NAGRA: APAC Pay-TV Evolution for Next-Gen Content Delivery

Shifts in consumer habits, the rise of content piracy, plus a raft of technological innovations have forced providers to revamp their strategies as they plan for a new generation of content delivery.

In the latest Pay-TV Innovation Forum, providers highlighted a number of future-proofing investments in the region. These included a continuing steady roll-out of IP-connected set-top boxes (provided by 72 percent of providers in 2017, up from 66 percent in 2016), PVRs (63 percent, up from 56 percent), standalone OTT services (28 percent, up from 23 percent), and new adjacent services such as advanced advertising and Smart Home solutions (offered by 27 percent, up from 16 percent).

But with these developments in mind, there are two key areas providers in the region should dedicate extra focus to. The first is fighting piracy.

Although not a new phenomenon, new technologies have better enabled more advanced forms of piracy, mainly streaming piracy. As a result, the industry must work harder than ever to produce and deploy effective tools to prevent and shut down illicit operations.To limit illegal access to programming, operators must work with content owners to take actions in watermarking, monitoring, tracking and stopping the distribution of illegal content. There should also be industry-wide initiatives that bring together pay-TV operators, ISPs, content owners and industry associations to work with regulators and governments to take further action.

As Mike Kerr, Managing Director, Asia, beIN Asia Pacific, notes, “It is very hard to compete against free. Levels of piracy are growing, but the industry is slowly catching up.”

He adds, “the technology that is enabling people to pirate content is improving, but so is the technology that will enable the industry to track pirates down and stop them. There is a lag in fighting piracy in terms of technology and legal tools, but I think there is a lot of progress. There are some encouraging signs from markets like the UK, the US and Australia and we’ve also seen successful initiatives against piracy in Asian countries, such as Thailand.”

Ultimately, collaboration is key. All parties concerned must invest and work together to protect their collective interests. Mike Kerr continues, “I think that all parties involved in the video delivery chain have a vested interest in cutting down piracy. There is always an economic argument that if piracy is left unchecked, the whole value chain would fall apart.”

“This is the key incentive for the industry to make sure we are using the most advanced technology and pushing the boundaries of the legal system to the extent that we are able to deal with this threat appropriately.”

As the TV and video industry evolves in the region, with more appetite for international sports and movies and series franchises – along with strong interest in new, local, quality content – rights owners and distributors must also find intelligent new ways to package and price content. All the while, they must ensure a superior user experience to outcompete convenient illicit offerings.

The second key area providers in the APAC region should dedicate focus to is the consumer and diversified product portfolios.

With these, providers can develop new packages and offerings that appeal to changing consumer tastes and different budgets. These could include skinny bundles, personalised offerings, standalone OTT services.

For Koby Zontag of PCCW Global, the international operating division of HKT and Hong Kong’s leading telco, the key to the success of pay-TV service providers will be their content proposition, multiscreen services and new forms of monetisation.

“Service providers will focus a lot of their attention on offering great content, so we should see more original and exclusive content in the market and stronger partnerships between content owners and pay-TV service providers,” he says.

“Multiscreen TV everywhere services will soon become part of the most basic pay-TV service offering. Commercially, I see a big opportunity to bring more premium content, particularly sports, to consumers, allowing them to, say, watch football finals on the go”, he continues.

“The key challenge will be monetising these TV everywhere services, but there are various ways to overcome it, such as tiered pricing based on the number of supported devices or higher reliance on advertising revenue.”

Overall, there is a strong call to action across the pay-TV industry in Asia-Pacific to respond to the growing challenges around piracy and lower-cost OTT offerings. Operators and content owners need to be innovative in how they transform their technology and business models to respond to these pressures.

The Pay-TV Innovation Forum’s research highlights that service providers not only recognise the problems from content pirates but want to take action in limiting illegal access to premium content. Only then can they maintain revenue and ensure quality content continues to be created.

By collaborating with vendors to improve anti-piracy measures (as Mike Kerr suggests, preserving the whole value chain and every party’s vested interests), delivering a superior user experience and leveraging data analytics, operators can be more agile and adapt to the rapidly-changing landscape.

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