business

WarnerMedia could turn to Media Prima to feature local content for HBO Max in Malaysia

KUALA LUMPUR: American global mass media and entertainment conglomerate WarnerMedia could turn to Media Prima Bhd (MPB) to feature local content in the soon-to-be-launched HBO Max in Malaysia.

CGS-CIMB Research said a potential content sale and co-production deal with WarnerMedia could bolster MPB's content creation segment's position as an earnings leader.

To note, MPB's content creation segment in the first quarter (Q1) FY21 net profit soared 327.4 per cent year-on-year (YoY) to RM6.5 million on the back of content sales to a mélange of subscription-based video-on-demand (SVOD) services.

The firm noted that the earnings were more than enough to offset the losses in the company's billboard advertising and news publishing segment.

WarnerMedia stated on 4 Jun 2021 on the appointment of managing director for HBO Max in Southeast Asia and India before clearly stating its intention to bring the HBO Max SVOD service to Southeast Asia, including Malaysia.

However, it committed no timeline for the launches and only said they would happen "soon".

CGS-CIMB Research further noted that WarnerMedia's Home Box Office Inc, through a partnership with Astro Malaysia Holdings Bhd

has already offered HBO GO to Malaysian viewers since May 2019.

"However, HBO GO is more or less a replica of the HBO linear channel, whose original programming appeals to a small subset of viewers who are more highbrow and in the older demographics, in our view," the research firm noted.

On the other hand, HBO Max houses titles from the enlarged WarnerMedia properties such as Warner Bros Pictures, New Line Cinema, the Cartoon Network, CNN, TNT, TBS, Turner Classic Movies, and DC Comics.

"WarnerMedia's quest for global streaming dominance is giving the local media companies the extra muscle to ward off the longstanding piracy threat.

"Further, WarnerMedia has content that appeals to Malaysia's cosmopolitan demographics, which are likely to have the most substantial purchasing power, in our view," the research firm said.

Reiterate overweight for the media sector, CGS-CIMB Research top picks are MOB and Astro, with recovery in traditional advertising expenditure (adex) as a re-rating catalyst.

However, downside risks are adex falling further, home-shopping businesses turning red again, and efforts to combat piracy petering out, the firm said.

Most Popular
Related Article
Says Stories