Media Prima sees 89% rise in revenue from digital and commerce initiatives
By Digital News Asia February 22, 2018
- In 2017 CJ Wow Shop had 640,000 shoppers and total sales of RM130 million
- tonton, an over-the-top service, expanded its reach to Brunei and Singapore
MEDIA Prima Bhd, an integrated media group, is confident that results derived from strategic initiatives implemented during the financial year ended Dec 31, 2017 (FY17) – including an 89% revenue increase in Media Prima’s total digital and commerce revenue – will accelerate the group’s transformation into a leading digital-first content and commerce company.
Media Prima recorded RM193 million in digital and commerce revenue driven by the increase in demand for digital advertising, rising popularity of digital content and growing e-commerce among consumers.
Media Prima ventured into digital and consumer-based businesses that complemented its traditional media segments under its business transformation plan, Odyssey, in 2016.
The plan enabled the group to generate new and sustainable revenue streams across its media platforms that include television, print, radio, out-of-home advertising, content production and digital.
Among the new business initiatives that performed well in FY17 include CJ Wow Shop. Media Prima’s home shopping business continues to gain traction with a customer base of 640,000 shoppers and total sales of RM130 million for the year.
Meanwhile, the group’s education portal FullAMark, reached over 5,000 subscribers with a 52% conversion rate from registered to paid subscribers, a significant increase from a 15% conversion rate in 2016.
Media Prima Television Network’s tonton, an over-the-top (OTT) service, expanded its reach to Brunei and Singapore, with more plans to expand regionally.
Revenue generated from tonton in FY2017 increased by 38% on the back of higher user subscription to the service as compared to a year ago.
The OTT service – which has over 7.6 million registered users to date and continues to grow by 15,000 users weekly – recorded a significant increase of 84% in hours watched and 104% increase in average watch time.
In video content production and distribution, Media Prima expanded its sales into new digital platforms and territories.
FY17 saw Media Prima’s Primeworks Studios (PWS) securing deals with Netflix, which bought over 45 titles comprising of Chinese drama series, and Malay films and drama series. PWS also increased its audience reach through the distribution of local content overseas including its animated series, Ejen Ali, which was sold to over 45 countries.
In addition to generating new revenue streams, the transformation plan led Media Prima to expand its digital reach through a strategic company acquisition. The year under review saw Media Prima rank third in Malaysia behind Google and Facebook in digital reach after the acquisition of Rev Asia Holdings Sdn Bhd, a Southeast Asian digital media company, by Media Prima Digital. Media Prima reached a monthly digital audience reach of 11.1 million in November last year.
The rapid increase in digital reach is also attributed to the implementation of a digital-first strategies across the group.
The strategy has benefitted The New Straits Times Press (Malaysia) Bhd (NSTP) as it aims to capitalise on the growing demand for digital news content.
NSTP’s online news portals are Malaysia’s industry leaders according to ComScore Inc’s data as at December 2017 with Harian Metro in pole position with 4.7 million monthly unique visitors and BH in second place with 3.9 million. New Straits Times’ website reached 1.3 million monthly unique visitors last year.
Group managing director Kamal Khalid (pic) said: “Our achievements to date underscore the progress of our transformation plan and fuels our confidence in Media Prima’s future. Last year, we continued to dominate the digital space with our award-winning content. We believe the group has established much-needed foundations to grow further.”
Revenue from Media Prima’s Out-of-Home advertising business increased by 6% against the corresponding year, contributed by higher yield from digitalised sites.
Nonetheless, the continued challenging operating environment faced by media companies in Malaysia has impacted the industry.
The drop in total advertising expenditure for the year resulted in lower revenues for Media Prima’s television, print and radio platforms.
Media Prima’s revenue for the financial year declined by 7% against the previous corresponding financial year, attributed to lower advertising and newspaper sales as consumers increasingly shift to digital media.
The group recorded a loss after tax (LAT) of RM669.7 million against a LAT of RM69.8 million in the corresponding year. This is mainly due to impairment charges and resizing of the group’s workforce (Exceptional Items) in line with the group’s direction and focus to become a digital-first content and commerce company. If these were excluded, the group would post a lower LAT of RM172.3 million.
The group’s net revenue for 4Q17 increased by 6% against the preceding quarter (3Q17) and incurred a LAT of RM384.7 million, mainly due to impairment charges recorded in the quarter. If exceptional items amounting to RM302.7 million were excluded, the group would post a LAT of RM82.0 million against RM52.9 million LAT in 3Q17.
Kamal said: “We accelerated our business transformation plan in 2017 with a view to become a media organisation better equipped to capitalise on opportunities and confront the challenges in the new era dominated by digital media. Our results show we have not managed to fully escape them but we are encouraged by the outcomes of our efforts. We are taking the opportunity to make the necessary changes and deal with legacy assets and practices so that we can live up to our vision of being a leading digital-first content and commerce company.
“We will continue to find new ways to leverage on the strengths of our traditional media brands to meet evolving consumer trends while capitalising on the demand for more digital products.”