Nation Media Group Blames Digital Migration for 8% Decline in Profit

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The Nation Media Group announced its half year results this afternoon. Half year profit before tax went down to Sh1.43 billion compared to Sh1.56 billion posted in 2014. NMG attributed the 8% decline in profitability to a 30% loss in advertising revenue as a result of Digital migration. The TV operations declared a 100% decline in operating profits over the same period owing to the same. NMG’s chief executive officer said that advertisers pulled out during the switch off period affecting the company’s revenue streams.

Earlier in the year, the three largest media houses in Kenya, Nation Media Group, Royal Media Services and Standard Group Limited went off air protesting  the planned digital migration and asking for more time. The government launched the digital broadcasting service in Kenya in 2009 following an ITU Member States at the Regional Radio communication Conference held in 2006, known as the GE06 Regional Agreement. During the conference member states set a deadline for 17th June,2015 where all analogue TV signals were expected to be switched off world wide.

During its  annual General meeting, which took place on June 5th, the management announced start of sale of digital set-top boxes in three weeks but not much has been seen from this front since.  The decoders were set to retail at a price of  Kshs. 3,500 with no monthly subscription fee. During the meeting, the Company’s chairman noted that there were 4.5 million TV sets in Kenya, with an estimated 2.2 to 2.3 million set-top boxes in the country. Meaning an estimated 2 Million households still need set top boxes which, is the number they sought with their non-show decoder.  In announcement of the half year results, Uganda was one of the best performers with its advertising revenues at 16%.

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