The COVID-19 outbreak is driving expanded service offerings in East Asia, a region with an estimated 419.8 million multichannel subscribers as of year-end 2019.
In response to the sudden hit in the first wave of the pandemic, IPTV services in China and South Korea, which accounted for 2019 penetration rates of 36.4% and 78.3%, respectively, quickly evolved to meet the needs of the communities. Other multichannel operators, particularly those in less affected markets — Hong Kong, Taiwan and Japan — rolled out various promotional plans. Subscribers are being given free access to services that may have been of less interest before the onset of the pandemic.
When the virus sparked the shutdown of schools in China, China Telecom Corp. Ltd. and China Unicom (Hong Kong) Ltd. set up new channels with educational content tailored for different student groups, from nursery school to senior high school. For livestreaming lessons, students are able to submit questions online. The channels and educational content are offered free of charge to existing subscribers.
Following school closures in South Korea, the country's three telcos were reported to have expanded their educational and parenting content libraries, while Korea Telecom and SK Broadband offer free access to such content. It is a good opportunity for operators to showcase their educational content libraries and related services. The three South Korean telcos have been selling their artificial intelligence-integrated interactive kids service as a value-added service to their IPTV packages. Kagan forecasts that sales of the kids services will rise during school closures, and parents are likely to keep the service if they find it useful.
In South Korea, due to the surge in coronavirus cases related to church clusters, KT Corp. is offering free usage of its "Olleh tv CUG (Community User Group)" platform tentatively until the end of June. The platform allows users to manage and deliver their own channels through KT's IPTV set-top box. Organizations, such as churches, can broadcast their services through specified channels. Subscribers can access their organizations' broadcast by simply pressing the channel number on their remote control. According to KT, approximately 2 million subscribers are accessing livestreaming services provided by more than 190 churches as of early March.
With the rising focus on transforming IPTV services into part of the smart-home experience, the outbreak serves as a ground for experimentation and innovation. One innovation of China Telecom is the access to 24-hour voluntary virtual doctor services through its IPTV STB. Although the telcos are not currently charging for most of these services, the more important implication is that subscribers currently receiving these services free of charge will get used to their value and may want to keep them permanently, even if they are charged for them later. The value-added services not only set IPTV apart from other multichannel platforms and over-the-top services but could also boost revenue growth that aligns well with the telcos' expansion into the smart home business.
In general, multichannel operators in the East Asia region offer free viewing of certain channels and video-on-demand content to different groups of people. KT installed its IPTV set-top boxes in all rooms of the quarantine center designated for Korean residents returning from Wuhan, China. In Taiwan, sister cable MSOs kbro Co. Ltd. and Twm Broadband provide free access to their cable TV and VOD services for people that are subject to 14-day home quarantine. With Hong Kong's Now TV, the IPTV service of PCCW Ltd., subscribers are entitled to one month of free service to the operator's OTT service, branded nowE. In addition to free access to the VOD library, subscribers of Jupiter Telecommunications Co. Ltd., the dominant cable MSO in Japan, can view premium news channels including CNNj and BBC World News free of charge.
Global Multichannel is a service of Kagan, a media market research group within S&P Global Market Intelligence's TMT offering.