Is Uzalo undervalued?

This last weekend was an interesting one as South Africa all of a sudden had to face evaluating the value of a TV show. This was sparked by a big news article on the cost of South Africa's current #1 show Uzalo. Not to get into the politics, thought it might be interesting to crunch some numbers and see if Uzalo is over/under valued.

Viewership Data

Below is the viewership comparisons of the top shows on SABC1 over a 5 month period in 2016.

SABC1 Feb-Jun 2016 Viewership Data

SABC1 Feb-Jun 2016 Viewership Data

Just to also be clear, SABC1 has the most viewership across all stations or media providers in SA. Here are some viewership stats for other tv stations.

SABC2 June 2016 Viewership

SABC2 June 2016 Viewership

ETV June 2016 Viewership

ETV June 2016 Viewership

My understanding is the viewership also affects the Advertising Rates (ARs) that SABC charges for advertising during shows. Given this, we can move on to doing some back of the napkin math.

Advertising Rates == $

SABC publishes its advertising rates and as such we can do some quick calculations to figure out how much Uzalo makes for the SABC. For June 2016, their rate was R220k per 30 seconds. If we assume that on average 5 minutes of ad time are available, SABC makes R2.2mil for each episode. There are about 156 episodes in a year. If we were conservative (advertising rates fluctuate) and say that the average rate for the year was R220k/30 seconds, R22mil per episode, then SABC would make R343mil conservatively.  Generations on the other hand flights 260 episodes per year, and lets say with Advertising rate of R2.1 mil per episode that is about R546mil for SABC for a year. Now that might look like a large number but Uzalo costs R53 mil and Generations R80mil. The ratios are different, for Generations  SABC makes 6.825 what it spends, but on Uzalo it makes 6.472. As such for now, Generations slightly pips it out and we likely could say that Uzalo is valued just right. The prime time slot works in its favour and if it keeps on growing those ratios could increase.

Resources

 

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