TV ad revenue drops by 18% for Astro, subscription declines by 9%

Astro's ad revenue dipped to RM172.3 million from RM196 million during the fourth quarter of the financial year ended 31 January (Q4 2020). Overall, its revenue for the quarter was RM1,225.6 million, according to the financial statement. 

The financial statement said that in Q4 advertising revenue for TV in particular, dipped 18% from RM116.6 million to RM95.3 million. Revenue for its TV segment in dropped by RM141.3 million (11.9%) to RM1,048.1 million compared to the same period last year. The dip in advertising revenue, along with subscription revenue (-9%), production revenue, and sales of programming rights led to the decrease. TV earnings before interest, taxes, depreciation, and amortisation (EBITDA) decreased by RM17.5 million (4.9%) against the corresponding quarter. This was a result of lower revenue, increase in licence, copyright and royalty fees and marketing and distribution expenses, mitigated by lower content costs and staff related costs arising from separation scheme payments in the corresponding quarter.

Meanwhile on the radio front, revenue for the segment in Q4 2020 dipped 3.4% to RM77 million due to "the unfavorable operating environment leading to lower advertising spend", financial statement said. That said, the lower operating cost positively impacted EBITDA, with an 11.7% increase compared to RM43.6 million during the same period last year. Despite the drop in revenue and adex, Astro said its radex share has increased over the past four quarters to 80% for FY 2020. Its SYOK app, which aggregates Astro's radio brands, podcasts and original videos, has over 273k monthly active users. Meanwhile, its share of TV adex stood at 43%, while the share of digital adex stood at 4% with 11.6 million digital monthly unique visitors., the company said in its financial statement.

For FY 20, Astro's normalised profit after tax and minority interests (PATAMI) increased 17% year-on-year (YOY) to RM657 million, underpinned by cost optimisation. Overall, YOY revenue dropped 10% to RM4.9 billion while its EBITDA jumped 7% YOY to RM1.7 billion. According to Astro, its consumers are watching over four hours of Astro daily across TV, on demand and Astro GO. Its HD offering grew to 101 channels, contributing to a TV viewership share of 76%. The on demand titles watched on Astro also jumped 37% YOY to 74 million, while weekly time spent grew by 8% to 480 minutes. Meanwhile, registered users for Astro GO rose 20% to 2.6 million and weekly viewing time jumped by 16% to 173 minutes.

The company is leveraging on its free-to-view satellite TV services Astro NJOI to further increase its presence in households. According to Astro, it currently reaches 75% of Malaysian TV households. Separately, its home shopping experience Go Shop also registered a 25% growth in customers to 2.2 million with more than 1 million app downloads. It posted a 2% revenue increase to RM100.4 million.

Group CEO Henry Tan (pictured) said while it continues to broadcast as usual during the Movement Control Order, it has also activated its business continuity plans and ensured the safety of its employees. "Astro remains focused on strengthening its customer value proposition and loyalty, while pursuing deeper cost optimisation and stronger anti-piracy push," he said.  At the same time, it will also leverage on its customer base to build new revenue adjacencies in commerce, broadband, digital and OTT. Tan added that the teams are currently split across different sites with significant majority working from home. "We at Astro are doing our part to keep Malaysians informed and entertained through these trying times," he said.

Meanwhile, chairman of Astro Zaki Azmi said despite headwinds in the global economic environment and a challenging media landscape in FY 20, Astro continues to be cash generative, cost disciplined and proactive in its capital management.

Astro recently offered complimentary viewing of all movie channels on Astro and Astro GO during the MCO period. The channels include HBO, FOX Movies, Celestial Movies, tvN Movies, and BollyOne. Separately, it also brought on board former Initiative Malaysia MD Kristine Ong as VP of Astro Media Solutions last month.