The headquarters of Next TV in Taipei, which has become a money pit for the Hong Kong-based group. (File photo)
Having made a big success in print media in Taiwan with its Next Magazine and Apple Daily newspaper, the Hong Kong-based Next Media group made a confident entrance into the TV market in 2010. However, after a two-year delay on obtaining a cable channel, the new project Next TV has become a money pit for the group and its shares have plunged in Hong Kong bourse, reports our sister newspaper China Times.
The group announced a warning on profits for the third time and unexpectedly shut down its financial news station, while the group's shares plunged from their highest level of HK$1.5 (US$0.19) to HK$0.61 (US$0.07) within two years.
After a one-year trial period on the internet, Next Media secured a cable TV license in July last year. However, it currently broadcasts via a cable channel only in the central and southern areas of Taiwan. Lacking stable revenue, the TV station has offset profits from the group's other outlets for some time.
According to its latest financial report, before Next Media founder Jimmy Lai began his foray into television in Taiwan, Next Media posted a profit of HK$300 million (US$38.6 million) in 2010. The group began to show a deficit of HK$275 million (US$35.4 million) during the latter half of last year, however, with the internet and TV section losing nearly HK$500 million (US$64.4 million).
Media outlets in Hong Kong have predicted the total yearly deficit for Next Media may reach HK$700 million (US$90.1 million). Lai admitted last month that the Next TV is losing NT$100 million (US$3.4 million) per month.
The financial report also indicated that the group's operation was mainly funded by cash. As of last September, the group was qualified to borrow HK$1.62 billion (US$208.6 million) from banks, and it had used up 60% of the quota, equal to HK$1 billion (US$128.8 million).
One of the persistent problems for Next TV has been securing a cable TV channel. Though Kbro, the biggest cable TV company in Taiwan, has wanted to offer a channel to Next TV, the plan has been delayed by its modified proposal on shopping channels, which was rejected by Taiwan's National Communications Commission last Friday.
Meanwhile, the group has invested about NT$4 billion (US$135 million) but its TV news and programs have not been as well-received as expected. Rumors are now spreading that Lai may have to include the group's more successful print titles if he attempts to sell off the struggling TV station.
Next Media 壹傳媒
Jimmy Lai 黎智英
Apple Daily 蘋果日報
Next Magazine 壹週刊