All Eyes On APOS 2010

Twenty years ago, they were called pay-TV operators. Then, around 1999/2000, they started becoming pay-TV and broadband operators, driven by network upgrades in the North (Korea, Japan). Today, we like to call them media and communications companies as the Asia-Pacific market shifts towards convergence and growing M&A between competing platforms to drive scale.

Most of these companies, serving over 40 million pay-TV subscribers across more than 10 markets in Asia, will be speaking and attending the first Asia Pacific Operators Summit (APOS) in Bali on May 6-7, an event organized by Media Partners Asia (MPA). Key broadcast groups, technology suppliers and investors will also be speaking and presenting.

There’s plenty at stake. The fundamentals of Asia’s pay-TV and broadband markets are robust but there’s a two-pace feel to the region – between emerging and mature high-tech markets.

The latter group, which includes Japan, Korea, Australia, Taiwan, Singapore and Hong Kong, share a number of concerns. These include: the saturation of traditional pay-TV; the commoditization of broadband (even in the premium 20-100 Mbps segment); irrational levels of video and broadband competition between cable and IPTV and between pay-TV and terrestrial, and; as next-generation broadband networks proliferate, how pay-TV operators should confront video sites and other emerging online distribution platforms, collectively branded over-the-top media.

These themes will feature prominently at APOS, especially as operators in Australia and North Asia focus on continued growth of next-generation digital TV products (anchored to high-definition TV) and the impending launch of over-the-top media services integrated with pay-TV.

Five for future growth 
Emerging or mid-cycle markets on the other hand, where next-generation broadband is nascent, are   still high-growth consumer proxies in which TV viewing and audiences continue to grow. India, Malaysia, Indonesia, China and Vietnam fall into this category with Thailand and the Philippines on the sidelines, at least in pay-TV terms.

India in particular remains a massive opportunity, with cable and satellite ad sales growing at a double-digit pace, pay-TV audiences increasing at a significant rate, and direct-to-home (DTH) services driving digitization in both metro and rural homes. However, a focus on higher levels of capital and competition is intensifying as the necessity of consolidation, digitization and firmer business models grows, creating new challenges.

All eyes are on Malaysia as well, where dominant pay-TV provider Astro is looking to ramp-up HDTV deployment and launch over-the-top media offerings in the future, while challenger Telekom Malaysia develops its next-generation broadband initiative and seeks to expand its IPTV service.

Two additional key themes are likely to reverberate through the discussions in Bali. Firstly, Asia’s policy framework for pay-TV seems to be getting worse before it gets better, with unexpected eccentricities creeping into previously stable markets. Key growth markets meanwhile are still undermined by uneven regulation, which limits consumer choice and the health of the overall ecosystem.

Secondly, the need for more optimized networks and product innovation is growing, with a focus on more compelling content and marketing strategies. This starts with a requirement that platforms and content providers work closer together, to protect and grow the golden goose that feeds them both.