The Pay-TV Innovation Forum is a global research programme for senior pay-TV and content executives, developed by NAGRA and MTM, and designed to catalyse growth and innovation across the global TV industry, at a time of tremendous change and disruption.
As part of the programme, we are publishing a series of interviews with leading TV industry executives from around the world to explore their views, perspectives and experiences of innovation. In this interview, Anurag Dahiya, Head of Content & Ad Sales at Singtel shares his views on the evolving consumer demand for pay-TV services, new service provider strategies, the changing relationships between content owners and distribution platforms, and the impact of piracy.
Thinking of Singtel’s pay-TV strategy business, what are the priorities you see for the business?
We are a challenger brand in pay-TV, having entered the market 11 years ago. We’ve seen steep growth in subscribers over the last decade and currently account for about half of the pay-TV market in Singapore. However, the market is much more mature now, with cord cutting now a real phenomenon. Our current focus is twofold. First, it is to ensure that the traditional pay-TV business can thrive in the future by reorienting and delivering services in multiscreen environments, improving the user experience and features. Second, it is to grow OTT services. We’re looking to become the OTT content curator and aggregator of choice for our customers. We see ourselves as a super-aggregator. We now have a video platform called CAST, and have established partnerships with a number of OTT video distribution businesses to package and distribute their services to consumers.
Can you tell us more about the CAST platform and how it supports your strategy?
We launched CAST two years ago to offer a combination of content we curate ourselves, and content we acquired through our linear pay-TV relationships. We also increasingly use it to house a number of new partnerships with OTT service providers, such as HOOQ, Fox+ and Viu. In the future, CAST could become a virtual MVPD or a super-aggregation platform. It is also a subscription gateway – users can manage their video content subscriptions through CAST, and we provide an easy-to-use authentication service for our content partners. Consumers like the idea of having a one-stop shop for billing but they’d also like a one-stop shop for consuming content. That’s what we are gradually moving towards, though aggregating diverse third party services in a seamless environment is still complicated.
How is consumer demand for pay-TV services evolving?
We see the market as consisting of two main segments of consumers. The first is the traditional pay-TV consumers – people who value a variety of video content and convenience enough to pay a premium for services that span both linear and on-demand content. We feel that linear TV is not dead: Consumers still like linear TV and will continue to want it in the future, especially in genres like sports and news, and when they are looking for lean-back experiences and serendipitous discovery. However, linear TV has to evolve – you can’t expect consumers to always tune in on the scheduled time, they need to be able to restart the show, go back into a previous episode if they like it. This customer segment continues to represent a significant part of the market. More importantly, they are used to paying for content. The other segment is the cord-cutters and cord-nevers. They are a demographically distinct segment – usually younger, and in some cases living in households that have never had pay-TV. We feel there is a significant opportunity to introduce them to paid video content, although this might be a lower ARPU market.
How do business models and commercial agreements need to evolve to support these new services?
We’re trying to make it simpler for our customers to subscribe to the content that matters to them. As part of that, we’re moving towards partnerships rather than becoming curators like Netflix. For example, if someone wants to pay a heavy premium for sports rights, we’re not going to compete with them; we’d rather offer ourselves to them as a platform for distribution. At the same time, commercial agreements need to be rethought to some extent. Platforms are moving towards becoming true partners to content owners by changing the way they share risks of customer churn and acquisition. They’re moving towards more revenue-sharing and cost per subscriber models, where both the platform and content owner are incentivised to jointly drive subscriptions. At a time when content owners absolutely need partners that have strong go-to-market power, they do not want to hamper platforms with large upfront fixed costs, which might discourage platforms from adding their content. At the same time, the traditional model of content bundling between the content owner and the distribution platform is evolving as it is becoming less feasible to bundle at the content owner level. However, consumers still value the convenience and simplicity of a bundle. That’s something that content owners and distribution platforms need to think carefully about.
How is content piracy impacting pay-TV businesses?
I see piracy as my number one competitor. I’m not competing with OTT services like Netflix. In Singapore, people don’t cord-cut because of OTT services, they do it so they can get on to a cheap Android set-top box with illegally-sourced content. That is a really big threat to the entire TV and video ecosystem. These pirate set-top boxes have been around for many years but have become ubiquitous in the last 18-24 months in particular. With piracy, the situation in Singapore is often seen as being somewhat counter-intuitive: Typically, Singapore is seen as a strict enforcer of the law, but it has been a bit of an exception when it comes to content piracy, because the legal framework has not been very clear about the use of pirate boxes. The need for this to evolve is generally acknowledged. As an industry we are still behind the curve, although we have seen the launch of some new pan-industry initiatives, such as CASBAA’s Coalition Against Piracy, to counter the spread of illicit streaming devices. There’s a whole multi-national pirate ecosystem that we need to fight against and this will require a more dedicated and collaborative effort in terms of legal enforcement, PR, and consumer education.