HARD BARGAIN WITH MULTICHOICE PUSHES eMEDIA INTO THE RED

The television arm of Hosken Consolidated Investments, eMedia, was pushed into an interim loss as Naspers subsidiary MultiChoice halved the money it pays for eMedia channels to be included in DStv’s bouquet.

The JSE-listed holding company of TV channels eNCA and e.tv reported on Wednesday that it fell into a net loss of R729,000 for the six months to end-September. It made an after-tax profit of R131m in the matching period.

The group’s interim revenue declined by 5% to R1.2bn.

The licence fee eNCA receives from MultiChoice was almost halved to R140.8m from R266.6m. It managed to recoup a little of this by growing adverting revenue by 16%, to R52m from R45m.

“The decrease is attributable to the renegotiated DStv contract, which showed a significant decline in the licence fee revenue the group receives from MultiChoice for the supply of eNCA and five other channels,” eMedia CEO André van der Veen said in the results statement.

Buying the local rights to Days of Our Lives “and other premium content” from Sony Pictures increased the group’s content costs by 34% to R929m.

Its terrestrial TV station e.tv, which is not dependent on MultiChoice, managed to grow its advertising revenue by 4% to R689m.

The group said e.tv held its market share relatively constant, “but has seen a decline in the key revenue drivers of LSM 5 to 7”, referring to the livings standards measure used by the South African Advertising Research Foundation.

Programming and other costs at e.tv increased by 7% to R359m.

Source: Business Day – Robert Laing