Rev Asia believes consolidation is key to media play
By Goh Thean Eu January 12, 2017
- With more people starting to spend more time on the online media platforms, it is time for publishers to start consolidating
- Most of its investments this year will be focused on growing the Malaysian market
REV Asia Holdings Sdn Bhd - a company which was born from the merger of selected assets of Catcha Media Bhd (now Rev Asia Bhd) with Youth Asia Sdn Bhd - believes the online media players will need to consolidate to be more competitive.
Over the past two years, Rev Asia Bhd via its 70%-owned subsidiaries, namely Rev Asia Holdings and its subsidiaries, has been on a relatively aggressive shopping spree. It acquired OHBULAN!, Rojaklah and Viralcham.
Few weeks ago, it announced that it has acquired Kongsiresepi.com, Siraplimau.com and Myresipi.com -- giving it a much needed boost in the Malay-language online media space.
For Rev Asia Holdings Managing Director Voon Tze Khay (pic above), the aggressive move over the past few years is to widen its distribution channel to better serve its advertisers and customers.
For Voon, these acquisitions also matter because it will help to put Rev Asia in better position when comes to competing for a share of brands and companies' online advertising budgets.
"Today, it is tough to achieve scale for standalone publishers that operate independently.
"With more people starting to spend more time on the online media platforms, it is time for publishers to start consolidating," said Voon in an interview with Digital News Asia in Petaling Jaya recently.
Continue to be on the lookout
Today, Rev Asia has online media that covers three of the country's main languages. However, Voon said that the company is always on the look for opportunities.
"If the opportunities arise, we will definitely look into it," said Voon.
"For now, we are seeing a lot of growth potential in the Malay-language online media. So, if there is an opportunity in this area, we will explore it," he said.
Reflection of 2014-2016
The past two years have been pretty eventful for Rev Asia. In late 2014, it went through a painful restructuring exercise (late 2014) which resulted in the discontinuation of various print publishing titles like Stuff, Prestige, Mint and Clive and significant reduction in staff strength.
During the period, it started the three-year strategic road map -- which saw the company's growing appetite in acquiring several online media.
It also started to expand its business to Indonesia and the Philippines. However, its overseas expansion plan didn't go as strong as expected last year.
"We faced some operational challenges in our overseas expansion plan. We are currently considering growing the overseas business with the help of local partners," said Voon.
Nevertheless, the company - despite the ups and downs it faced over the recent years - remained confident that it has what it takes to continue its growth momentum.
"With the strategy in place, I am confident that we will be able to grow strongly this year," said Voon.
Based on the company's recently announced third quarter results, it appears that the company's strategy is yielding results.
At the group level, Rev Asia Berhad's net profit more than doubled to RM10.12 million for the nine months ended September 30, 2016, versus RM4.06 million same period a year ago. Revenue increased by 20% at RM15.53 million.
Of course, one may argue that Rev Asia Group's online media businesses may not be doing as strong as the headline numbers -- after all, the group numbers are comprised of the fair value adjustments (gains) from its then associate iCar Asia Ltd. (which Rev Asia Bhd currently has about 17% stake in it).
To recap: Rev Asia ceased to be an associate of iCar Asia after September 2, 2016, when its stake has been diluted to under 20%.
A look at the company's digital/online-related business showed that the company has been growing at a healthy pace.
The company's online media business, which mainly comprised of the income it makes from its various online media assets like OHBULAN!, Rojaklah, Viralcham and others, recorded a threefold jump in revenue at RM4.31 million. Pretax profits jumped by about 50-fold to RM1.94 million (from RM42,000 a year ago).
Its social media business - mainly comprising SAYS and 8share business - recorded a pretax profit of RM1.5 million, about 44% lower than a year ago. The lower profits are mainly driven by the investment on its overseas expansion plan.
This year, Voon said that most of its investment - may it be in the form of time and human resources - will be focused on growing the Malaysian market.
It also had four key strategies in place.
First, is the video strategy. Voon revealed that the company has started to allocate more resources into buildings its video team.
In 2016, the Rev Asia network recorded a total of approximately 130 million video views across all of its brand assets.
"Over the past seven months, we have seen a big growth in terms of video consumption on Facebook. That's why we see the need to beef up our team," he said.
At press time, the company's video team is about 5-men strong.
"Our aim is to grow it to about 10 within the next several months," said Voon.
Its second strategy involves offering more content and services to the small and medium enterprises.
"Today, 80% of our customers from our Chinese segment media is generated from SMEs," said Voon.
"As you know, REV Asia's business model is centered around sponsored content, and we work closely with the SMEs to produce these contents. In Malaysia, there are over 700,000 SMEs. This offers us a huge opportunity to tap into the segment and provide the SMEs with a platform to promote their products and services on our network."
The third strategy involves the company's commitment in growing its mobile business.
"Today, we are also seeing increasing consumption of our content through mobile. However, we don't really monetise on it. In the past, we have put lesser focus in the opportunities and on monitoring our inventory through mobile," said Voon.
To grow its mobile advertising revenue, the company will be setting up a special projects team that will look at ways to optimise its mobile inventory.
Fourth, is to be more active in organising events. Over the recent years, the company has organised several major events, such as the Juice's 14th Anniversary Party with Heineken, the Best of the Years on Movies with Says.com, amongst others.
The company believes that its clients will be able to extract more value and get better engagement with its audience and target market, when the campaign has both online and offline elements.