The Pay-TV Innovation Forum is a new global research programme for senior pay-TV executives, developed by NAGRA and designed to explore and catalyse innovation across the pay-TV industry, at a time of unprecedented change.
As part of the programme, we are publishing a series of interviews with leading pay-TV industry executives from around the world to explore their views, perspectives and experiences of innovation in the pay-TV industry. In this interview, Jimmy Chen, CEO of Taiwan Broadband Communications Co. (TBC) shares his views on the evolution of the Taiwanese pay-TV market, the growing threat of content piracy, the need for pay-TV companies to develop high-speed broadband offerings in order to support a diverse portfolio of products and services.
Disclaimer: All of the following views relate to the Taiwanese pay-TV industry trends in general and are not specific to TBC’s business and operations.
How would you describe the pay-TV market in Taiwan today? What are the key trends and developments shaping the market?
Most consumers in Taiwan still enjoy the experience provided by traditional pay-TV services. However, we’re seeing additional growth in OTT viewing, which is the biggest change for regional pay-TV service providers today. The younger generation prefers watching OTT shows, such as Chinese and Korean dramas, and want to access content through their mobile devices while on the move, not just at home. Unfortunately, a lot of this OTT consumption today is illegal: actually, illegal IP-streaming is the biggest competitor to the pay-TV industry today. Legitimate OTT services are not a serious competitor to traditional pay-TV providers yet, but as the industry resolves the piracy issue, we could start feeling the impact of legitimate services. As a result, we need to act now to respond to challenges presented by both illegal and legal video services.
How significant is the threat of content piracy in Taiwan?
As is the case in other countries in the region, there is no accurate estimate for the actual scale of piracy in Taiwan. However, there is a general sense that it may have a significant impact on the local content industry, if the government does not introduce specific rules to discourage consumers from using such services. Taiwanese consumers usually have access to high-speed fixed broadband at affordable prices as well as unlimited ‘all-you-can-eat’ 4G/wireless broadband services. As a result, using illegal OTT services via IP-streaming boxes and mobile apps generally does not result in additional costs as seen by consumers.
How is the pay-TV industry fighting the growing threat of content piracy?
Currently we are working with various industry associations to monitor consumer trends, including reviewing online discussions about pirated content on public forums and collecting data on piracy-related activities. We can then share this information with content providers, so that they can investigate these activities further, involving the respective government authorities and taking legal action as required. However, when it comes to pirate site-blocking, Taiwan currently does not have a comprehensive legal framework in place to protect our local content industry.
If you think about the next five years, which areas are the most commercially attractive or strategically important for Taiwanese pay-TV operators to focus on?
For cable operators in Taiwan, high-speed broadband will continue to be an important aspect of our future growth opportunities. Also, it is the foundation to support the launch of new services. Similarly to other pay-TV operators in the region, Taiwanese operators generally work with various new OTT service providers, such as Netflix and iQiyi among others, to offer value-added video services. In general, we believe that providing these additional OTT services at affordable prices will help pay-TV companies to appeal to younger consumers and thereby reduce the usage of pirated services.
Looking further into the future, it will be important for pay-TV providers to develop new revenue streams by offering new services, including connectivity solutions, home entertainment, mobile services, and Smart Home solutions, effectively providing a home gateway for consumers on which they can use these services. For example, Smart Home solutions will present an interesting opportunity for network operators going forward, particularly in the area of elderly care at home. As society ages, we’ll see a growing demand for these types of services. Network providers have both the technical expertise and customer care capabilities to deliver these elderly care services.
Pay-TV will also be a very important element in this portfolio of complementary products and services and we will focus on developing multiscreen TV Everywhere services, introducing advanced set-top box features, and innovating with content pricing and packaging.
Many pay-TV providers believe that data and analytics is becoming increasingly important – do you see that having a significant impact on your business?
In general, data and analytics will be useful to transform the way we do business and to better serve our customers. We believe that with users’ consent, pay-TV operators will be able use their data to deliver personalised content recommendations and offer more relevant services.
How will the pay-TV market in Taiwan develop over the next five years?
Similarly to other markets in the region, the pay-TV industry in Taiwan will have new challenges and growth opportunities ahead. For example, pay-TV providers in Taiwan may have to review the current basic tier channel line-up, which currently includes over 100 channels, as some consumers may prefer to subscribe to fewer channels.
Looking further ahead, broadband services will likely become more important, having to support new Smart Home and other value-added services. To be successful, these providers will have to ensure that they control the home gateway in as many households as possible, enabling them to offer a wide range of products and services to their customers.