Malaysia’s Media Prima is launching a home shopping business, a move that could open up a promising new revenue stream for the broadcaster and publisher, which relies on advertising for around 85% of its revenue.
The media conglomerate, which operates a mix of broadcast, print, outdoor and digital assets, announced Monday it was investing up to RM33.2 million (US$7.6 million) for a 51% stake in an as-yet unnamed JV with Korean specialist, CJ O Shopping.
In turn, CJ O Shopping will put up to RM31.8 million (US$7.3 million) into the venture.
Malaysia’s ad market is soft, facing less than 3% ad spend growth this year, according to Media Partners Asia, after two consecutive years of decline.
At the same time, Malaysian advertisers are spending more on pay-TV and digital alternatives, creating a challenging climate for Media Prima.
Media Prima already airs a self-produced infomercial series called Jom Singgah (pictured) in an afternoon slot on TV3, Malaysia’s most popular TV channel.
Its upcoming home shopping business, expected to launch sometime in Q2, may add some additional pep if Media Prima can leverage its presence in the Malay heartlands to compete with Go Shop, the market incumbent.
An established rival
Go Shop, which first went on air 12 months ago, is a 60:40 JV between pay-TV leader Astro, Malaysia’s biggest media company, and GS Home Shopping, a Korean rival to CJ O Shopping.
In October, Go Shop added a Mandarin-language offering to existing Malay channels on Astro’s pay and free satellite platforms. Services in English are also available online.
Go Shop is expected to break even on ~RM200 million revenue this financial year (ending Jan 2016), and is targeting more than RM300 million in its FY2017.
For CJ O Shopping meanwhile, entry into Malaysia represents the Korean company’s ninth international market.
CJ O Shopping is also present in: China (with multiple partners, including SMG and Southern Media); India (with Providence); Japan (majority owner); Mexico (with Televisa); the Philippines (with ABS-CBN); Thailand (with GMM Grammy); Turkey (with MediaSa); and Vietnam (with SCTV).
Most of these operations have yet to show a significant profit, with many still in the red. The oldest however, a JV for Shanghai and neigboring regions set up with SMG in 2004, is a notable exception.