Madeleine Wackernagel
He’s not exactly Ted Turner or Rupert Murdoch, but William Kirsh (36) is certainly following the global trend. This week’s announcement that Primedia, a listed company worth R2,5-billion, is forming separate music and film divisions is another step to realising his ambition of becoming South Africa’s own media mogul.
The rationale is simple: in an industry with significant barriers to entry, it makes perfect sense to control the creative, production and distribution sides. And media is one business where being big really is better. More capital means more opportunities for the industry as a whole.
Primedia has also emerged as a key mover in the race for a new private television licence.
It has taken a 16,5% stake in Free-to-Air, one of the strongest consortia bidding for what could become the country’s most lucrative broadcast licence.
Primedia also owns Radio 702 in Johannesburg, Cape Talk in Cape Town and manages and co-owns 95.7 Highveld Stereo, which is apparently showing great leaps in listenership after it was bought from the SABC two years ago.
Analysts were unanimous in their praise for Kirsh’s move, especially in light of the changes in prospect for film and television this year. The new free-to-air commercial television channel, plus potential foreign investment, presents significant opportunities for growth.
Says Peter Armitage, media analyst at Deutsche Morgan Grenfell: “Up to now the industry has been largely in private hands. But then came the listing by African Media Entertainment and now this move. It’s very exciting for the industry as a whole and marks the beginning of an expansionary phase.
“It’s all good news for local content and local producers.”
The same principle applies to the music industry, he says. “The music market has been very fragmented with lots of small players. But they lack the capital to do anything significant. So having the might of Primedia involved means more opportunities for local acts.”
Primedia Music will have a 9% share of the market through its controlling interest in Look South Records and Wet Moon Publishing (bought from Johnny Clegg), Transistor Music, The CSR Group and Real Concerts.
According to Kirsh, the move means Primedia is better placed to “become the prime purveyor of South African and African music to both local and international markets. We intend to develop a leadership position in the licensing of independent international material for South African and African markets”.
The same tactic is being applied to film. Primedia Filmed Entertainment consists of three businesses: Velocity Films, Catalyst Films and the Toron Screen Library, with Jeremy Nathan, head of Catalyst, at its helm.
Kirsh’s plan is to bridge the chasm between producers and distributors and put local film on the map.
“South African film has been sadly neglected. But this move changes all that. More money now means more competition and more opportunities,” says one insider.
The R148-million deal, following hard on the heels of last year’s Ster-Kinekor buyout, makes Primedia the biggest and most diversified media group in the country. And while there was some criticism of the high price paid for Ster-Kinekor, analysts reckoned this deal was fair. “Being cash- funded, rather than financed through a rights issue, is also positive,” says Armitage.
Profits last time were up 60% and a 45% increase is expected this year.