Broadcasting group eMedia Holdings, which reported a drop in full-year earnings, will launch a video-on-demand service as it enters the competitive industry dominated by Netflix.

eMedia, worth R1.37bn, owns television and radio broadcasting businesses that include eNCA, OpenView and Yfm, together with production studios.

It said on Thursday it will launch an over-the-top service called “eVOD” in July 2021. eMedia did not give further details on the structure of the service, though it is likely to bring together the group’s various properties on one platform. 

SA has in recent years seen growth in the number of streaming services that have entered the market, including Netflix, Amazon Prime and Viu, which has differentiated itself through local content. MultiChoice has also been investing heavily in the space, and is home to three services: DStv, Showmax and Showmax Pro. 

In the free-to-air market, in which eMedia predominantly plays, its competitor SABC recently partnered with telecoms operator Telkom to stream its radio and television content online. 

With adoption still small in the local market, there is still room for all these players to capture market share. 

According to data from Digital TV Research, the penetration of streaming players such as Netflix is still a mere 4% in Africa against 82% in North America, 69% in Western Europe, 34% in Latin America and 37% in Asian emerging markets. In SA, Netflix was estimated to have about 350,000 customers in 2020, a fraction of DStv’s 8-million users. 

eMedia reported a 2.5% decrease in group revenue, from R2.491bn previously to R2.428bn in the year to end-March. The group ended the period with a net profit of R108m, inclusive of a R30.5m loss relating to discontinued operations.

“Tough trading conditions due to the pandemic continued for the free-to-air broadcasting industry with advertising revenue under increased pressure,” the group said. 

The group said its television advertising revenue is about 8% “better than the market”, attributing this to an increased market share in prime time from 24.6% in March 2020 to 29.6% in March 2021. 

“With the closure of certain noncore assets during the year, the group is now focused on its core businesses of broadcasting, content creation and being a platform and technology provider for broadcast services.”

“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,” said the group. 

Earnings before interest, taxation, depreciation and amortisation (ebitda) for the group were R302.9m compared with R427.7m in the prior year, a 29% fall year on year. Headline earnings per share were down 50.7% at 16.42c. 

A final dividend of 14c per share was declared, a 27% increase on in 2020's 11c. 



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