Media Prima’s YouTube tie-up may replace tonton

KUALA LUMPUR: Media Prima Bhd has announced that a partnership with tech giant Google, which owns YouTube, could replace tonton as a more efficient content delivery method in the future, according to the group’s managing director Datuk Kamal Khalid.

“That is a possibility,” he said when asked if YouTube could be a more efficient delivery channel replacing its tonton video streaming service.

“One of the things which we, at the moment, are looking at is the number of hours viewed in terms of subscription, and we have seen a bit of an uptick for tonton over the last three months or so. There is still value in that method of delivery, but whether or not it is something which [we want to keep based on the overall landscape] is something that we want to review from time to time,” Kamal said in a question and answer session following the launch of its video content on YouTube via its “Player for Publishers” service yesterday.

Nonetheless, at this point in time, he noted that tonton is targeting a different audience.

“For some of the exclusive content, it will still sit on tonton. But you raised a good point. I think eventually we probably have to decide what is the most efficient model in terms of getting content out to the public,” he said, adding that the partnership with YouTube is a good first step in the digital push to reach a wider audience.

Recall that tonton, an over-the-top streaming service that was first introduced in 2010, has since included a subscription income model for its relaunched video-on-demand service. Based on its latest annual report for the financial year ended Dec 31, 2017, tonton had over 7.6 million registered users and continued to grow by 15,000 users weekly.

An analyst, who agreed to only comment on the condition of anonymity, said that it is likely that tonton would be replaced, given that the cost savings from shifting content to YouTube would be huge, and the cash burn rate of tonton is about RM30 million per annum.

With the collaboration, all Media Prima’s video content would be available on YouTube, enabling it to reduce costs by embedding YouTube’s video player across its platforms while giving audience a better viewing experience across multiple devices.

Kamal noted that this move would allow Media Prima to generate sustainable revenue through programmatic advertising, one of the fastest-growing digital revenue segments.

“The simplest way to do it is that the more people watch your content, the more opportunities we get to sell our inventories to advertisers. There is a commercial arrangement where we share the revenue derived from advertising sales,” he explained.

Media Prima has seen its digital revenue grow at a double-digit rate over the last couple of years, and the latest collaboration could continue to drive growth moving forward. Aside from growing its revenue, Kamal also believes that Media Prima could leverage on Google’s strong analytics strength to improve the quality of its content.

On this note, Google Malaysia, Vietnam, Philippines and new emerging markets managing director Sajith Sivanandan agreed, saying that more than 50% of rural Malaysians would turn on YouTube every single day, and with the relevance of local content by Media Prima, the collaboration could help to supercharge the Malaysian YouTube scene.

Media Prima is the first media group in Malaysia to use YouTube’s Player for Publishers service, which was launched in 2015 in Europe and is now used by more than 100 publishers in 25 countries.

At closing yesterday, Media Prima’s share price gained 2.75% or 1.5 sen to 56 sen, with about 1.2 million shares traded, giving it a market capitalisation of RM621.2 million. Compared to a year ago, its share price has fallen by 30.43% but has seen a recovery since bottoming at 28 sen on May 15 — its lowest level since 2003.