PROFILE: Media entrepreneur Andile Khumalo takes it to the next level
After a career as an accountant, business talk show host and media investment partner, Khumalo aims to shake up the media landscape
"I’m going to give them what they want, when they want it, at a price that is accessible, and on a platform they want."
That’s the promise of businessman Andile Khumalo as he articulates his vision for a new approach to media investment in SA in the face of digital disruption.
Khumalo, an accountant who has worked for Investec, Deloitte and the SA Institute of Chartered Accountants, is perhaps best known as a former host of Power 98.7’s Power Business talk show. He was also treasurer of the Black Business Council as well as a nonexecutive director of SAA from 2012 to 2014. In 2007 he joined MSG Afrika Group, headed by Given Mkhari, as an equity partner.
Khumalo has an energetic spirit and knows how to sell his book. He believes opportunities abound.
"I was chief investment officer of MSG, MD of Power FM, quasi chief financial officer of MSG Afrika, and had a radio show."
MSG is a diversified investment company with interests in Power 98.7 (Gauteng) and Capricorn FM (Limpopo), TV production, public relations and events businesses.
After helping to build its brand for 11 years, Khumalo left MSG last year. "I am no longer a shareholder."
Khumalo says his exit was amicable and he is still friends with Mkhari and the Power 98.7 team.
He emphasises that starting on a clean slate was the best way forward. "I have very big plans, that’s the real reason I left," he says.
One career normally provides all the fulfilment or stress a person can handle in one lifetime. Not so for this man, who, with a group of partners — whom he declines to name — has embarked on an ambitious drive to raise up to R1bn from institutional investors to invest in technology, media and telecommunications businesses, ushering in a third phase to his career.
The market is possibly anticipating his next move given past achievements and MSG’s track record in building viable media properties. Power 98.7, which launched in 2013, has grown to 124,000 listeners a week, compared to 702’s 524,000, according to Broadcast Research Council of SA data.
So what’s next? "My children think I’m unemployed. I turned 40 last year — it probably contributed to this decision. The last two years have been about reprioritising."
Khumalo is passionate about finding areas of growth potential.
Given dwindling profits in traditional media globally, some analysts are currently not in favour of media investments. Yet some of the most powerful companies of the past two decades — Amazon, Facebook, Tencent, Apple and Google — are digital media companies.
The proliferation of 4G and upcoming 5G technology in SA is encouraging, says Khumalo. "The currency of the future will be mobile internet access," he says, adding that the investment culture around media companies locally needs to change.
"Because of the ownership profile of the industry — the archaic thinking of its managers, their failure to respond to the digital economy and to package content in a way that satisfies audiences but also makes money for advertisers — I see an opportunity to approach investments in a new way."
He believes there is a need for more black media entrepreneurs, and that disruption will be created by people who understand ordinary South Africans.
Khumalo’s message to young entrepreneurs is to build good social capital.
He said late last year that he would let the market know in which businesses he plans to invest early in 2019.
He is more forthcoming about his philosophy: to invest in existing businesses which have the clientele, revenue and critical mass but are struggling to get to the next level of growth.
Khumalo is confident that the media industry is ripe for takeover because it fails to see that the middle class, which drives consumer spending, has changed.
"The people are different; the tools and platforms are changing at an ever faster rate, with data prices also on the decline. Strategy needs to change. We need new blood," he says, adding that the industry is obsessed with keeping the status quo.
"Why should someone wait until the top of the hour to get the news, for example?"
Khumalo says his experience has primed him for this moment. He certainly is confident.
"I want to build something that will outlive me."