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PROFIT SPREE FOR E.TV

The profit signal keeps getting stronger at Cape Town-based free-to-air television station e-tv. In the year to end March 2007, e-tv reported an `outstanding’ year with revenues up 31 % and profits after tax up 95%.
The major shareholder in e-tv is empowerment group Hoskens Consolidated Investments (HCI) with the Rupert family controlled technology investor, Venfin, holding a significant minority stake.

HCI’s recently released results for the year ending March show its media and broadcasting division with turnover of R903 million and profits after tax of R347 million. The bulk of the turnover and earnings is derived from e-tv.

HCI chairman Marcel Golding says e-tv has “continued to slowly increase its viewership and has further benefited from the steady increase in the portion of adspend captured by TV from other media”, e-tv’s growth (remembering that about six years ago the station was still floundering in the red and not looking all that viable) has largely been driven by a marked increase in its black middle income viewership.

e-tv is also the most watched English medium channel in South Africa and has lately ranked as the second largest channel overall (with a market share of over 20% of the local adult audience).

Undoubtedly one of the major factors in e-tv’s success has been its programming, most notably its 7pm news as well as local dramas /soapies Backstage and Scandal.

Movies and wrestling have attracted the highest viewership ratings, but the profitability of these `imported` programmes could be tested by a weaker rand (which increases costs significantly).

While the core of e-tv’s operations are doing well, Golding admits that the television station’s efforts to extend its footprint in sub-Saharan Africa is slower than anticipated.

He says there is, however, progress in developing partnerships in several countries. “Several key programmes have been used to extend its reach and it is anticipated this process will continue to be developed in a manner that will provide growth opportunities for e- tv this coming fiscal year without exposing the company to undue risk.”

Another key development at e-tv is the recent application for a pay television licence.

At the moment it is unclear how many licences the governing body, ICASA, will issue later this year. But there is no doubt that e-tv – especially with the financial muscle of HCI and Venfin behind it – could find a significant niche in the pay- TV sector. Marcel Golding says there are more growth opportunities without exposing e-tv to undue risk.

Source: Cape Business News