eMEDIA TURNS TABLES ON SABC AND MULTICHOICE

HCI’s Copelyn says eMedia’s all-adult audience has just overtaken the combined share of the SABC channels, and also DStv, thanks to its Openview platform and popular e.tv soapies.

eMedia Investments — the free-to-air television broadcaster which owns e.tv, eNCA, OpenView and other assets — has had a blockbuster year, turning a R15m half-year loss into an after-tax profit of R134m.

This illustrates that there is still plenty of life in “old media” assets, despite the fear that Covid would led to many people abandoning these traditional sources.

But eMedia not only held its own, it snatched market share from the cash-strapped national broadcaster, the SABC. And, at the same time, its ambitious free satellite platform, Openview, neared a breakeven point as it threatened the dominance of MultiChoice at the top end.

The company — which is 67.7% controlled by Hosken Consolidated Investments (HCI) and Remgro, with a 32.3% stake — has enjoyed a blockbuster year despite Covid initially fuzzying up the picture.

Johnny Copelyn, CEO of HCI, says that while traditionally eMedia has had about half the audience of the SABC, this has changed considerably over the past few years.

Copelyn says that in April, for the first time, eMedia’s all-adult 24-hour audience share reached 32.44% — a nose ahead of the combined SABC channels (30.94%) and DStv (30.42%). “This is partly the consequence of our decision to invest in Openview … but equally … the result of more popular programming on e.tv.”

In particular, eMedia’s market share among SA’s wealthiest consumers, in the LSM 8-9 category, is now a good stretch ahead of the SABC’s 19%, though less than DStv’s 37.5%. “Likewise, our eExtra channel now attracts a prime-time audience about 20% bigger than that of SABC 3.”

Khalik Sherrif, CEO of eMedia, says the group continues to invest in the Openview platform, which is nearing a breakeven point.

eMedia, which was started in the mid-1990s, initially earned a steady keep from its traditional e.tv channel and its well-regarded news channel, eNCA. But branching into satellite television with Openview — a free platform offering a number of channels — not only incurred huge development costs but also brought the group into the glare of its larger JSE-listed counterpart MultiChoice (owner of DStv and SuperSport). Losses in the segment have mounted in recent years, but that heavy spend looks set to start paying off soon.

Openview earned advertising revenue of about R270m in the year to April — almost 40% up on the previous year. But it also had to pay higher content costs of R367m (previously R309m) with additional sports coverage on the news and sports channels as well as the addition of the Afrikaans block on the eExtra channel.

Sherrif says this investment in content increased the group’s 24-hour market share to nearly 30%, while Openview’s operating expenses fell 7%, mainly due to savings from the discontinuation of subsidising consumers buying Openview set-top boxes. “Despite this reduction in subsidy, Openview set-top box activations continue to grow at an average of 35,000 per month.”

At the end of March, close to 2.4-million Openview set-top boxes had been activated, well up on the 1.9-million at the end of March 2020.

Openview has now launched a data dongle, known as Openview Connect, which will allow people without fibre to access the internet.

This could be a boon, since less than 10% of SA households have fibre.

Speaking to the FM off the record, a former television broadcasting executive reckons the dongle could transform Openview’s business model. “If the Openview box becomes the hub in the home, it could access customer information … which gives better data for targeting advertising sales.” But he believes Openview should have done so earlier.

Copelyn says that while television advertising shrank by about 18% during the lockdown, eMedia’s ad revenue dropped by only 7%.

“Essentially the reason for this is that our market share has grown over the past few years and especially this last year. At our lowest point, in about 2015, we had shrunk to an audience share of about 13.5%. By year-end, we were at the highest we have ever been, with an ‘all adult’ market share of 29.6%.”

While there is no profit breakdown provided for each of eMedia’s platforms, it seems e.tv continues to churn reliable profits.

Sherrif points out e.tv’s share of prime-time viewing has increased to 20.3% from 17.4% a year ago, driven by its local dailies like Imbewu: The Seed, Scandal! and Rhythm City, as well as the launch of Durban Gen in October 2020. Sherrif says eMedia’s confidence in starting this new prime-time soapie has been rewarded with an increase in market share for the slot (and for the group as a whole). “This increase in market share will underwrite an increase in revenue.”

Sherrif adds that there has also been an improvement in the ratings of the other six channels produced by e.tv — with significant growth shown by eExtra, eMovies Extra and the news and sports channels. eMedia management will be looking to launch a “few more channels” on the Openview platform in the new financial year.

Source: Financial Mail – Marc Hasenfuss (from News & Fox)