Pay TV slows, Internet grows at Naspers


Multinational media company Naspers released its interim results for the six months to 30 September on Tuesday. They show subsidiary MultiChoice has enjoyed far slower growth than in 2010 but the group’s Internet interests are expanding rapidly and accounting for much of its growth.

Consolidated revenues were up 17%. Though its largely offshore Internet businesses grew during the period, subscriber growth at MultiChoice, which owns DStv and M-Net, slowed after a flurry of activity in 2010 driven by the soccer World Cup.

The media group says its print media business has experienced strain on account of the economic downturn, but it managed to maintain market share.

Core headline earnings grew by only 8% during the period and the company attributes this to the new platforms and businesses it launched during the period and the expenses those incurred.

Consolidated revenues were R18,5bn, with most of the growth coming from the Internet businesses that saw revenues increase by 50%.

Despite a decline in new MultiChoice subscribers when compared to the previous period, revenue at the pay-TV business increased by 14% to R11,6bn and trading profits rose by 8% by R3,4bn. Print revenues, meanwhile, managed revenue growth of 5%.

Naspers says it is continuing to invest in MultiChoice and in upgrading its technology systems. In SA, specifically, MultiChoice added 209 000 subscribers, bringing the total to 3,7m households.

Of the new subscribers, 142 000 came from the lower-priced Compact bouquet. Without offering specific figures, Naspers says its recent roll-out of pay-per-view video-on-demand product BoxOffice proved popular.

In the rest of sub-Saharan Africa, MultiChoice’s subscriber base increased by 60 000 and now totals 1,5m homes. The lower-priced Compact and Family bouquets now account for 41% of the service’s subscriber base.

During the period, Naspers also launched digital terrestrial services under the brand name GOtv in Zambia, Uganda, Kenya and Nigeria.

Naspers expects overall revenue growth to continue to reflect the current trend when it releases its full-year results, but warns that the growth of profits is likely to be limited by ongoing reinvestment, something it hopes will drive long-term growth.

The group’s share price was trading down about 1,7% at lunchtime on Tuesday.  —