopping platform, CJ Wow Shop, the revamped online video streaming subscription service, tonton, mobile gaming and digital lifestyle applications for mobile users.”
He also touched on Media Prima’s recent game-changing acquisition of REV Asia Holdings, which is to strengthen the company’s digital reach and bolster its growth in digital advertising.
Datuk Seri added that the Group had anticipated a prolonged period of market stagnation, with a flat or lower advertising revenue recorded by our media platforms with the exception of our 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 2017,” he shared.
The Group announced yesterday that it had recorded revenue of RM272.2 million and Loss After Tax (LAT) of RM41.4 million for the first quarter ended 31 March 2017.
Media Prima recorded a reduction in revenue by 10% against the corresponding quarter of 1QFY16. This is attributed to the lower advertising and newspaper sales as traditional media platforms faced ongoing challenges of subdued ADEX and shifted to digital media.
Dato’ Sri Amrin Awaluddin, Group Managing Director of Media Prima said, “The traditional media industry today is faced with declining Adex following the tough macroeconomic conditions, increased competition, technology disruptions and changes in consumer behaviour. The expected outlook for 2017 is equally as challenging.”
“Nonetheless, we are cautiously optimistic about the potential of our new business initiatives even though they remain in a period of gestation. The launch of our home shopping business CJ Wow Shop, for instance, has helped cushion the decline in traditional revenue by contributing RM89.1 million over the last 12 months.”
He added the Group also plans to derive additional revenue streams by expanding its market base into regional markets via the Group’s television, content production and out-of-home businesses.
The year 2017 saw Media Prima build upon the new business initiatives that were launched in 2016 to generate new revenue streams for the Group.
Some of the group’s new expansions include:
• Bringing its video streaming platform tonton to regional shores. Most recently Media Prima Television Networks (“MPTN”) struck a partnership with Singapore’s key telecommunications provider Singtel to expand tonton’s customer base into Singapore.
• The company’s home shopping front, MPTN’s CJ Wow Shop has expanded its presence to target Chinese audience by launching the Mandarin broadcast on ntv7 and 8TV. CJ Wow Shop also introduced live broadcast and increased broadcasting hours. The moves have yielded positive results, demonstrated by the 15.6% growth in net sales Quarter on Quarter (1QFY17 vs. 4QFY16).
• Media Prima Radio Networks(“MPRN”) ramped up its already strong digital presence by launching its podcast platform, Ais Kacang and e-commerce service, SuperDeals. The new initiatives should provide MPRN with new ways to entice advertisers by offering an all-rounded campaign platform which includes on-air and digital space.
• Media Prima Digital’s (MPD), latest acquisition of Rev Asia, is expected to contribute positively to MPD moving forward once completed. MPD plans to bank on the new skill sets obtained from the recent acquisition to further boost its revenue via digital advertising. The acquisition also resulted in Media Prima to have the third highest digital reach in Malaysia behind only to Google and Facebook.
• Media Prima’s Out-of-Home (OOH), Big Tree Outdoor (“BTO”), is expected to benefit from the rollout of assets for rapid transit concessions scheduled to commence later this year. Digital advertising solutions/assets are currently contributing to 10% to BTO’s total revenue.
• The Group’s Content Creation arm, Primeworks Studios will explore potential new intellectual properties for animation and co-production with external broadcasters while expanding the current content sales in the overseas market.
• In Print media, the New Straits Times Press (M) Berhad (“NSTP”) will continue to defend its traditional print business while continuous cost rationalisation initiatives will continue to be implemented while the digital products and services launched in 2016 such as Full-A-Mark remain in a period of gestation.
Dato’ Sri Amrin concluded that while the Group recognised the tough operating environment’s impact on the Group’s performance, Media Prima will evolve from a traditional media Group into one that is digital first with diversified revenue streams via a transformation initiative that is already underway.
“Though we are continuously reviewing our businesses, the Group will forge ahead with our transformation efforts to remain relevant and defend our leadership position. We will continue to improve cost efficiencies and make prudent investments in areas that will provide us with a competitive advantage,” he said.