mcm entertainment group limited has announced a strategic partnership with
News Limited’s digital flagship, NEWS.com.au. The partnership will enable visitors to NEWS.com.au’s entertainment pages to enjoy the
latest audio and video music tracks from mcm’s weekly Take 40® Chart including access
to top 40 tracks from the past 25 years – all free.
The deal means that Take 40® content will now be available beyond its own website, signalling a shift in
mcm’s digital strategy that takes its high-quality audio and video portfolio across the web
in partnership with major media and content companies, who are keen to offer consumers
rich streaming content.
This is made possible through mcm’s proprietary Media Player and Media Management
technology. Revenues will be generated by selling advertising space within the Media
Player.
mcm’s Chief Executive Officer Tony McGinn said the News Ltd partnership was ground
breaking and flagged a significant step in building an affiliate network of sites across
Australia offering mcm’s syndicated audio and video music services.
The deal will significantly broaden the audience for the Take 40® Chart, with
NEWS.com.au’s entertainment pages achieving more than a million unique browsers each
month. This will make the Take 40® offering more attractive to advertisers, though mcm
has not yet projected likely revenue outcomes.
In a separate announcement to the ASX: The Board of mcm entertainment group ltd advise that the recent softening
and short term buying nature of the national advertising market in this quarter (April –
June 2008), means the company is unlikely to achieve its budgeted FY 2008 NPAT of
$455,000. Full year revenue is also expected to be down by approximately 10% on
FY2008 budget as a result of the above.
Whilst management has instigated material and prudent cost cutting measures, it is
difficult to predict the impact that national advertising sales will have on final revenue and
NPAT over the remaining 9 week period of the financial year. Based on current forward
actual sales and expected prospective sales, the company is likely to achieve NPAT of
between break even and up to $250,000. If market conditions weaken further, this is likely to further affect NPAT.
The underlying fundamentals of the business remain strong. However, like most media
businesses, mcm entertainment group ltd is susceptible to major downturns in national
advertising spend. With the weakening of the advertising market in the 4th quarter, mcm
entertainment group ltd has moved swiftly to cut back all costs where it can without
undermining the strong growth opportunities the company has in digital media and
traditional media. These cost cutting measures are expected to enhance the company’s
performance in FY2009.