Asia’s pay-TV ecosystem remains in good health, bolstered by continued subscriber growth and a steady increase in local ad sales.
Its future however is anchored to the evolution of content dynamics, which could prove to be as influential as consumer trends in determining the industry’s future.
“It’s all about growing the consumer value proposition in the context of technological change, competitive dynamics and investment appetite,” says Vivek Couto, executive director of Media Partners Asia (MPA), publisher of Media Business Asia.
“Getting on the right side of that equation – with scale – drives strategy, execution, content flow and product innovation.”
Multiscreen services, known as TV Everywhere, are now common in Asia outside China and India, offering improved windows and largely authenticated to pay-TV subscribers.
“There have been strong, aggressive responses from players that own most of their content and have incubated applications over a long period of time,” observes MPA analyst Aravind Venugopal.
“What is striking is that in a number of markets, especially Singapore and Hong Kong, user interfaces and packaging around the core pay-TV proposition could be improved to make services more user-friendly and intuitive, in contrast to advanced markets such as Malaysia and Australia and growth markets such as Indonesia and India.”
Invariably, content dynamics prove critical.
Players in Hong Kong and Singapore are more pipe-driven than content-denominated, in contrast to the likes of Astro in Malaysia, Foxtel in Australia and MNC in Indonesia.
This is changing. In Hong Kong PCCW is steadily increasing its investment in local content, while StarHub is preparing to do the same in Singapore.
Nonetheless, neither player has yet to make bets on content that could prove game-changing in the future.
Both markets rely on content from global and regional brands as a result.
Therein, lies the tension.
Most global groups, including Fox, HBO and Disney, want to control dedicated internet services under their own brands rather than as part of an operator offering.
At the same time, a number of them do not produce or own much of their content beyond key local franchises, such as Chinese and factual content for Fox. This makes internet rights problematic.
Pirated, downloaded or free
Multiscreen monetization meanwhile remains an uphill battle. Operators are wary of shelling out more dollars to third party channels while the latter are keen to net incremental subscription revenues, as the lack of appropriate measurement systems makes it difficult to tap revenue from advertising.
In Asia, paying for online content remains a moot point. “Consumers aren’t, yet,” notes Rohana Rozhan, CEO of Astro Malaysia.
“It’s all pirated, downloaded, or free content,” Rohana adds.
“The exception is Astro and music downloads. We have to figure out how to position ourselves to serve a growing need.”
Astro broadcasts 169 TV channels to more than half of Malaysia’s TV households, spending up to US$500 million a year on content for Malaysia’s broad and diverse demographics, including more than 9,000 hours of self-produced content aired across 72 own branded channels.
“We think of ourselves as content producers, creators and aggregators, providing a value proposition that customers we serve will find attractive,” Rohana says.
“How we structure our proposition in a digital environment is important, which means looking at on-demand content and some of our key local brands.”
From satellite to multiplatform
Astro’s main mode of distribution remains satellite-based but in recent months it has tied up with sister company, Maxis, to launch content-based services (21 channels plus 700 hours of VOD programming) bundled with high-speed internet, targeting 700,000 new households.
In addition, the company has launched Astro-on-the-Go, an online service available commercially to non-Astro customers.
Astro-on-the-Go passed 500,000 downloads earlier this year.
The service also launched internationally in 2013 for Malaysians who live abroad.
“Astro-on-the-Go is not about replicating our 169 linear channels... if you do that you’ve lost the plot,” Rohana says.
“It’s about delivering multiplatform value to our existing base and also a new segment of customers altogether.
"Whether we expand globally on Astro-on-the-Go to beyond just Malaysians depends on the consumer need and whether we can capitalize on our relationships with other content providers.”
In other words, watch this space, but if Astro-on-the-Go's success continues, expect Astro’s OTT forays to intensify.
The company has its own production arm which can ramp up programming for multiple pipes at home and abroad, possibly in conjunction with other partners.