2007 saw Malaysia’s media industry continue its ascendancy with major players recording healthy growth and profits with new business developments announced through the year, as the nation celebrated its 50th year of independence and nationhood. Advertising expenditure across all media in 2007 recorded a strong 15% growth as the market gathered momentum in the second half of the year to hit a total of RM5.5billion (US$1.7billion), according to The Nielsen Company. “Major events like the nation’s 50th anniversary, as well as travel and tourism advertising campaigns helped to drive ad spend growth in the second half of 2007,” analyzed Andrea Douglas, executive director, media service, The Nielsen Company, Malaysia. The overall hike in ad spend was seen across almost all media as TV enjoyed a 22% surge in ad revenue to win 33%, or RM1.8billion (US$566million), of the 2007 advertising revenue pie, the second largest share behind newspapers; propelled by growth in spending by advertisers from tonic and vitamins companies, local government institutions, mobile line services and automotive industries. Newspapers took 56%, the largest share of the ad revenue pie on the back of a 12% increase in ad spend, while cinema (34%), radio (18%), and point-of-sale (18%) advertising revenue all registered double-digit growth. “The local advertising industry managed to achieve an improved performance in 2007, as a result of favourable economic growth and major events which took place last year, however, we anticipate that advertisers will be exercising greater caution in 2008 due to uncertainty in the US economy and rising oil prices,” added Douglas. On the programming front, Media Prima’s TV3 dominated viewing for the year, taking all ten spots of the top-ten rated programmes of 2007. According to ratings data provided by AGB Nielsen Media Research Malaysia, Bahasa Malaysia-language music and entertainment shows accounted for half of the top-ten rated shows, including the top four spots. Annual music and entertainment awards show Anugerah Bintang Popular Berita Harian, where the nation’s most popular stars are honoured by local newspaper Berita Harian, was the top rated show of the year with 39.2% rating, followed by Anugerah Juara Lagu, a music competition organized by TV3 to showcase musical and lyrical compositions, and Anugerah Skrin, an awards show for TV and film actors. Posting record profits that exceeded the RM100million (US$30.9million) mark for the first time at RM117.4million (US$36.3million) in 2007, up 46% from RM80.3million (US$22.8million) in 2006, was Malaysia’s largest integrated media investment group Media Prima Berhad (MPB), owner of dominant network TV3, ntv7 for urban and English-speaking viewers, 8TV for urban youth and Chinese audiences, and TV9 for young semi-urban and rural Malays associating with traditional values. 2007 saw MPB’s net revenue surge 29% to RM691.5million (US$213.8million), attributed to increased advertising revenue from the 50th Merdeka (independence) Celebrations in Q3, 2007, and strong advertising expenditure across all categories in Q4. Revenue from MPB’s TV networks business grew more than 14% and ahead of the market despite the lethargic TV advertising market in the first half of 2007. MPB’s TV networks also dominated viewing with a combined household audience share (Viewers All 6+) of 53% according to Nielsen. In addition, TV9 which was launched May 2006, broke even in 16 months of operations, and posted its maiden profit in 2007. According to AC Nielsen Media Research, TV9’s channel share increased by 11% in 2007 from 5% it first recorded after eight months of operation, making it the fastest growing channel and second most watched channel in Malaysia. March 2008 also marked a significant regional expansion move by MPB with its establishment of the MPB Strategic Media Fund Limited Partnership, a private equity fund for investments in media assets across South East Asian and emerging regional markets. Targeting high growth media assets within ASEAN, the Media Fund is expected to grow and diversify the group’s earnings, as well as enhance shareholding value. MPB is the anchor investor working with other domestic and international financial and strategic investors. The initiative will raise and invest between US$100-150million in 5-7 years, with the MPB Fund Management Company set up to handle the financial and media assets, and Macquarie Capital Securities (Malaysia) appointed as lead financial advisor. “We are aware that regional expansion and investment in media assets overseas will require substantial investment, and comes with a certain amount of risk. Further, such media investments are likely to require a gestation period before becoming profitable in the medium to long term. Accordingly, our investment through the Media Fund will enable MPB to minimize this impact to its earnings and balance sheet, share our risks with like-minded investors while at the same time allows MPB to benefit from management fee in operating the media assets and participate in the future capital gains of the Media Fund,” explained Abdul Rahman Ahmad, group managing director/CEO, MPB. The Media Fund’s first investment is in the Philippines where MPB subsidiary, MPB Primedia Inc, sealed a block airtime and consultancy agreement with Filipino free-to-air TV network ABC5. Primedia is providing content and managing airtime sales for ABC5, which is undergoing a repositioning and launch exercise as well as transmission upgrade. MPB’s interests in Primedia, which is being managed by a Filipino team led by a local CEO, will be transferred to the Media Fund upon its inception. The new initiative also saw a reshuffle in MPB’s senior management as YBhg Dato’ Sri Farid Ridzuan was appointed as CEO of the MPB Fund Management Company as well as CEO of Media Prima’s International Division, and remains as group CEO, MPB TV networks, responsible for all four of MPB’s TV channels. Dato’ Amrin Awaluddin, CEO of ntv7 was named CEO of TV3, and Dato’ Anthony Firdauz Bujang, director of operations at TV3, takes over as CEO of ntv7. Speaking on the progress of the Media Fund’s establishment, Abdul Rahman Ahmad revealed, “Our activities at this point revolve largely around discussions with financial and strategic investors. Feedback has thus far been positive and we anticipate the listing of five to seven investors for this private equity fund which will be invested into media assets within the region. As previously stated, the investment horizon we are looking at is between five to seven years. We expect to close the fund by Q3, 2008.” The country’s pubcaster Radio Televisyen Malaysia (RTM), operator of terrestrial TV networks RTM1 and RTM2 also enjoyed a relatively positive year as ratings and revenues rose following a rejig of its programme belting, along with acquisition of new programmes, and advertising campaigns to inform of improvements, undertaken by RTM’s marketing arm Utusan Airtime. The two RTM stations saw channel share increase from 23% in June 2007 to 26% in January 2008, following a switch in RTM2’s English language news slot to 12 midnight from 10.30pm as audiences rose from 100,000 to 600,000. The 10pm slot was replaced with movies including the Harry Potter franchise which attracted some 1.6million viewers, up from an average of 690,000 viewers previously. The Sunday 10.30pm slot for Malay movies on RTM2 was also brought to 9pm on Monday which saw audiences jump from 781,000 to 2.3million. RTM’s gain in ratings was also matched by an 80% hike in revenue in the second half of 2007 over earnings in the first six months. On the pubcaster’s outlook for 2008, Adi Satria, managing director of Utusan Airtime lauded, “It can only get better with the improvements that we have made.” In pay-TV, satellite pay-TV operator Astro had a year of mixed fortunes as it posted a record increase in subscriptions although growth was underpinned by continuing investment in content. The company also suffered the loss of Robert Odendaal, CEO, Astro who stepped down April 2008 for personal and lifestyle reasons, and William Pfeiffer, CEO, Celestial Pictures who left the Astro subsidiary in March 2008 to pursue ‘new business ventures’. Replacements for both executives have yet to be announced at the time of print, with CEO duties at Astro covered by executive deputy chairman Ralph Marshall. Astro enjoyed strong net subscriber growth totaling 256,000 which brought its residential subscriber base to 2.27million or 40% of Malaysian homes as of January 31, 2008. Group revenues grew 17% to RM2.60billion, as EBITDA grew 5% to RM557million for 2007 attributed to investments in development of new channels and an increase in content costs globally. Regionally, Astro acquired a 20% stake in India’s Sun Direct TV which soft launched its DTH service in December 2007 and drew 350,000 subscribers as of March 2008. Riding on additional capacity available from the launch of the MEASAT-3 satellite by sister company MEASAT Satellite Systems in December 2006, Astro launched nine channels including Tamil music channel Sun Music, inhouse packaged Tamil movie channel Astro Vellithirai, Chinese entertainment channel Jia Yu, female-focused Discovery Home & Health, male-oriented Discovery Real Time, factual entertainment channel Discovery Science, Hollywood entertainment channel E!, and sports channels Golf Channel and Eurosport in May 2007. Further, Astro added news and information channel Al Jazeera English and KBS’ international channel KBS World in September and October 2007, as well as ABC’s international service Australia Network in April 2008. Astro’s chairman Dato Haji Badri Haji Masri said, “The Board is pleased with the overall performance of the Group. The targeted sales and marketing efforts, as well as our content development initiatives, have resulted in record sales for the TV group in particular. The additional satellite transponder capacity has enabled us to substantially expand our service offerings to cater to new customer segments.” April 2008 however, saw the pay-TV operator reach a standstill in its expansion plans as industry regulator Malaysian Communication and Multimedia Commission (MCMC) imposed a ban against its adding of more channels following various complaints including disrupted services during bad weather, billing disputes, as well as lack of choice in packages offered, and content in specific programmes. Speaking to the local media, communications minister Shaziman Abu Mansor stated, “We have decided not to allow Astro to add more channels until MCMC is satisfied that they have improved their services.” In terms of local content and creative services, government agencies Multimedia Development Corporation (MDeC), National Film Development Corporation Malaysia (FINAS) and Malaysia External Trade Development Corporation (MATRADE) led delegations of local firms to worldwide content markets where they facilitated business meetings and closure of content and co-production deals internationally. Deals totaling some US$13.5million were signed at the recently concluded Hong Kong FILMART 2007 by Malaysian companies with partners in Italy, China and Hong Kong, along with a memorandum of understanding signed between MDeC and Lazio’s Finanziaria laziale di sviluppo (FILAS) to promote bilateral development of creative industries in both territories. MIPTV in April 2007 saw Malaysian firms secure deals worth over US$62million with Australian, Chinese, Singaporean, Latvian, English, French, Greek, Canadian, Spanish, Swedish and German counterparts. Significantly, MDeC pioneered in August 2007 its inhouse content showcase in the inaugural Buyers Fly-in Program as 20 potential content buyers and co-producers from the US, Hong Kong, Thailand, Singapore, Korea, Hungary, Ireland and Belgium were flown into Kuala Lumpur to meet local content creators and distributors for a three-day business networking event which saw the closure of US$110million worth of deals, many of which were initiated at content markets earlier in the year including MIPTV and Hong Kong FILMART. TVAplus