The largest company in Africa by market capitalisation is headquartered in Cape Town, derives a large portion of it profit from shares in a company based in Hong Kong and if you’re reading this then you’ve undoubtedly been exposed to one of its products somewhere on the continent.
That company is Naspers and its latest set of financial results for the first half of the year were released yesterday. The most profitable part of Naspers isn’t its African businesses like Media 24, though. No, it’s the Hong Kong-based company known as Tencent, which produces videogames and IM clients and is 34% owned by Naspers. In yesterday’s results, it brought in R6.2 billion of the company’s R34.4 billion in earnings or around 18% of the total.
That massive split in the earnings shows just how big a part of Naspers’ plans for the future are based on Tencent.
Tencent will be most recognised by South Africans for its instant messaging network WeChat which now has 468 million monthly active users, almost as many as WhatsApp (600 million) and Facebook Messenger (500 million).
Good news for Naspers and its shareholders today then is that Tencent has just signed an exclusive licensing agreement with HBO to offer the American network’s TV shows on the Tencent Video online streaming service to Chinese audiences. HBO is the studio behind some of the biggest TV shows on air with the like of Game of Thrones, The Sopranos and True Detective which have, until now, been unavailable in China via any legal means. HBO’s programs are available in South Africa through one of Naspers’ other media divisions Multichoice on its DStv satellite broadcast network, but you can’t watch them legally on the internet here either.
“It is exciting to have our content being distributed in China with a legitimate distributor,” an HBO spokesman who spoke to the Wall Street Journal said. “We expect this to serve as a nice counter to the piracy that is going on inside the country.”
While Chinese censorship bureau will still have to approve all of the shows before they are allowed to be shown in the country with a new set of stringent laws that are set to come into place in early 2015.
HBO’s annual revenue is already pushing close to the $5 billion (R55 billion) mark, with almost a quarter of that made up by overseas distribution agreements for shows like Game of Thrones and this agreement will more than likely result in a massive increase in earning for both parties.
[Source – WSJ]
