APOS: Five Themes From Day One

Many of Asia’s leading pay-TV operators are convening with premier content providers and technology vendors at the first Asia Pacific Operators Summit, organized by Media Partners Asia, and being held over May 5 and 6 in Bali.

With the first day of the Summit now over and the second about to begin, here is a taste of some of the themes that emerged, as articulated by some of the speakers from day one.

1) ‘We must deliver meaningful exclusivity to our partners’
David Haslingden

Fox International Channels president David Haslingden signaled a welcome desire to work closer with pay-TV operators in the future, but not before an admission of guilt - FIC, among others, were among the first to cheer whenever new distributors challenged existing distribution partners. After all, Haslingden reasoned, what’s wrong with a new source of revenue?

Haslingden doesn’t believe that any more however, blasting the view that every new distribution platform is additive as “naive”. There are new carriers that threaten to commoditize content, and ultimately undermine the industry, by using content as a means to different ends that include broadband sales and targeted advertising, he warned.

Haslingden's new policy? Content providers must not only work with operators to build an attractive pay-TV product but steer clear of those who might destroy it - including unnamed ISPs, state-owned telcos and device manufacturers.

2) ‘Analog business models cannot simply be transformed into digital-based business models’
Bambang Subijantoro

Digitization means change, and television must be able to adapt to stay competitive, stressed Bambang Subijantoro, director-general at Indonesia’s Ministry of Communication and Information Technology, opening the inaugural Asia Pacific Pay TV Operators Summit in Bali. Change means change in business models, in how infrastructure is used, how much content available and how TV audiences behave, Bambang said.

The regulator for India, another large market in the midst of a transition from analog to digital TV, is looking at retuning legislation there. R K Arnold, secretary of Trai, revealed that the regulator is looking to implement more free market mechanisms for digital TV in India. Changing market dynamics should lead to changes in regulation too, with Fox International Channels president David Haslingden singing the praises of the Digital Economy Act in the UK, which seeks to crack down on pirated content online, while warning against the industry-stifling effects of over-regulation.

3) ‘It’s not an easy return on investment scenario. It is something that has to be done’
Grant Ferguson

Product innovation is vital, but no longer the Arpu-driver it once was, delegates heard several times throughout the first day of Asia Pacific Operators Summit. Malaysian DTH platform Astro plans to invest plenty of money into a wide range of interactive services for its subscribers, so much so that its major shareholders want to take it private, but not one of these new services will make much of a difference by itself, said Grant Ferguson, company CFO. The roadmap includes HD, VOD, PVR, IP and IPTV - anything that can add value to the consumer and differentiate Astro from rival services.

John Porter, CEO of Australian pay-TV operator Austar, also wants to step up investment in his platform, arguing that pay-TV in Australia has been lazy in relying on its proposition of greater choice for so long, and needs a new story to tell to help drive penetration. “We are at an inflection point where we need to re-examine our business model,” he said.

4) ‘The potential of India is clear. Whoever can execute, wins’
Sameer Manchanda

India’s fragmented cable industry represents one of the largest growth opportunities in Asian media, but the days when being in the right place at the right time made you an attractive investment target are coming to an end, argued Sameer Manchanda, promoter of cable consolidator Den. Investor money will increasingly flow to firms who show they have the skills to capitalize on that growth opportunity, and firms looking for additional capital will have to convince investors they can execute too.

Manchanda is now under immense pressure to meet quarterly targets since DEN’s IPO last year, but that pressure has its benefit, the veteran entrepreneur says, focusing attention on what drives the business, with a keen eye on upgrade costs in a low-Arpu market.

Consolidation has its benefits, helping DEN plug revenue leakages within India’s dispersed local cable industry with digitized networks, providing more channel choice in a country where the analog dial is already congested. The digital box, and the additional choice it provides, will be one of the key drivers of cable in the future, rather than any of the added extras, such as HD or PVR, that digital enables, Manchanda said.

5) ‘We’ve seen phenomenal growth as we’ve started pushing for the lower-end of the market’
Carlo Katigbak

Legal pay-TV remains a niche premium service today in the Philippines and Indonesia, two of Southeast Asia’s largest consumer markets where terrestrial TV reigns supreme. That should be about to change however, as pay-TV operators start to push out cheaper services to the wider market.

Pay-TV growth had hit a ceiling in the Philippines explained Carlo Katigbak, COO of the country’s largest cable operator, SkyCable.  A rollout of digital set-top boxes allows SkyCable to offer different packages aimed at different segments however, infusing the operator with fresh vitality, with 100% sales growth this year.

Lower price points not only attract new subscribers, but many of those soon upgrade once they have sampled what pay-TV has to offer, noted Rudy Tanoesoedibjo, CEO of MNC Sky Vision, Indonesia’s dominant pay-TV operators which has already started to reap the rewards of a multi-segment strategy.