Pay TV is experiencing a decline in the Asia-Pacific region, but operators are also evolving their services, industry executives said at the Asia Video Summit 2024 held March 13–14 in Hong Kong.
In the Asia-Pacific region, the penetration of pay TV is decreasing as viewership shifts online. Pay TV penetration in the region is projected to drop to 60.6% in 2028 from 66.6% in 2023, with a five-year compound annual growth rate of negative 1.9%, according to S&P Global Market Intelligence Kagan data.
Pay TV providers are adapting their products to stem the subscription loss. This evolution includes bundling existing pay TV packs with online streaming content and transitioning traditional TV platforms to the internet.
Bundling over-the-top content with pay TV packs has become a popular trend. For example, Malaysia's direct-to-home operator, Astro Malaysia Holdings Bhd., includes Disney+ Hotstar and HBO GO in its direct-to-home packs. "We want to provide diversity to retain the customers and therefore we ask for bundles," said Agnes Rozario, director of content at Astro.
Bundled packs can attract customers for all parties as "people still prefer aggregated content," said Avi Himatsinghani, founder and CEO of Rewind Networks Pte Ltd. "Consumers don't care about [whether the content is on] linear or OTT platforms; they just want to turn on the TV and watch the hit content we provide to them," the executive explained during a panel discussion.
OTT streamers and content providers benefit from bundling plans as the "direct-to-viewers" feature of pay TV remains important as a marketing portal, according to the panelists. "Bundling is a tool to bring [OTT] product in front of consumers," said Anil Malhotra, co-founder and chief marketing officer of Bango PLC.
Phil Hardman, senior vice president and general manager at BBC Studios Ltd.'s Asia unit, agreed and said pay TV platforms are the windows for BBC content. "There are audiences that do not necessarily come to [our online platform] specifically for BBC brand, but they don't mind watching our content [on the TV], and we want to reach more such audience through [distributing on] pay TV."
Indeed, operators have struck abundant bundling or partnership deals over the past years. Kagan's survey data shows that pay TV operators or telcos inked 449 partnership deals with online streaming platforms as of February compared to 433 deals by the end of October 2022. Please see details about the types of partnerships and operators' strategies here.
In addition to the bundling strategy, pay TV providers launched online products to meet the new demand of customers.
Derek Choi, managing director of consumer marketing and pay TV at Hong Kong Telecommunications (HKT) Ltd., suggested that pay TV services need to "penetrate to [the] next generation." To cater to the preferences of younger generations who tend to consume content on mobile devices, HKT's Now TV launched the mobile video streaming app Now Player-Now TV in January. This new mobile pay TV service offers lower-priced packages and has led to higher market penetration for Now TV, according to Choi.
Similarly, South Korean telco LG U+ offers the Uplus Mobile TV app, which provides both linear and subscription video on demand content for mobile devices. Thai pay TV player True Visions Public Co. Ltd rebranded its mobile app as True ID in previous years and included OTT and linear packs in its offerings.
TrueVisions' True ID has expanded beyond traditional media platforms with its online effort, Winradit Kolasastraseni, president of digital media at True Digital Group, said during a panel discussion. The Thai pay TV operator has shifted its key performance indicator from viewership to engagement time to reflect the evolution of the portal, according to Kolasastraseni.
As pay TV players work to evolve their services, the definition of pay TV has potentially shifted from "pay TV" to "pay for TV," Hardman of BBC Studios Asia said. The summit also touched on topics such as the profitability of online streaming platforms, content monetization and piracy issues.
Global Multichannel is a regular feature from S&P Global Market Intelligence Kagan. Clients can view the full research here.