We live in a very different world today as compared with 10 years ago whereby Malaysia internet broadband speed is crawling slowly, testing our patience to watch videos online. Since 2018, broadband speed in Malaysia has improved quite signficantly as the biggest internet broadband provider - Telekom Malaysia - aggressively cutting prices and increase the internet speed for its customers. 

Against this backdrop, there are never-ending talks about the Death of Free-to-Air (FTA) TV. It is particularly true in Malaysia given that Nielsen data showed that Malaysia ADEX has been on a down trend in the last 5-6 years. News reporters have had this rhetoric of FOREVER declining ADEX on traditional FTA networks. It is true that Media Prima, along with other traditional newspapers publishers in Malaysia are not able to counter the digitalisation trend. 

However, i believe many market observers are forgetting a very simple fact in the media industry. Let me explain this as simple as i can. 

First of all, Netflix is no doubt the global online video streaming platform. For RM 33 a month, you get to watch all sorts of drama, movies, documentary, variety shows. Assuming you do not need to work, you won't be able to watch even 1% of the video contents on Netflix. There are simply way too many contents on Netflix platform. 

Netflix's share price has gone up fro $16 in Sept-2011 to currently $330, up 20x in a short span of 8 years. Why is the share price performed so well in the past decade? 

If you read some of the investment banks research reports online, you would realize that those professional stock analysts are valuing Netflix not simply based on the 150m active subscribers that they have, but also valuing the intangible values from Netflix's content creation. Netflix spends at least US$12bn - US$15bn a year in producing contents. That number makes Netflix the world's largest Studio. To give you some perspective, filming Avengers End Game costs about US$356m and the Movie is a global phenomenon that raked in US$2.7bn in box office. 

So, Netflix's annual budget for content creation (US$15bn) is equivalent to creating 41 Avengers End Game. Assuming these 41 versions of Avengers End Game would each rake in US$2.7bn in box office, that translates to US$110.7bn in gross revenue from the 41 Avengers End Game. 

Of course, in reality, there isn't 41 Stan Lees to create 41 great movie of all times like the Avengers Series. The point i would like to make here is that content creation is the linchpin of all video broadcasting platforms, be it FTA networks, Cable TV or online video streaming services. 

Media Prima owns the top 3 most popular TV Channels in Malaysia, TV3, NTV 7, 8TV, and viewers in Malaysia will never subsitute these three TV channels for alternative, simply because there is no alternative local video contents providers. 

Even if you look at the meteoric rises of Facebook, Google and Youtube in U.S. internet in the past decade, major news outlets such as CNN, CNBC, Fox News, never get displaced. Their top News Hosts are still making tens of millions in salary every year. 

If you read enough news articles on internet, you would have known that Media Prima is the largest digital platform in Malaysia, surpassing Facebook and Google by a tad. Yes, Media Prima is the largest because it owns way too many digital platforms in Malaysia. In aggregate, its number of active users is higher than Google's platforms and Facebook. 

Anyway, i don't believe that FTA TV will disappear over the next 5 - 10 years. On the contrary, i believe traditional media outlets will benefit greatly from the digitalisation of media contents. Simply because internet allows media company to better target their audience with their customers' favourite contents. Meanwhile, advertisers are also able to maximize their profit from limited Ads budget. It's actually a win-win situation for everyone. 

The question is, does the traditional media top management willing to bear the brunt of losing more money in the short-term, eyeing for bigger gains in the long run???