Friday, 28 June 2019

e.tv's Openview Satellite-TV Platform Still Loss-Making But Adding 35 000 Set-Top Boxes Per Month; eNCA Still Most Watched TV News Channel; e.tv Prime Time Ratings Slightly Up, Movie Slots Reduced - eMedia Holdings 2018/2019 Financial Results.

According to eMedia Holdings' financial results for the year ending 31 March 2019
its Openview free-to-air satellite-TV service remains loss-making although it's now adding 35 000 set-top-box sales per month, its eNCA (DStv 403) remains the most watched TV news channel in South Africa, and e.tv's prime time audience share rose slightly thanks to local content as it reduced movie slots.

e.tv's Openview continues to be a loss-making operation although it is adding 35 000 activated set-top boxes (STBs) per month, according to eMedia Holdings that has released its financial results for the year ended 31 March 2019.

eMedia now has 1.57 million "activated" Openview decoders in South Africa and Southern Africa.

eMedia Holdings runs e.tv, the Openview
platform and the eNCA (DStv 403) TV news
channel on MultiChoice's DStv satellite pay-
TV service.

eMedia Holdings on Thursday reported a
R117.6 million profit for its year ending 31
March 2019, compared to a loss of R1.5
billion during the previous financial year.
eMedia Holdings has an interest of 67.69% in eMedia Investments.

Openview, inclusive of the e.tv multi-channel business, earned advertising revenue of R131.8 million during the past financial year with content costs of R255.7 million.

This content costs of R255.7 million was up from R173.6 million the previous year, with the increase that is attributed to the launch
of the new Open News TV news channel, as
well as the block of Afrikaans language
content on the eExtra channel, and the
launch of the eReality channel in November
2018.

According to eMedia Holdings, these content changes have increased the market share on other e.tv packaged channels from 2.6% in March 2018 to 4.6% in March 2019.

Operating costs, including retail subsidies of R55.3 million amounted to R185.4 million
compared to R193.6 million in the prior year.
The reduction is attributed to a reduction in
subsidies of set-top boxes from R150 to R75 per box in October 2018 as well as the exit from the SES contract.

eMedia Holdings says that despite the
reduction in subsidies of STBs, Openview set-top box activations continue to grow at an average of 35 000 per month.

At the end of the period, a total of 1 574 395
(compared to 1 149 217 in 2018) Openview
boxes have been activated and a total of
R55.3 million (2018: R74.5 million) has been
spent on retail subsidies.

During the financial year Openview also
launched the personal video recording (PVR) functionality for the Openview box although it didn't publicise it widely, and says that in the new financial year it will "launch of a few more technical initiatives".

Tough conditions for free-to-air broadcasting in South Africa eMedia Holdings says tough trading conditions continue for the free-to-air broadcasting industry in South Africa, with advertising revenue that remains under increased pressure.

Despite this, eMedia showed an increase of
4% in advertising revenue from R1.577 billion to R1.638.8 billion for the financial year.

The cost of sales - mainly e.tv content costs and employee costs at the eNCA channel - increased by 1% from R1.199 billion to R1.211 billion.

eNCA remains most watched TV news channel
While eNCA is only available to top-tiered DStv subscribers and with channels like SABC News (DStv 404) available to a wider
potential DStv audience, eNCA remains the
most-watched TV news channel in South
Africa, with 45% of the overall TV news
channel viewership market share.

"Despite eNCA only being on some of the
premium DStv bouquets while SABC News is
on all the bouquets and the DTT platform,
eNCA continues to be the most watched 24-
hour news channel in the country with 45% of the market share. While advertising revenue remains under pressure, costs are being well maintained in light of the reduced DStv contract that is in its second year," eMedia said.

e.tv prime time audience slight up
e.tv's prime time audience share rose slightly from 15% to 19.2% during the financial year which e.tv attributes to the telenovela Imbewu: The Seed and the "improved performances" of its two local weekday soaps Rhythm City and Scandal!.

e.tv reduced the number of movie slots after
a market analysis of what movies work for
the channel which eMedia Holdings says
helped to improve e.tv ratings, while e.tv
executives are working on ways of further
improving the e.tv schedule in the next
financial year.

eMedia Holdings says that South Africa's TV
market is facing several technology and
viewership challenges that means that the
group must constantly assess "its strategic
alternatives".

"Our investment in Openview provides the
group with strategic flexibility and is part of
our plan to address the challenges of the
impending digital migration transition. We
continue to engage government on its digital terrestrial television (DTT) and direct-to-home (DTH) plans."

"With the sale and our closure of certain non-core assets during the year, the group is focused on its core businesses of broadcasting, content creation and a
platform and technology provider."

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