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Friday, 28 October 2011

Which player can steal more eyeballs in pay-TV market?

Friday Reflections - By B.K. Sidhu

PAY TV there has been some failures in the past.

Mega TV, FineTV and MiTV never made it big. In fact, some just closed shop after a few months of ambitious screening.

Running a pay-TV business requires deep pockets, content that appeals, low pricing and wide reach. However, repetitive programming irks and the station must be very mindful that consumer behaviour is constantly changing, so they need to adapt to change.

The Internet has finally cracked the door to our living rooms and that by itself has brought a change in consumer behaviour.

That has posed a new challenge for traditional broadcasters, pay-TV operators and the likes.

But by the second quarter of 2012, digital cable TV will come knocking on our living room doors with entertainment and education programming. Internet and interactive functions will be a feature and the promoters are looking at “reasonable pricing'' and “wide reach'' as their strategy.

Nilamas Corp Bhd, a company owned by some high ranking ex-army personnel, has the licence to bring digital cable TV here.

I have no clue what the “reasonable pricing” would be, but it should be a lot less than the current offerings and it should come with a lot more varied content, or else it cannot be termed “reasonable''.

Going by Wikipedia, digital cable is a generic term for any type of cable TV using digital video compression or distribution. Nilamas wants to use fibre optic to link the last mile to homes for picture perfect.

Currently, we have satellite pay-TV operated by Astro, IPTV (Internet protocol TV) offered by Telekom Malaysia Bhd (TM) and RedTone International Bhd's DeTV. There are several free-to-air channels now and these analogue networks will migrate to digital terrestrial television broadcasting (DTTB) by 2015.

Astro has also entered the IPTV space to protect its turf. It has over three million subscribers and offers 150 channels.

TM rides on its high-speed broadband to offer Hypp TV. It has 184,000 UniFi users of which 80% are viewers of the IPTV.

Maxis Bhd is also in the entertainment game and had some months ago launched its Maxis Home services. Though a disappointing launch then, its recent teaser ads are generating interest as it seems to have something for everyone in the family. It intends to launch IPTV pretty soon.

Celcom Axiata is silently working on a strategy to be part of the big-screen offering while DiGi.Com Bhd is still focused on small-screen entertainment.

YTL Communications Sdn Bhd is the other player hoping to ride it big in the entertainment scene. It will offer hybrid TV services over a wireless platform by the end of this year with partner, US-based Sezmi Corp.

Incidentally, YTL Communications is also one of the two potential contenders for the DTTB contract. The other is Puncak Semangat Sdn Bhd which teamed up with New Zealand's Kordia for expertise as well as to train people on the digital migration.

In a nutshell, the entertainment scene via our idiot box should get competitive by mid next year, provided, of course, if Nilamas keeps to its launch date.

At the moment, the players decide on the rates and content and there is virtually no competition. Some consumers are constantly looking for cheaper options, flexible packages and attractive programming and those that can offer them what they want will get their eyeballs.

But let's not forget that the Net is a huge source of content and a lot of people prefer free downloads. The likes of Google TV is also a potential threat that can steal the eyeballs away.

So while the fight for eyeballs should get intense and the incumbents will not give up without a fight, the threats are aplenty out there.

The biggest threat would be the inability to reach out to the next generation of consumers who want everything in their living rooms as well as while they are on the go, and a lot of them are using personal computers as their home entertainment hub.

Deputy news editor B.K. Sidhu believes switching between web and TV should be seamless.