by NUR HAZIQAH A MALEK / pic by BLOOMBERG
ASTRO Malaysia Holdings Bhd and Media Prima Bhd are poised to be the biggest gainers from the prospective entry of HBO Max into Malaysia.
CGS-CIMB Securities Sdn Bhd analysts Kamarul Anwar and Mohd Shanaz Noor Azam said the two companies would benefit from HBO Max’s local content production, if any, and become stronger to ward off any piracy threat.
The brokerage has an ‘Overweight’ call on the media sector, with Astro and Media Prima its top picks.
“Astro offers 7.6% to 9% calendar year 2021 to 2022 forecast yields, while Media Prima is riding on a turnaround story,” they wrote in a note on Tuesday.
Traditional advertising expenditure recovery is a re-rating catalyst, besides a better fight against piracy helped by the international studios.
WarnerMedia LLC has confirmed its entry into Malaysia via HBO Max, it’s latest subscription-based video-on-demand (SVOD) service. Astro is WarnerMedia’s distribution partner in the country.
The analysts said there is a possibility of HBO Max being distributed by Astro for the Malaysian market once the SVOD service is ready for rollout.
“Astro is undergoing its most radical transformation since its inception in October 1996, whereby it will limit its focus on direct-to-home satellite broadcasting to mostly live programming, simultaneously shoring up its position as the one-stop-shop for SVOD services in Malaysia.
Kamarul and Mohd Shanaz added that WarnerMedia could turn to Media Prima if the former aims to feature local content in HBO Max.
They noted HBO has set up an HBO Asia Originals wing, which produces its content featuring Asian-centric stories and characters.
They said a content sale and/or co-production deal with WarnerMedia could further bolster Media Prima’s content creation segment’s position as an earnings leader.
Media Prima’s content creation segment’s net profit soared 327.4% year-on-year to RM6.5 million for its first quarter ended March 31, 2021, on the back of content sales to a mix of SVOD services, which was more than enough to offset the losses in the group’s billboard advertising and news publishing segments.
On June 4, WarnerMedia announced the appointment of Amit Malhotra as HBO Max MD for South-East Asia and India, who was previously with Walt Disney Co.
The American media and entertainment conglomerate stated its intention to bring the HBO Max SVOD service to South-East Asia, including Malaysia.
It did not provide the timeline for the launch, but said it would happen soon.
Malhotra was responsible for Disney’s success in forming relationships with local telecommunication providers and multichannel video programming distributors such as Astro.
“With those relationships, Disney was able to ‘create localised payment strategies and develop deep content studio relationships throughout South-East Asia for Disney+ and Disney+ Hotstar,” the analysts said, citing WarnerMedia’s statement.
WarnerMedia’s Home Box Office Inc (HBO) (unlisted) has been offering HBO Go to Malaysian viewers since May 2019 in partnership with Astro.
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.
“HBO Max, on the other hand, 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,” they wrote.