Urban Brew Studios, founded in *1993, is a content producer for television, specialising in live-to-air broadcasting and more recently channel creation. Kagiso Media acquired a controlling interest in Urban Brew Studios in November 2008.

In the 2009 financial year, Urban Brew Studios continued to entrench its position as one of South Africa’s foremost television studios and content providers specifically in the area of live-to-air broadcasting, with a strong focus on capacity building in the rest of Africa, format development, environmental programming, knowledge-based content and community television development.

Urban Brew Studios delivered a solid financial performance for the eight-month period since Kagiso Media acquired a 50,1% equity stake in the business on 1 November 2008. Despite the negative impact of the SABC’s delay in renewing some of its commissioned productions, Urban Brew delivered revenue of R129,5m.

An internal cost-management drive had a positive impact on the bottom line. The implementation of better production plans, resource strategies and tightly controlled internal budgets in the previous financial year contributed to the achievement of R26,0m in operating profit.

Urban Brew Studios’ business model centres on content provision although its business has diversified into a number of key areas, the most significant being channel development and sales. It intends building local and international partnerships in DTT (digital terrestrial transmission) and PPV (pay per view). The business has achieved significant success in PPV with the One Gospel channel and it has also developed South Africa’s first community television channel, Soweto TV, over the past 24 months.Unique to Urban Brew Studios is the value chain associated with its business. This approach provides a distinct differentiator in that the business can compete on a cost-to-quality basis which sets it apart from its competitors. As a content provider it also complements Kagiso Media’s broadcast strategy by generating revenue streams which are not directly linked to advertiser income.

Urban Brew Studios’ senior management team has an average tenure of more than ten years and with its in-house creative expertise, technical staff, as well as its extensive infrastructure of studios and post-production facilities, the business is able to supply services across the value chain.

Contract retention and renewal are of paramount importance, especially with regard to the traditional core business of content production for broadcasters. Exciting new opportunities in both the pay TV platform space, as well as the free-to-air community TV environment are expected to be finalised in the next six months. Urban Brew Studios is cautiously optimistic about the short-term outlook. It will continue to protect and nurture its core business and margins, while pursuing new opportunities to secure media real estate and content production market share locally. In future the acquisition of media real estate, developing commercial and community channels, as well as diversifying media platforms will be the focus.

Urban Brew Studios’ objectives for 2010 can be summarised as follows:

• To consolidate and improve its internal production process;
• To pursue new opportunities and advertiser funded content;
• To consolidate, improve and extend the strategic relationships with existing and potential buyers of content;
• To access new broadcast platforms and broadcasters with new products; and
• To continue to explore new opportunities in content provision and platform management in the rest of Africa.

*Rectifying error in the Kagiso Media Annual Report 2009, which states that UBS was founded in 1983