Mediaworks focuses on integrated offering as radio dominates sales

MediaWorks Investments, pitching its ability to offer advertisers access to a stable of television and radio stations, is to build an integrated inventory management system to make it easier for customers.

The company has been sending a single sales representative to clients rather than its previous individual approaches for TV, radio, and digital, something acting chief executive David Chalmers says has been well-received. The media group will take that further with capital expenditure planned for 2016 to build an integrated inventory management system, which Chalmers says will make it easier to deliver its services as a single business.

"I don't think about the business in terms of TV, radio and digital, I think about it as news and entertainment," Mr Chalmers says. The new inventory management system "is going to be an important part of the passage as we get to that point about being a single business."

Mediaworks spent $20.2 million on capex last year, a level Chalmers indicated it would repeat this year with owner Oaktree continuing to support plans to invest in building long-term value. That investment was slated for the inventory management system, growing the digital business, and developing more local content.

"From our point of view it's more relevant engaging local content, it's our competitive advantage because the streaming guys so far haven't shown an inclination to get in that space, and not just in entertainment," Chalmers said. "It becomes an even more important part of the story."

The broadcaster, whose stable includes TV3 and radio stations such as the Rock, the Edge, MoreFM and RadioLive, has been in the spotlight in recent weeks, with chief executive Mark Weldon stepping down last month following the resignation of long-running newsreader Hilary Barry. Mr Weldon cited the "personal cost" of continuing in the role.

The company's cost of content and production increased to $153.2 million, or 4% of total costs of $314.4 million in 2015, compared to $96.1 million, or 47% in the prior period.

Mediaworks describes the television market as challenging, with soft advertising demand and lower returns than anticipated from the investment in content. Advertising revenue fell by $10.6 million or 1.7%.

Radio performed strongly, and Mediaworks invested $6.4 million in spectrum frequency in Wellington, Waikato, and Dunedin, and said audiences for George FM and Mai had increased significantly. The radio market is described as showing "resilience" relative to other markets, particularly through the targeting of regional audiences.

Long-term debt was little changed at $98 million as at the end of December from $98.7 million as at September 2014.

(BusinessDesk)