HOSKEN Consolidated Investments (HCI) won’t be rushing, into new media investments. However, the empowerment group looks determined to build a sizeable subscriber platform for e.tv.

While initially launched as free-to-air television broadcaster, e.tv recently branched into subscription television (partnering Naspers-controlled DStv) with the launch of e-News.

At an AGM last week, HCI chairman Marcel Golding – who has spearheaded the group’s media forays over the years – said DStv had given commitments to launchtwo further subscription pl.itforms were being launched into Africa. Thai forms part of a longer-term plan to roll out four channels on DSTV over the next seven years.

The two new channels are E-Africa – a syndicated and partnership TV channel into various African countries – and Africa News Service. Apparently, eight countries have taken the E-Africa channel, where successful syndicated programming will hopefully spur home-grown productions such as “soapics” in the various markets. It seems the Africa News Service hopes to capitalize on the fact that Africa lacks a regional voice.

The move isn’t entirely unexpected as e.tv clearly no longer wants to rely almost exclusively on advertising – even though the advertising model has ensured the free-to- air concept remains surprisingly profitable. Media/broadcasting generated around 20%of HCI’S R8bn turnover in the year to end-March 2009.

Despite the economic slowdown e.tv managed to increase its pre-tax profits to R466m (2008: R460m). According to HCI’s annual report, e.lv’s average 24-hour audience share grew to 22,7%, with a prime tune audience share of 21,9%.

While ctv is a strong cash generator (especially when a strong rand keeps a lid on “imported” programming costs) Finweek wonders how much needs to be spent on developing the subscriptionside of the business.

With major shareholder HCI (see accompanying report) keen to curtail debt levels, would any thought be given to floating e.tv on the JSE? Such an exercise could see substantial funds raised in the pre-listing phase. But would MCI and Kemgro/VenFin (e.tv’s other major shareholder) want to dilute their respective holdings at possibly the most exciting phase of this little media gem’s development?

Source: Finweek – Marc Hasenfuss