K+ takes on heavy losses for market expansion strategy

VTV's divestment in the VSTV may need a significant time

Aiming to expand its market share by a significant margin in the local television market, since 2010 K+ has been pouring a lot of money into purchasing the broadcasting rights of leading global entertainment programmes. The costs of the broadcasting rights are estimated at hundreds of millions of dollars.

Most recently, the television won over the social network Facebook to broadcast the Premier League in 2019-2022 in Vietnam. K+ also owns other broadcasting rights of leading sports programmes like the Champions League (C1) and the UEFA Europa League. In addition, the television channel has partnered up with cinema giants BHD, CJ, and others to exclusively broadcast their movies.

Fuelled by the ambition to lead the television market, K+ has suffered more than $130.4 million in losses after nearly one decade of operations, reducing its equity to negative VND2.7 trillion ($117.4 million). Currently, K+ depends on bank loans to remain in operation.

As of the end of 2018, the broadcaster’s total debts hit VND3.281 trillion ($142.65 million), including VND1.1 trillion ($47.82 million) from bank loans.

Another reason behind these losses is the company cutting prices to compete with rivals VTC, Viettel, SCTV, and FPT. In addition, the increasing price of broadcasting rights also caused difficulties to the television. Specifically, it purchased the rights to the Premier League in 2010-2013 for $13 million, while the price was $41 million for the 2013-2016 seasons and $46 million for the 2016-2019 seasons.

K+ television is a channel of Vietnam Satellite Digital Television Limited (VSTV), which was established in 2009 in a 51-49 joint venture between Vietnam Television (VTV) and French-based Canal+ Group.

Over the past few years, VTV has been trying to divest VSTV. However, with its long years of losses, there has been little success.