Media Prima's buyout of REV Asia: A wake-up call to traditional players?

Media Prima Berhad, Malaysia’s largest integrated media group is acquiring 100% of REV Asia Holdings, one of Southeast Asia’s leading digital media groups. The acquisition, at a cost of RM105.0 million, will focus on expansion in digital content and digital media platforms.

The acquisition will see the Group’s digital platform audience reach up to 10.4 million and according to Media Prima, this will make the group the third largest digital media company in Malaysia after Google and Facebook with 15.7 million and 14.1 million respectively.

Currently, REV possesses a strong track record in social media and online marketing through an established portfolio of online consumer brands that cover a wide variety of segments including entertainment, lifestyle and social-millennial English, Malay and Chinese news. REV Asia Holdings has significant reach amongst consumers aged 18 – 35 years given its strong expertise in curating content for this lucrative market segment.

Mohamad Ariff Ibrahim, group chief financial officer of Media Prima said, the acquisition is timely, as the group has embarked aggressively on digital based initiatives to reduce dependency on traditional revenue base.

He added:

At Media Prima, we are big believers in digital content and its growth prospects for the future.

The strategic acquisition of REV Asia Holdings demonstrates the firm's commitment to capitalise on the growing demand for digital content amongst consumers, by expanding its reach and further enhancing the Group’s competencies in digital content marketing, digital content curation and digital native marketing ads, he explained.

The acquisition is expected to result in the growth of revenue contributions from Media Prima’s digital platform exponentially, Ibrahim added. All whilst expanding on its reach and platforms further.

REV Asia Holdings recorded revenue and profit after tax of RM23.5 million and RM4.2 million for the financial year ending 31 December 2016, representing a growth of 32% and 27% respectively compared to the previous financial year.

Rafiq Razali (pictured), chief executive officer of Media Prima Digital said “Media Prima is expected to derive potential synergistic benefits as the group can expand its media offerings to general consumers, media buyers, advertisers and premium publishers.”

He added the company specialises in native content-based advertising, which garners higher margins.

Its deep expertise in producing content for the age group is an additional value to Media Prima.

"This bodes well for the Group as we capitalise on the increasing importance of digital amongst advertisers," he said.  He also added, that the immediate impact of this acquisition will be a massive base to up-sell Media Prima’s digital products and services by having a wider digital audience base in Malaysia.

An added pressure on competitors?

Media Prima’s latest multi-million dollars acquisition of REV Asia, will "pressure other media groups in the country to re-strategise digitally" moving forward, said Serm Teck Choon, Malaysian Digital Association’s president and country head of CtrlShift Malaysia. These media groups Serm referred include Astro, Star Media Group and Media Chinese International Limited.

Serm said while Media Prima is strong in its traditional media such as TV and newspapers, reaching audience with older ages. The deal will give Media Prima an advantage in reaching out to younger audiences via REV Asia's products, giving the group the right mix of various audience segments.

“This acquisition will also enable Media Prima to have a digital portfolio with strong products in various languages. This is as opposed to other major media groups which are strong only in specific language markets, such as The Star in English and Sin Chew Daily in Chinese,” Serm added.

Meanwhile Kenneth Wong, GM of Cadreon in Malaysia said Malaysian readers are always on the lookout for local content on the internet.

"The combination of talented teams and digital assets from the Media Prima Digital acquisition of REV Asia brings new excitement to the Malaysian digital and media industry as both businesses are highly complementary," he added.

Media Prima had since 2016 launched several key initiatives to capitalise on the growing demand of digital services and online commerce amongst Malaysian consumers. The new initiatives undertaken by Media Prima, through the Group’s media platforms, include the launch of CJ Wow Shop (home shopping via television broadcast and online), Super Deals (combining potential of e-commerce and radio) and revamp of tonton (Malaysia’s leading Over the Top subscriber based video streaming portal).

The Group had launched other digital initiatives such as the interactive learning portal FullAMark as well as popular mobile applications capitalising on Media Prima’s Intellectual Properties (Ejen Ali and JRevolusi game series, Jalan-jalan Cari Makan) which in total have reached over 2 million downloads. The new initiatives have provided Media Prima with a new revenue stream (business to consumer) which is in line with the Group’s strategy to be less dependent on ADEX.