Shagadelica

Media Prima Bhd (the people who run TV3, 8TV & soon to be relaunched Channel 9) has bought Natseven TV Sdn Bhd (the owner of ntv7) for RM90mil.

With this acquisition Media Prima now controls all the private free-to-air TV stations in the country. These 3 TV stations collectively have a 48% share of TV viewership (this includes RTM & Astro channels) and a 83% share of advertising expenditure in the free to air TV ad market (i.e. these 3 channels + the 2 RTM channels)

So why would TV3/8TV pay RM90 mill to take over a small competitor that lost RM 21 mill for the 1st half of 2005? If you read till the 3rd last paragraph of the Star article it says

Apart from giving Media Prima a big share of viewers and advertising revenue, (the acquisition of) ntv7 can help Media Prima face the challenges of price discounting in TV advertisements. Discounts given for TV ads are about 50%

So there you have it!
Apparently NTV7 with a smaller share of viewers & probably desperate for cash, was offering deep discounts for TV ads & undercutting the established market rates. Which explains some of the cheapskate quality adverts we’ve been seeing on NTV7. By purchasing NTV7, Media Prima now has a monopoly on the private free to air TV channels in this country & like any monopolist, will probably fix higher prices for TV adverts.

Interestingly, the Star article was the only one to cite discounting of TV adverts as a reason for the acquisition, albeit couched in PR wank the end of the article. Neither Bernama, Business Times nor EdgeDaily saw it fit to report this as a reason for the purchase.

Late Press: Carboncopy hasblogged on this & states that Media Prima also controls NST Press & is an UMNO corporate vehicle.

This entry was posted on Friday, October 28th, 2005 at 9:30 am and is filed under Scam Watch, You think so?. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.