PETALING JAYA: Star Publications (M) Bhd, which has gotten shareholders’ approval to change its name to Star Media Group Bhd, has devised a growth strategy that will be based on digital media and an expansion drive into Asean markets.
The transformation programme would be based on five key strategies that would see Star enhance its corporate governance, improve on efficiency and cost control, rebuild its core assets, digital transformation and look at strategic and synergistic acquisitions.
“The Star is facing challenges from the digital media and it is a challenging environment,” chairman Datuk Fu Ah Kiow told reporters after the company’s AGM yesterday.
“We have to change and transform and not just depend solely on print.”
To drive revenue, Star will be launching its Audience Interest Marketing (AIM) service, the first by a Malaysian media company, in June that can connect advertisers directly with their target market, tailoring online advertising to match the preferences of consumers of media content.
“In the past, you did not know if advertisements would reach the target group. Now, we have a database for advertisers,” said Fu.
The Star Online is the top news portal in Malaysia and The Star has a past-week readership of over 1.4 million.
The Star commands the lion’s share of the English advertising expenditure or adex market with a 61% slice, more than double that of its nearest competitor.
Group managing director and chief executive officer Datuk Seri Wong Chun Wai said the company has rolled out a new version of the Star Mobile app, where readers can watch video clips.
There would be more video content for readers and consumers via this platform.
“Breaking news, crime, lifestyle, entertainment and youth issues are just some of the content that can be delivered to mobile phones,” he said.
Wong added that the video element was also important to Star TV, the company’s online TV platform previously known as SwitchUp TV.
Digital transformation is the most important strategy for the group, where content can be delivered to the mobile phones of consumers.
“Because of the digital element, we can expand the boundaries of readers to the whole of Asean. We will aggressively increase our video content,” said Fu.
Star will also look to add more exhibitions, given the success of i.Star Ideas Factory Sdn Bhd, which organises the successful Perfect Livin’ exhibition. Singapore-based subsidiary Cityneon Holdings Ltd has proposed to acquire Victory Hill Exhibitions Pte Ltd for S$21mil (RM57mil). Victory Hill owns the rights to operate, market and promote Marvel’s Avengers S.T.A.T.I.O.N. (Scientific Training and Tactical Intelligence Operative Network) for display in museums and science centres or other similar venues.
Fu said Star will start to generate returns from that acquisition, as more exhibitions are being planned around the world.
Exhibitions on Marvel’s Avengers have been launched in South Korea and New York in the United States. Future exhibitions are being planned for Singapore and Las Vegas.
That purchase meets a target for Star in terms of strategic and synergistics acquisitions.
“Star’s reserves should be used to get better returns instead of only putting the money in a bank,” said Fu.
To improve business performance, Star is looking at the verticalisation of its advertising business, which will start with its property business unit that has print, digital, classified and exhibitions in a holistic manner.
The Star’s property portal is the second largest in the industry.
“We should bundle the services together,” said Fu, adding that the model will be repeated in automobile advertising.
To ensure Star is strategising effectively, improvements in corporate governance have been instituted.
Board members will oversee individual business units to ensure greater accountability and future investments will be thoroughly studied.
“This is to make sure that risks are minimised and due diligence will be done before a decision is made on investments,” said Fu. Board committees on nomination, audit, remuneration and finance have been activated.
Print remains the cash cow of Star, but its revenue contribution to the group has been declining over the years.
Combined with the group’s online operations, revenue from the print and online divisions accounted for 70% of group revenue of RM1.013bil last financial year.
But on a pre-tax-profit basis, print and online made up 89% of group profit. Total pre-tax profit was at RM153.4mil.
The company cleaned up its operations last year by undertaking various mitigation measures and saved RM29.6mil through a voluntary separation scheme, divestment of unprofitable magazines, changing the newsprint stock density from 45 gsm to 42 gsm and the abolishment of some positions in the organisation.
Star also provided for impairments on a number of businesses such as its TV station LiTV, Star Radio, Star Accelerator Fund and film rights that it owns. Group revenue dropped 1% last year and on a normalised basis, excluding the impact of cost-cutting and impairments, pre-tax profit would have declined by1%.