LOCAL cable stations Reggae Entertainment Television (RE-TV) and Jamaica News Network (JNN) are now profitable and have targeted overseas markets as a major source for revenues going forward.

RE-TV and JNN became profitable over the year ending March 31, 2013, reported media conglomerate, Radio Jamaica Group (RJR), the parent company of the two stations.

Gary Allen, managing director of the RJR Group, said the cable TV providers were primarily driven out of the red by prudent cost-management measures, including the integration of the stations on RJR’s Lyndhurst Road headquarters. The cable companies were relocated from leased property in Little Premier Plaza.

“There were a raft of things that we saved money on based on the relocation,” Allen told the Business Observer yesterday.

Among the expenses significantly reduced or cut because of the move were cost for rent, standby generating, Internet, and technical services, transportation, security and telecommunication, Allen said.

He noted that the result was consistent with the trajectory that the companies were on for the last five years.

“It’s not surprising, because for the last five years they have been showing reduction in their losses and getting closer and closer to that point where profitability would have been achieved,” Allen said.

RJR acquired RE-TV and JNN in 2006. Both companies were founded along similar visions — 24-hour reggae entertainment and 24-hour local news channels were seen as viable here in Jamaica.

RJR’s financial statements are not segmented to isolate the performance of the cable companies from free to air television. The audio-visual segment, combining both units, posted revenues of $1.2 billion for the 2013 financial year, marginally higher than the year prior.

The domestic market for local cable companies is stagnant, but Allen said the stations have been realising increased business from overseas.

“We have not seen significant growth in the local cable market in terms of take-ups and viewership, but what has happened is that, in the case of both channels, we do have some overseas distribution,” Allen said, noting that RE-TV is popular in Trinidad & Tobago and St Lucia, while there has been growing interest for JNN in areas with a strong Jamaican diaspora, such as Cayman Islands and Turks and Caicos Islands.

Against this background, RJR has made overseas penetration a big part of its growth strategy for the cable companies .

“The strategy, going forward, will be more expansion overseas, more hard currency earnings, and expansion on different media platforms,” Allen revealed.

What’s more is that the media group plans to roll out the network on different media platforms, including IPTV and social TV.

“We are not going to keep these channels as traditional cable channels,” noted Allen. “If content remains king and the technologies are providing different pathways, we are going to be going on those pathways to earn as much as we can.”

Meanwhile, RJR reported that the cable companies were relieved of substantial debt they incurred to RJR during their early years of development. The group posted $36.4 million loss for the year under review, attributed to the company making conservative accounting decisions, including the writing off of $36.4 million in receivables from the cable stations.