- Research finds that pay-TV providers in Asia-Pacific see significant challenges from content piracy and low-cost OTT services – a perfect storm
- Transformation will be driven by innovation and the development of new business models
- Operators see diversified offerings and a more collaborative, unified approach to piracy as key priorities to deliver growth
CHESEAUX, Switzerland – July 3, 2017 – NAGRA, a Kudelski Group (SIX:KUD.S) company and the world's leading independent provider of content protection and multiscreen television solutions, in partnership with MTM, a leading international research and strategy consultancy, today revealed the latest findings from the Pay-TV Innovation Forum 2017 that looks into the Asia-Pacific pay-TV market. The global research programme examines the state of pay-TV innovations and strategies that will drive the next phase of growth for the industry.
Service providers and content owners from the region participating in the Forum in May 2017, agreed that the Asia-Pacific pay-TV industry is entering a transitional period during which operators will need to adapt their business models and technology platforms in order to thrive in the changing environment. New offerings will have to reflect changing consumer demand for cheaper and more personalised content packages, including OTT services, to effectively expand the range of services at different price points. Delivery infrastructure and technology platforms across APAC will also become much more IP-based, with content being increasingly delivered via both fixed-line and mobile broadband networks. This need for change is being driven both by the persistent threat of content piracy and the increasing popularity of OTT services that are using aggressive pricing strategies to acquire customers.
Despite these challenges, pay-TV providers in Asia Pacific are investing in the future – continuing the steady roll-out of IP-connected set-top boxes (provided by 72% of providers in 2017, up from 66% in 2016), PVRs (63%, up from 56%), standalone OTT services (28%, up from 23%), and new adjacent services such as advanced advertising and Smart Home solutions (offered by 27%, up from 16%).
Industry experts highlight two urgent investment priorities that will help service providers to navigate the transforming video and TV services market:
Concerted approach to tackling content piracy: to limit illegal access to content, operators are calling for content owners to take their own independent actions to monitor, track and stop the distribution of illegal content, and for industry strategies that would bring together pay-TV operators, ISPs, content owners and industry associations to work with regulators and governments to take further legal action.
Development of more consumer-focused and diversified product portfolios by embracing new business models, operators can develop new packages and offerings that appeal to changing consumer tastes at a wider range of price points, including skinny bundles, personalised offerings, seamless multiscreen TV Everywhere services and smart home solutions. Operators also cited potential opportunities for growth through new business-to-business services, including harnessing data with new analytics tools to offer enriched data services and support targeted advertising.
“The pay-TV industry in Asia Pacific is going through a challenging, transitional period. Traditional pay-TV revenues in many advanced Asian markets are under pressure, while emerging markets are growing, but delivering low ARPUs. The industry is being increasingly disrupted by content piracy, especially around live sports, and impacted by low-cost OTT offerings, making it harder for pay-TV companies to invest with confidence,” said Jon Watts, Managing Partner, MTM. “Pay-TV service providers in Asia-Pacific need to take stronger action against piracy to secure their future, while maintaining investment in new services and innovation.”
“There is a strong call to action across the pay-TV industry in Asia-Pacific to respond to these growing challenges. Operators and content owners need to be innovative in how they transform their technology and business models to respond to these pressures,” said Simon Trudelle, Senior Director, Product Marketing, NAGRA. “The Forum’s research highlights that service providers not only recognise the problems they face from content pirates, but want to see actions taken limiting illegal access to premium content to maintain revenue and ensure quality content continues to be created. By working in partnership with vendors, operators can be more agile and better adapt to the fast changing landscape.”
The Pay-TV Innovation Forum explores the next generation business and technology developments of pay-TV operators around the world to uncover and understand what will drive the next phase of growth in the industry. Additional visuals and statistics on the Asia-Pacific research can be found in NAGRA’s "Pay TV Innovation Forum 2017: Exploring the Next Generation of Growth Opportunities for pay-TV Operators in APAC" presentation. For more information on the Pay-TV Innovation Forum, please visit the Pay-TV Innovation Forum website.