Expanding Pay-TV Penetration Takes Top Billing at APOS

BALI: As Asia's multichannel industry convenes in Bali this week for the Asia Pacific Operators Summit (APOS), a key topic will be how the business can move beyond the region's 52-percent pay-TV penetration rate against a backdrop of slowing subscriber gains, with just 26 million net new additions in 2013, the lowest annual growth rate since 2007.

According to Media Partners Asia's Asia Pacific Pay-TV & Broadband Markets 2014 report, excerpts of which were provided to World Screen ahead of the May release of the study, there was marked deceleration in pay-TV growth rates in China and India in 2013. There were also smaller gains in Southeast Asia—1.9 million net additions, as compared with the year-ago's 3.7 million. The MPA report refers to Thailand as the "big weak link" in this part of Asia, with the continued growth of free TV and free satellite, and the emergence of DTT, threatening the pay-TV ecosystem, MPA says.

Indonesia is identified as a key growth market, as is Malaysia, while Hong Kong, Singapore, Japan and Taiwan will be flat in the years ahead. Small gains are expected in Vietnam. Australia and China will see gains largely on the IPTV front. In Korea, cable, DTH and IPTV are all expected to contribute to incremental gains in the market.

India is set to have 165 million pay-TV homes by 2018, up from 135 million last year, with about 55 percent of them being digital pay TV. The revenue potential of India's digitized pay-TV sector will be discussed at APOS in a session featuring Star India's Uday Shankar and Videocon D2H's Saurabh Dhoot and Viren Raheja.

Thailand, Korea and India will all take center stage at APOS, as will China, with Li Ruigang, chairman of China Media Capital and Shanghai Media Group, delivering a keynote on new opportunities being created by digital platforms in the country.

Also a major topic at APOS this week will be mobile and broadband. TV Everywhere customers numbered 4 million last year, with MPA forecasting this will hit 15 million by 2018. Broadband, meanwhile, is booming, with subs of 575 million last year rising to almost 1 billion in 2018. Understanding how to use OTT delivery systems without impacting pay-TV revenues will be paramount for platforms and channel operators, with the heads of StarHub, SingTel, Astro, MNC and Fox International Channels Asia, among others, all set to participate in sessions at APOS.

Looking ahead to 2015 and 2016, MPA sees net subscriber additions picking up, largely thanks to India, "but the general trend is one of deceleration." Pay-TV penetration is set to rise from 52 percent last year to 60 percent by 2018. Addressing the challenge of expanding Asia's overall pay-TV subs base, Vivek Couto, executive director of MPA, noted: "Much of that will mean confronting what we have not done as an industry in terms of execution, marketing (platforms and channels)—the reality of platform and channel consolidation will be discussed in mature markets and pan-Asia as will the potential construction of wholesale channel bouquets and ad sales houses between global groups. At the same time, channels that do not have compelling consumer proposition across linear and nonlinear conversations, will not have a long-term future on the pay-TV dial in any of the key markets. Television Darwinism will be coming to Asia Pac in force. APOS 2014 will be all about how to make the retail bundle to the consumer more vital—marketing, tiering, content, on-demand services and the role of mobile and broadband in the bundle and how channel/content brands can utilize this. What brands and executions are working, what's not?"