One way to get to know how Nigerian businesses make money is to look at their annual report. Unfortunately, there are just under 200 companies quoted on the Nigerian stock exchange with over 5,000 more not listed anywhere. Fortunately for us, DAAR Communications Plc, a TV station is quoted and recently released its 2014 annual report.
The annual report provides a unique insight into the company’s finances and how it makes money. Here is a snapshot
From the above, DAAR communications owners of AIT and Ray Power makes money mostly from its Television segment. Also poignant to note is that about  N2.3billion or 32% of its revenues come from Agency sales which basically is sale of adverts to Corporates. It also makes another N1.8 billion from personal paid adverts which do not necessarily come from ad agencies. AIT apparently made just N94 million from “In House Program” which analysts believe is its own propriety content.
Nigerian TV stations have for years relied on paid adverts and sponsored programs as a revenue model shying away from developing their own content. They complain about the low margins inherent in proprietary content suggesting that they have not been able to figure out a way to monetize it. Content creation is a money spinner abroad with large TV networks owning series, TV shows and even movies. They air this content to their customers and also make a ton of cash on subscriptions, licensing and other ancillary revenues.
Segment reporting
The above snapshot also reveals the radio station post a Gross operating loss for the period reversal from the N128 million Gross profit it made a year before.
