Is Vietnamese Consumer Behavior Requiring Pay-TV Operators to Adopt a New Strategy?

Stephane Le Dreau, SVP & GM, Asia Pacific, NAGRA explores the topics on How are PayTV Platforms reinventing themselves in this age of transformation?

By Stephane Le Dreau, SVP & GM, Asia Pacific, NAGRA


One of the new forces to be reckoned with in the M&E industry is changing consumer behavior.  Swamped in recent years by a wave of new technology that allows the consumption of video pretty much anywhere, consumers are increasingly starting to define new patterns of usage and behavior.  This trend is causing established pay-TV operators to carefully consider their next strategic move.

For Vietnamese pay-TV operators this also means plotting their course against a changing distribution model.  Vietnam has decided not to follow the traditional route of analogue to digital to OTT distribution and instead miss out the digital terrestrial distribution phase and go direct to OTT.  Seen as a smart move of addressing consumer demand, this approach will accelerate the changes in consumer behavior and their appetite for subscription stacking of streaming services.

The analyst firm GlobalData estimates that household penetration of pay-TV subscriptions in Vietnam will decline from 35.4% in 2020 to 30.3% in 2024.  By anyone’s math, that’s a steep drop in a relatively short period of time and one that is likely to be occupying the minds of those in the boardroom.

For pay-TV operators, used to having a relatively long-term relationship with their subscribers fueled by datasets that drive retention, the explosion in streaming services – driven by lower barriers to entry for new entrants and the desire of some content owners to ‘go direct’ - is causing concern.

The one thing that pay-TV operators have always had with their subscribers is proximity and now that’s exactly what those offering popular direct-to-consumer services such as Netflix and HBO Go also now seek.  But does it put two organizations that for years have enjoyed a mutually beneficial relationship – one providing content and the other providing an audience for it – against each other or is there a middle-ground where both can still exist?

Step forward then, content aggregation.  For years, this has been the business of pay-TV operators, taking various content sources and bundling them in attractive propositions to consumers that are made available via set-top boxes and increasingly through streaming services such as FPT Play, Keeng Movies and OnTV. 

However, in 2021, content aggregation is now associated with the business of bundling multiple streaming services to consumers and optimizing the customer experience through tools such as deep linking and personalized recommendations.  Consumers can of course take individual streaming service subscriptions and do their own curation, but experience tells us they soon gravitate back to a more centralized approach.  The centralized hub needs to be provided by someone and in NAGRA’s experience, that someone is the pay-TV operator – especially if they are also providing the broadband or cellular networks that the streaming content is being consumed over.  NAGRA customer Claro Colombia has recently undergone this transformation with the aim of delivering on their #1 goal – customer satisfaction.  Offering not only an aggregated solution, but also added carrier billing for Netflix, they deliver additional value to those consumers who perhaps don’t have credit cards and can’t directly subscribe to Netflix.  This puts their brand front and center and moves them from a pay-TV operator to more of a digital entertainment hub.

So, is the Vietnamese consumer likely to behave in a similar way or do the pay-TV operators in Vietnam have another way to ensure they maintain their proximity to their subscribers?  What additional aspects need to be considered to ensure that churn-ready consumers have a pay-TV service that provides them exactly what they want, when they want it?  These questions and I’m sure many others will be the focus of our forthcoming Vietnam in View session on 8th September and I’m looking forward to having the discussion with colleagues from Viettel, US-ASEAN Business Council, AVIA and others.  Why not sign-up, join us and let us know what you think?

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