VIA SATELLITE: With customers viewing content in different ways, how is this impacting Astro’s strategy when bringing new products and services to customers? What was the key product/service launch of 2015?
Liew: Firstly, Malaysia has a very young population; 70 percent of our population is below the age of 40 years. What that actually means is that the majority of Malaysians are quick to embrace new technology. More than 50 percent of the population own tablets and smartphones. Also, more than 60 percent of people have access to mobile Internet. There is also close to 50 percent who have access to fixed broadband in their homes. So, the proliferation of smart devices along with greater access to the Internet had actually fueled the growth of online content consumption.
At Astro, we will exploit the full potential of all content distribution platforms to remain the content provider of choice for all Malaysians. Our role is to make sure we avail our content across as many platforms as possible, wherever consumers choose to view their preferred content so that we can capture an increasing share of consumer wallet and expand our addressable market by serving the content needs of both households and individuals. The launch of Go Shop in 2014 marks Astro’s foray into e-commerce. It is still in early days but we have had over 115,000 products ordered to date.
Ten new channels were launched last year and now Astro has a strong line-up of 170 channels, 21 TV On-Demand (TVOD) channels and 48 HD channels. To enhance our Premium customers’ viewing experience, Astro Plus, Astro’s first Subscription Video on Demand (SVOD) service was launched in Q3 last year and this will be an impetus for more households and individual consumers to connect their smart screens. Astro Plus pack offers more than 5,000 hours of catch-up Video on Demand (VOD), box series, and both local as well as award-winning Hollywood box office shows. Essentially, our customers can binge watch as much as they like across any chosen device at an affordable access fee. For our customers who prefer vernacular content, we have expanded the breadth of programs in genres such as comedy, sports, general entertainment and education, which had contributed to record-high viewership ratings on our signature local programs.
As we have been enhancing our Astro on the Go (AOTG) service offering with more exciting content now available on the go, 60 percent of our AOTG customers are affluent households who are now watching TV online via AOTG, aside from accessing our linear content via the set up box. Currently, 35 linear channels are offered on the go along with the best of local regional sports, news education and general entertainment available on catch up and live.
VIA SATELLITE: What is on Astro’s roadmap for 2015? What new innovations are you looking to bring to the market this year?
Liew: This year, we will deepen our e-commerce offering which will see us partnering with key affinity partners to make available more interesting entertainment services. Astro will also upgrade our payment platform capabilities to enable more payment options and to facilitate real time payment acceptance for on-shore and off-shore customers.
In response to the growing popularity of our AOTG service, we will also continue to invest in upgrading and enhancing it. Some of the key revamp and new functionalities to be introduced are: Complete refresh of our user interface for easier content discoverability, introduce a brand new feature in download to go, as well as add more personalization and discovery functionalities. The download to go feature will be well received as the cost of mobile and wireless broadband in Malaysia is still relatively expensive relative to other markets in Asia. Narrowing the divide between linear TV and on the go content is another priority of ours so that our customers can watch more on-demand content on the go. We will also be focused on winning mobile viewers and optimizing their content viewing experience.
VIA SATELLITE: What is your take on 4K? Is it “the next big thing” in terms of broadcasting? How do you assess the opportunity for a pay-TV provider such as Astro?
Liew: If you look at the Malaysian retail market, the cost for big televisions (around 55 inches) is now increasingly affordable, anywhere. from 2,500 to 5,000 Malaysian Ringgit. We believe 4K is not that far away and our view is that we will always embrace new technologies and platforms that will help drive TV viewership in this country. Having said that, we would only launch a 4K service commercially when adoption levels are higher making it more commercially viable. We have close working relationships with major TV Original Equipment Manufacturers (OEMs) and have a wide retail distribution reach, which allows us to keep close tabs on consumer trends and consumers’ receptivity to new technology. Live programming, such as sports, will particularly benefit from 4K as the viewing experience will heighten engagement with viewers, especially when second screens enhance their total content viewing experience.
VIA SATELLITE: Where is Astro with its HD strategy? How many HD channels do you now have?
Liew: Our HD offering has expanded and now stands at 48 channels, and three of these are TVOD. Plans are underway to launch seven new HD channels this year. We just announced two new Korean HD channels — channel OhK! from Turner and Channel M from FIC — which went live.
VIA SATELLITE: What are your demands for satellite capacity? Will you need to acquire more capacity over the next year?
Liew: To cater for our growth in the future, we have committed to taking on additional transponder capacity over the next five years. We will be doubling our capacity and will have sufficient capacity to launch 100 HD channels and 30 SD channels with the additional 18 transponders that we will take on over five years. Currently, we serve 63 percent of Malaysian households with 50 percent market reach for our pay-TV service.
VIA SATELLITE: What impact is OTT having in a market like Malaysia?
Liew: Astro has transitioned from originally a DTH platform service provider to a platform-agnostic business offering multi screen content access, enabling effective monetization of our content assets. Whilst DTH will remain the most cost effective content distribution platform, to fortify our market leadership position and to remain relevant to our discerning customers, we will always embrace and exploit new technologies to retain our loyal base of subscribers.
To neutralize the threats of OTT and keep our subscribers to our pay service, Astro intends to position AOTG as the OTT destination of choice for all Malaysians. In line with this, we will be continuously enhancing our customer value proposition and offer them more value and convenience: our strategic imperatives include extending the breadth of content, enhancing user experience to better serve our customers and to reduce the need for them to search for content from other Internet streaming media sites. With the democratization of content, customers can now easily procure desired content from other online services providers if their entertainment on demand needs aren’t catered for by Astro. We will focus on removing barriers to usage and push for parity of content between DTH and OTT content rights. Our development for OTT will be decoupled from and unbridled by STB limitations to ensure best in class experience.
To neutralize the threats of OTT and keep our subscribers to our pay service, Astro intends to position AOTG as the OTT destination of choice for all Malaysians.
Another important advantage, Astro has is in its content library over 50,000 hours of local IP. In Malaysia, we see that consumers place a premium on local and vernacular content.
VIA SATELLITE: Finally, what is the international opportunity for Astro?
Liew: At 63 percent of household penetration rate in Malaysia, we still believe there is headroom for growth as we aspire to service 84 percent of Malaysian households in five years. Organic growth opportunities include expanding beyond the shores of Malaysia and OTT offers us access to some of the fastest growing markets in Asia. We have more than 50,000 hours of local content that can be availed to viewers within the Asia region, as there are a lot of commonalities that we can leverage on with widely spoken common languages/dialects. So, there is a definitely an opportunity for international expansion that we can capitalize on. We have been exploring how we can build upon the success of our existing AOTG service and extend it to a larger captive audience within the region. VS