Naspers Ltd.

views updated

Naspers Ltd.

PO Box 2271
Cape Town 8000
South Africa
Telephone: ( +27) 21 406 2121
Fax: ( +27) 21 406 2913
Web site: http://www.naspers.com

Public Company
Incorporated: 1915 as Nasionale Pers
Sales: ZAR 12.8 billion ($2.09 billion) (2004)
Stock Exchanges: Johannesburg NASDAQ
Ticker Symbol: NPN NPSN
NAIC: 511110 Newspaper Publishers; 323110 Commercial Lithographic Printing; 323111 Commercial Gravure Printing; 511130 Book Publishers; 515210 Cable and Other Subscription Programming; 518111 Internet Service Providers; 551112 Offices of Other Holding Companies

Naspers Ltd. is one of South Africa's leading and most diver-sified media companies. South Africa remains the company's single most important market, at 64 percent of its 2004 sales of ZAR 12.8 billion ($2.1 billion). Naspers is also one of the leading media groups in sub-Saharan Africa, with operations in some 40 countries, including the continent's islands states. Naspers has also begun building a presence in Europe, notably with operations in Greece, Cyprus, and the Netherlands, as well as in Asia, especially in Thailand and China. Naspers operates in five core areas. The company's television component includes its control of MIH, MultiChoice South Africa, MultiChoice Africa, and M-Net; the NetMed pay-tv service in Greece and Cyprus; and a 31.1 percent stake in United Broadcasting Corporation in Thailand. The company is also targeting an entry into the future Chinese satellite television market. Internet services is another major part of the group's operations, and includes M-Web in South Africa and Thailand; majority control of SportsCn, a leading Internet portal in China; control of Hong Kong-listed Tencent Ltd., which provides the QQ instant messaging service in China, Taiwan, Thailand, and elsewhere in Southeast Asia and in South Africa; and the Media24 Digital brand of e-media Web sites. Print media represents Naspers origins and includes its 60 newspaper titles, such as Die Burger, Beeld, Volksblad, Rapport, City Press, and 30 magazine titles, including Drum, Family, Huisgenoot, You, Finansies & Tegniek, and Finance Week, as well as licensed and localized editions of Cosmopolitan, Runner's World, Sports Illustrated, and others. The Book Publishing and Private Education division encompasses Naspers' Via Afika unit, the leading African book publisher operating under a number of imprints, and its Educor private education component, South Africa's leading private provider of onsite and correspondence courses for adults, as well as corporate training programs. Naspers is listed on the Johannesburg, NASDAQ, and Euronext Amsterdam Stock Exchanges.

Afrikaner Voice after the Boer War

Naspers origins lay in the rise of the National Party following the Afrikaner defeat in the Boer War at the turn of the 20th century. The development of the Afrikaner population as a political force in South Africa at the approach of World War I brought a need for the creation of a pro-Afrikaner media that could escape the domination of the country's English-speaking population. In 1915, sympathizers of the National Party launched the first Afrikaans-language paper, Die Burger, in Cape Town. A new company was created as a holding company for the paper. The company was called Nasionale Pers (or National Press), underscoring its relationship with the National Party. Naspers, as the company came to be called, remained a dedicated supporter of the National Party throughout its later dominance of the South Africa government. Nonetheless, Naspers remained financially and editorially independent from the National Party and later became somewhat critical of at least some of the National Party's apartheid policies.

The success of Die Burger led Naspers to add its first magazine title in 1916, a monthly called De Huisgenoot. The company also began extending into book publishing, with its first Afrikaans-language books appearing in 1918 and its first English-language book in 1919. The company also began publishing in Xhosa in the 1922. By then, Naspers had emerged as a prominent South African book publisher, producing many of the country's most prominent authors. During that decade, Naspers also developed a strong textbook publishing business, particularly for the Afrikaans-language market.

Naspers also expanded its newspaper business beyond Cape Town, launching a newspaper, Die Volksblad, in Bloemfontein. Die Volksblad became a prominent daily in 1925, and, like Die Burger, maintained a editorial policy in support of the National Party. In the years following World War II, as the Afrikaner population took control of the South African government, both Die Burger and Die Volksblad emerged as important South African newspapers.

Entering the Media Market in the 1980s

Naspers transferred its textbook publishing business to a separate company, Nasionale Boekhandel, in 1950. The new company grew quickly, and by the late 1950s began to extend into the general publishing business as well with the acquisition of Tafelberg Uitgewers in 1959. Naspers, which created a new educational publishing operation, Nasou, in 1963, took back control of Nasionale Boekhandel in 1973, then acquired another prominent South African publisher, Human & Rousseau, in 1977. Naspers continued to develop its book publishing business during the 1980s, forming the Afrikaans-language book club Leserskring in 1979, followed by Leisure Hour, an English-language book club. In 1986, Naspers acquired publisher JL van Schaik.

In the meantime, Naspers had continued to develop its newspaper and magazine operations. During the 1960s, the company extended its magazine publishing to include its first English-language titles, signaling the group's intention to develop itself as a South African—and not merely Afrikaner—media group. The company's first English-language title was Fairlady, launched in 1965.

In 1970, the company took two of its Sunday newspapers, Beeld and Dagbreek, and merged them together to create a new national Sunday paper, Rapport. This move was followed by the relaunch of Beeld as a daily newspaper for the Johannesburg market in 1974. The following year, the company created a national distribution structure, Nasionale Nuusdistrubeerders.

Naspers took a new step forward in the 1980s when it acquired Drum Publications, a company that specifically targeted the black African reading market. The 1984 purchase gave Naspers a number of leading magazine titles, including the weekly Drum and True Love & Family, as well as the Sunday newspaper City Press. The acquisition was also instrumental in positioning the company for the post-apartheid era.

The 1980s also marked Naspers transformation into a multimedia group. In 1984, Koos Bekker had finished his graduate studies in the United States and was returning to South Africa. Bekker had written a thesis on the emergence of pay-television, especially HBO, while a student at Columbia University, and had recognized that the HBO model provided a model for developing a South African pay-television service. Bekker brought his idea to Ton Vosloo, Naspers' new CEO, in 1984. Together, Vosloo and Bekker formed a new company, M-Net, with Naspers and several other South African publishing groups, including Argus, Times Media, and Perskor, becoming major shareholders. The company then applied for permission to begin broadcasting, which was promptly refused by the government-controlled television monopoly, South African Broadcasting Corporation (SABC). In exchange for permission, however, Naspers had to agree to broadcast only non-news entertainment programming.

M-Net hit the air in 1986 to an enthusiastic reception. Less than three years after its launch, the new company was already posting profits. Bekker, who served as M-Net's CEO, then took the company public, launching its listing on the Johannesburg Stock Exchange in 1990. The listing enabled the company to begin plans to extend its coverage to the entire sub-Saharan African region, and in 1991 M-Net began building its own satellite network. Satellite broadcasting began the following year. In 1992, M-Net entered Europe with a 40 percent stake in pay-television group FilmNet. Then, in 1993, M-Net was split up into two publicly listed companies, the M-Net television channel and MultiChoice International Holdings (MIH), which took over subscriber management and the group's international broadcasting operations. The successful public offering encouraged Naspers to go public as well, with a listing on the Johannesburg exchange in 1994.

A Simplified Structure for the 21st Century

While Naspers' share of M-Net and MIH provided its major growth momentum into the new century, its publishing operations remained a steadily growing and stable cash generator. The company debuted its financial magazine, Finansies & Tegniek, in 1985. In the 1987, the company launched the successful English-language family magazine You. That year, Naspers relaunched its Nasionale Boekhandel stores under the Van Schaik name. In 1988, the company extended its academic publishing business into a new area—that of correspondence education—with the acquisition of two correspondence course providers, Lyceum and Success.

The company acquired Jonathan Ball Publishers, an English-language publishing house, in 1991. Naspers then acquired the South African branch of HarperCollins in 1994. By 1997, Naspers had decided to unite its various book publishing interests under a single structure, merging Nasou into a newly created entity, Via Afrika, in 1997.

Company Perspectives:

Our mission statement. To build shareholder value by operating subscriber management platforms that provide content, services and means of communication to paying users; to licence related technologies and to be useful to the communities we serve.

Beyond publishing, the company became a major player in the South African Internet market with the launch of M-Web in 1997. The company's media operations were also growing strongly, backed by the launch of NetMed pay-television service in Greece and Cyprus in 1995 and the beginning of digital satellite broadcasting operations in Europe and Asia as well as in Africa. The company bought a 50 percent stake in Touchline Media in 1996, increasing its content component, then gained nearly one-third of leading Thai pay-television broadcaster United Broadcasting Corporation (UBC) in 1997. In that year, MIH also became a major shareholder in interactive television services provider OpenTV, a position stepped up to 80 percent in 1999. By then, Koos Bekker had taken over as CEO of Naspers, while Ton Vosloo became the group's chairman.

In recognition of its expansion beyond its original publishing business, the company officially adopted the Naspers name in 1998. In that year, the company also debuted its Media24 brand of Web content, starting with the sites pages24.com, news24.com, fin24.com, as well as online bookseller Kalahari.net. On the publishing side, Naspers acquired a 50 percent stake in religious publisher Lux Verbi in 1999.

Naspers moved to simplify its corporate structure in 2000, regrouping its operations under five primary subsidiaries: MIH Holdings, M-Web, Media24, Nasboek, and Educor. That year also marked the company's entry into the China market with the launch of the sports-oriented web portal SportCN. The following year, Naspers increased its position in China by acquiring a 46.5 percent share of Tencent, which owned the popular QQ instant messaging service.

Naspers continued simplifying its structure in 2002, when it took full control of both MIH Holdings and MIHL (formerly MultiChoice). Naspers then listed its stock on the NASDAQ. The company also sold off its stake in OpenTV that year.

As it turned into the 21st century, Naspers continued seeking new growth avenues. The company targeted further international expansion, launching a Hungarian version of its Women's Value magazine title in 2003. Closer to home, the company debuted the monthly Kick Off in Nigeria that year and also began publishing the weekly newspaper tabloid Kaapse Sun for the Western Cape market. In 2004, another of the company's holdings went public, as Nasper listed its shares in Tencent on the Hong Kong Stock Exchange. The public offering marked Naspers commitment to positioning itself for the Chinese market, particularly with a view to gaining a share at the start up of the country's satellite television industry, which was expected to take off with China's admission to the World Trade Organization in 2005. With the largest part of its revenues generated by its pay-television holdings, Naspers had transformed itself into one of the world's major media groups.

Principal Subsidiaries

Educor; Media24; MIH Holdings; ViaAfrika.

Principal Competitors

New Africa Investments Ltd.; Central Group of Cos.; News Corporation Ltd.; Reed Elsevier PLC; Independent Newspaper Holdings Ltd.; VNU N.V.

Key Dates:

1915:: Publication begins of Die Burger, a newspaper for Afrikaner readers.
1916:: Nasionale Pers is created as a holding company for Die Burger and other publishing interests.
1918:: The company begins book publishing operations.
1925:: Die Volksblad is launched as a daily newspaper.
1950:: Nasionale Boekhandel is organized as a separate publishing business.
1959:: Nasionale Boekhandel acquires Tafelberg Uitgewers.
1965:: The company starts publishing its first English-language magazine, Fairlady.
1970:: Rapport, a national Sunday newspaper, is founded.
1973:: Nasionale Boekhandel becomes a Naspers subsidiary.
1974:: A daily newspaper, Beeld, begins publication for the Johannesburg market.
1977:: Human & Rousseau book publishers is acquired.
1986:: M-Net pay television service is launched.
1988:: Correspondence education services begin with the acquisitions of Success and Lyceum.
1990:: M-Net is listed on the Johannesburg Stock Exchange.
1993:: M-Net is split into MIH Holdings and MultiChoice (later MIHL).
1994:: Naspers is listed on the Johannesburg Stock Exchange.
2000:: Naspers simplifies its structure under five primary subsidiaries.
2002:: Naspers acquires full control of MIH Holdings; the company gains a secondary listing on the NASDAQ.
2004:: Tencent is listed on the Hong Kong Stock Exchange.