Vision Group’s half-year profits for the period ending December 2019 grew by 45% from UGX1.1 billion in the 6 months to December in 2018 to UGX1.6 billion- results released by the multimedia group show.
This was on account of what the group says was an 11.28% increase in overall advertising revenue- itself driven by major growth in key advertising streams, namely print (13.81%), radio (9.14%) and Television (8.02%). Digital advertising however declined by 15.02%.
The group though noted that there was depressed growth in revenue from events (-38.87%), circulation (-8.27%) and commercial printing (-1.5%). -subsequently neutralising the impact of the double-digit advertising growth on overall turnover.
Turnover grew by 3.26% from UGX45.1 billion in the same period last year to UGX46.6 billion.
Should Vision Group maintain this growth in profits period January-June 2020, the group could easily almost double the UGX2.1 net profit declared in 2018.
Although the group didn’t say why there had been a decline in especially newspaper circulation revenue, according to the Audit Bureau of Circulation of South Africa, during the 6 months to December 2019, there was a 5.1% decline in New Vision’s copy sales from 24,895 copies in July-September 2019 to 23,636 copies in October 2019. New Vision is Vision Group’s flag product.
Sunday Vision sales also fell by 3.4% from 14,596 to 14,096 copies in the same period. Bukedde too, fell by 11.1%, losing 4,100 copies, from 37,466 to 33,289 in the same period.
The decline in circulation (copy sales), which formed an average 23% of Vision Group’s revenues in 2018, continue to be a significant inhibitor in the group’s performance, both directly but also indirectly as circulation figures are a major determinant of advertising revenue.
Newspapers, still remain Vision Group’s cash cow, accounting for 56% of group revenue (UGX50.6 billion out of a total UGX90.2 billion) in 2018, followed by broadcast media (radio and TVs) that accounts for 26.9 billion or UGX29.8 bn.
But it is not Vision Group’s newspapers alone that are falling. Elsewhere, the entire newspaper industry in Uganda; the region and the world over is suffering from low copy sales as readers steadily migrate to digital platforms as a source of fresh news.
In the last one year alone the combined sales of the three leading dailies- New Vision, Bukedde and Daily Monitor have fallen by -6.4% from 78,114 copies in October-December 2018 to 73,094 copies- on average. While New Vision declined by 6.4%, Daily Monitor declined by -4.6% from 16,301 copies to 16,169 copies.
Netflix Strikes $82.7 Billion Deal to Take Over Warner Bros., Redefining the Global Entertainment LandscapeWeekend (Sunday Vision and Sunday Monitor) sales have registered an even steeper fall falling by 11.2% from 26, 560 copies to 23,576 copies.
Sunday Monitor lost 11.3% of its circulation- 10,689 copies to 9,480 and for the first time in over 10 years, Sunday Monitor became the first mainstream newspaper to sell below 10,000 copies. Sunday Vision also lost 11.2% of its Sunday sales- from 15,871 copies in Q4 2018 to 14,096 copies in Q4 2019.
Even regional big newspapers such as Kenya’s Daily Nation and South Africa’s Daily Sun have all been affected. For example, Daily Nation which at its peak used to sell over 150,000 copies a day, in Q4 2019 only sold 101,154 copies- which was 3.7% less than the 119,772 copies in the same period in 2018. Daily Sun on the other hand, at one time, peaked at over 500,000 copies a day, but in Q4, 2019, this had been reduced to 99,485 copies- 16.9% less than what it sold in the same period in 2018.
Radio, newspaper and television advertising spend at its lowest in 9 years
Vision Group’s ability to increase advertising revenue across radio, print and television stands out, given that according to media research firm, Ipsos’ industry reports, advertising spend on radio, print, and television which had for the last 8 years been growing by an average 9%- from UGX364.5 billion in 2010, reaching a climax of UGX723.5 billion in 2017, has since fallen by 29% to UGX515.7 billion. This is an average annual fall of 11% in the last 3 years). UGX515.7 billion is the lowest industry reported figures since 2012.
Analysts attribute this to the rise of digital- that now accounts for between 15%- 30% of advertising budgets of most private sector advertisers. Print has been the most hurt- 10 years ago up to 24% of all advertising budgets used to go to print; 60% for Radio and 16% for Television, but in 2019, print was only reduced to 10% according to Ipsos’ National Audience Measurement Survey (2019).
The share of advertising spend on television has since increased from 16% in 2011 to 34% in 2019 while radio has reduced from 60% to 56% in the same period.
According to Paul Bwengye Barya a Media Investment Consultant with Abbavater Group, a Media Investment agency, Vision Group’s continued growth in advertising revenue across traditional platforms, despite an upsurge in digital spend, could be explained by the fact that as competition gets tighter in the media space- top media houses have coalesced themselves into conglomerates with irresistible offers across their multiple platforms, to the disadvantage of single platform media houses.
“There are three major conglomerates, namely: Vision Group, Monitor Publication, and Next Media Services- who now prefer to package and position themselves as multi-platform media solutions providers, which of course creates better value propositions for most media buyers,” he told this reporter, in an interview.
Nonetheless, the conglomerates too are under pressure. Last week, we reported that NTV Uganda, the largest television house in Uganda, in the year ended December 2018 bagged UGX18.9 billion in gross revenue and made a net profit of UGX600 million. NBS Television, its archrival, for the year ended June 2019, made gross earnings of UGX15.5 billion, but unlike NTV, registered a UGX100 million loss.
