2014 trends in pay TV industry in South Asia

By : |December 27, 2013 0

BEIJING, CHINA: High hopes are pinned on the South Asia region and particularly India, as we see the huge drive in digitalisation in India, and the expected revenues that are projected for the region. The rise of the middle class in the region also means that pay TV, in its various forms is increasingly becoming an option for consumers in the region.

Digital TV Research estimates that pay TV revenues in Asia Pacific will grow by $2.1 billion to $33.9 billion paving the way for the region’s satellite service operators to continue posting significant growth.

Coupled with a rapid digitalisation of cable TV, Asia Pacific will also see penetration increase from 44 percent in 2012 to 90 percent in 2018, or up by 440 million homes between 2012 and 2018. A report by Emkay shows that out of the above digital penetration in the region, 55 million are on DTH and 85mn more on digital cable will come from India alone.

Going forward in 2014, challenges are abound, and pay TV operators are expected to tackle this dynamic industry in 2014. Here are my top five predictions:

More operators and consumers from South Asia will jump onto the OTT bandwagon
2013 saw content owners become more active in the OTT market, having previously only provided content to operators. Learning from the success of content owners such as HBO and MLB in America, 2014 will see a range of content owners step in the broadcast market and offer their content direct to consumers that not only allows them to sell premium subscription packages but also navigate the geographical and regulatory barriers often posed by licensing.

As mobile usage, app and services continue to develop in Asia Pacific, we also predict that more operators and consumers from Asia will jump onto the OTT bandwagon. 2012’s UN-based World Summit Award mobile saw eight wins from mobile apps from Asia with China amongst top three ranked nations. With more apps and services coming out of Asia, OTT players would be on the lookout for a strategy to stay relevant in the mobile messaging space.

Pay-Per-Click consumption will heat up, and for consumers, the line will blur between traditional pay TV services and OTT
Content consumption was all about the consumer experience in 2013 and it will continue into 2014 as consumption becomes more and more about the individual and their needs. As it is often difficult to subscribe to one service that can satisfy all consumer needs, the consumer will start to cherry pick the content, select the device he or she will consume the content on and will navigate on discovery and recommendations from others.

As such, OTT will morph into mainstream TV delivery and consumers will be decreasingly aware of the medium over which their content is delivered, leading to a pay-per-click approach.

The pay-per-click approach is not as straightforward for operators however, and to meet these demands, 2014 will see operators invest more in aggregating content from all sources into one offering, through a subscription model.

We would expect to see a subscription model develop that is similar to that of Spotify – where consumers have the option of an “all-you-can-eat” package with advertising (or a premium package where they can get all the content ad-free). Crucially though, the aggregator must have a system in place to deal with the licensing rights attached to the content.

2014 will see an evolution in multi-screen devices
For multi-screen, 2013 broke new ground with the introduction of low-cost OTT set top boxes (STBs) from the likes of Sky and Viaplay, Android tablets at the lower end of the market such as Tesco’s HUDL, and the introduction of dongles like Google’s Chromecast.

Technology such as Chromecast has brought IP streaming to the doorstep of traditional Pay TV operators – in 2014, we will see this rapidly transform the main screen into an OTT device at a reduced price for consumers, giving people wider access to content on demand.

Similarly, the launch of PS4 and the new Xbox One is driving a change in the set-up of the living room entertainment experience. These devices will not take viewers away from the main screen, but it does mean that pay TV operators need to be integrated on these devices in order to retain their subscribers. We can also expect to see UltraHD content come onto the market and with it, a rethinking of ways to deliver new levels of premium content that are attractive to users.

New entrants continue to edge out traditional broadcasters and drastically change consumer viewing habits
2013 saw a number of shocks to the broadcasting industry, particularly in the field of live sports where BT announced an exclusive £897 million deal to broadcast live Champions League and Europa League match for three years from 2015. These new entrants have understood the value of premium content and will continue to buy up rights in 2014 to compete with traditional operators.

Not only impacting the broadcast industry, this move will cause consumers to change their viewing behaviours, moving from a one-stop-shop to a marketplace mindset and shopping around for the best content available. This new marketplace will cause rights owners and operators to become more competitive in offering content to consumers. Cricket may just be that driver in India.

2014: Year of IPTV streaming piracy
Broadcast piracy has long been a serious threat to content owners, but 2014 is the year we will see IPTV streaming piracy overtake techniques such as card sharing to become the number one piracy threat to the industry. Driven largely by viewer demand for live sports, we predict that these sophisticated pirates will package content (by language) to appeal to local audiences and remove consumption barriers often put in place by geographical restrictions and release windows.

2014 will also be the year that we see content owners employ some of the latest and most sophisticated anti-piracy techniques. Broadcasters and content owners will also refocus their attention on lobbying efforts to improve global legislative frameworks to address this problem.

As we tackle the challenges that we will face in 2014, it is important to understand that content is king and the root to all challenges lies in providing consumers the content they desire in a secure and profitable manner for operators. Despite the adverse changes that are expected, we have an interesting year to look forward to in this dynamic region, which is key to helping pay TV operators propel.

The author is Country Manager India, Head South Asia, Irdeto.

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