The collapse of profits at eMedia Holdings, owner of free-to-air broadcaster e.tv, to just R32-million in the year to end-March, from R170-million the previous year, has market watchers wondering whether the company can recapture its former glory.This week's shock profit announcement by eMedia comes 18 months after CEO Marcel Golding was unceremoniously elbowed out.A permanent CEO has yet to be appointed. Kevin Govender, the financial director of Hosken Consolidated Investments - co-founded by Golding and which owns the majority stake in eMedia - has been serving as acting CEO.Only three years ago, eMedia - then trading as Sabido Investments - was rated as one of the more promising South African broadcast media businesses. HCI reported a R639-million profit before tax from these media assets in 2012, after a steady rise in profits since 2002.In the year to the end of June 2013, Stellenbosch-based investment company Remgro valued its 32% minority stake in the business at R2.3-billion - which inferred a value of around R7-billion on largely the same assets that today make up eMedia.But now the company's market capitalisation - of R2.5-billion - is less than half of Remgro's valuation three years ago.An investment manager, who declined to be named, said HCI needed to step up to the plate."HCI have proved to be excellent allocators of capital, and have done well to build up their media assets. But with eMedia's profits falling out of bed, they need to show they can run a business and build up value in a trickier trading environment."In comments accompanying the financial results this week, Govender said the past financial year had been difficult, with revenue from the group's core asset, e.tv, coming under "continual pressure".The revenue line for eMedia, though, did show a slender 1.7% increase to R2.43-billion. Govender said e.tv's advertising revenue came under pressure as a result of a sharp drop in market share in the previous financial year.According to HCI's annual report, market share was lost to DStv and SABC, which attracted viewers with World Cup sporting events, by investing in local programming, and by aggressively scheduling shows counter to e.tv's.Govender said changes to the schedule at e.tv had halted the slide. "It has seen the market share of e.tv recover, once again becoming the most-watched English channel in South Africa."But e.tv had to invest hugely in local programming - causing cost of sales to increase 11% to R1.09-billion. Govender said the investment was necessary. "The market share of e.tv was stable for the latter part of the financial year, and advertising revenue should once again be more reflective of market share."But the bottom line makes ominous reading. The loss attributable to shareholders was R64-million, compared with a profit of R125-million in the previous financial year. Admittedly, this does include a loss of R145-million for discontinued operations: eMedia continued to disinvest from noncore assets that were accumulated during Golding's tenure.There's also not much good news on the OpenView HD roll-out. Govender said that an investment of R262-million (on top of the R245-million invested last year) was made in the past financial year "with very little revenue recorded". But the number of OpenView HD set-top box activations more than tripled to 388812 at the end of the financial year.Govender said he believed the investment in quality channels and a multichannel platform would stand eMedia in good stead when digital terrestrial TV eventually arrived in South Africa.The company's eSat.tv division performed well and its flagship eNCA news channel remained the most-watched news channel on DStv.But the long-term contract with DStv terminates soon. Govender said the indications were that DStv wanted to enter into a new agreement to keep the news channel on its platform.Govender warned, however, that a new deal with DStv would mean that eSat.tv's performance would not be sustainable.As things stand, the market seems oblivious to the bigger picture, dismissing the possibility of HCI and Remgro playing a starring role in bringing profitable growth back to the company.HCI and Remgro worked closely in the late '90s to ensure that e.tv pulled through a difficult and capital intensive start-up period. But at this delicate juncture, there is even speculation that Remgro might be a seller of its eMedia interests...