Asian telecommunication and broadcast companies have reached the crossroads, as video content can now be viewed across multiple screens, from television sets to computers to smartphones, thanks to the Internet.
“New formats, from YouTube channels to services such as Netflix are changing the way content is consumed,” says Stéphane Le Dreau, general manager for Southeast Asia of Nagra, the digital TV division of Kudelski SA, a Swiss company.
Headquartered in Cheseaux-sur-Lausanne in Switzerland, the Kudelski Group provides digital security and convergent media solutions for the delivery of digital and interactive content. Its unit Nagra provides content providers and digital TV operators with secure, open and integrated platforms and applications over broadcast, broadband and mobile platforms.
Le Dreau, a French national, is in charge of establishing Nagra’s presence across Southeast Asia. “I am personally devoted to engage and meet pay-TV operators to help them understand the differentiators and value add that a worldwide leader such as Nagra can provide,” he says.
Le Dreau says the pay-TV market has faced unprecedented change in recent years because of the rise of over-the-top streaming solutions such as Netflix, which shifted viewing patterns and the proliferation of cloud technologies which transformed the entertainment industry.
“The TV industry is now witnessing the biggest shift in media habits since the dawn of television. Customers are demanding more personalization and flexibility as they consume different formats of content, across a number of platforms,” Le Dreau says in an email interview.
Le Dreau says the other side of the coin is that this also presents a real opportunity for pay-TV service providers to build more innovative and sustainable business models to meet the changing needs of the consumers.
“Pay-TV operators, particularly in the region, are at the crossroads of exciting new opportunities to reach consumers on any screen, anytime and anywhere, as well as engage in a more interactive viewer relationship,” Le Dreau says.
Le Dreau says the same is true in the Philippines, which is catching up with technology developments in other countries. “With advancements in technology and development of infrastructure that are already taking place, the Philippines is well poised to close the gap with more advanced markets,” he says.
Nagra’s customers in the region include StarHub in Singapore, BGCTV in China, TBC, KBro and CNS in Taiwan, Linknet in Indonesia, Skylife in Korea and the Vietnam Satellite Digital Television.
“The Kudelski Group is present in the Philippines, providing content protection solutions to satellite service provider Cignal TV through its subsidiary Conax,” says Le Dreau.
Le Dreau says pay television continues to grow, exceeding a billion subscribers and $200 billion in global industry revenue. “It is widely expected to approach $250 billion in global industry revenues by 2020. The market in Asia Pacific is also growing, with pay-TV penetration expected to rise from 61.1 percent in 2015 to 69.2 percent in 2021, adding 127 million subscribers,” he says.
He says the evolution of the television industry provides new opportunities for service providers in Asia Pacific. “However, it also presents new challenges such as managing content protection and ensuring the seamless delivery of content, with a superior user experience, to meet consumers’ expectations. Operators need to be aware of these challenges and have a strategy in place to address them,” he says, adding that Nagra has a broad portfolio of solutions to help service providers overcome these barriers and enable the next-generation of television services for consumers.
He says Nagra, in partnership with research consultancy MTM, launched earlier this year the Pay-TV Innovation Forum―a new global research program for senior pay-TV executives, with the mission of exploring the innovations and strategies that will drive the next phase of growth for pay-TV operators, over-the-top content providers and adjacent markets.
A recently published report shows that the Asia Pacific industry is fragmented, with strong differences between markets in terms of economic wealth, demographics, geography, penetration of broadband and pay-TV and content preferences. As a result, there is a divide in growth and technology adoption between advanced markets and emerging markets in the region.
“Emerging Asian markets such as the Philippines are facing challenges with low broadband penetration, yet this also means great opportunities for growth. As the market is in early stages of development, service providers can offer broadband and pay-TV products to a broader customer base, justifying larger next-generation investments,” says Le Dreau.
“With improvements in broadband quality and availability, operators will also have the chance to provide consumers access to a wider range of content and TV services, driving take-up. On the other hand, although advanced Asian markets such as Singapore, South Korea and Japan have a more highly developed pay-TV industry and higher penetration of broadband, the very same reason makes them more prone to business model disruptions and competition from new entrants,” he says.
Le Dreau says this is where Nagra comes in. Nagra has recently teamed up with StarHub, Singapore’s leading pay-TV operator, to launch the Netflix subscription video on demand service on its Fibre TV platform. He says this is an eexample of how service providers can offer the best of two worlds by blending Internet TV services into a pay-TV offering.
“As consumers continue to demand quality content that can be accessed over multiple devices, anywhere they are, pay-TV service providers will remain focused on strengthening and differentiating their core pay-TV and OTT propositions. Service providers in emerging markets are expected to focus on delivering value-added services such as HD video quality to meet the evolving demands of consumers,” he says.
“With growing device proliferation and usage, multiscreen TV Everywhere services will also form an important part of the value proposition. In addition to the above, service providers will work towards ensuring a seamless video experience across all consumer devices and making content discovery as easy as possible, with IP-based, cloud and data technologies playing an important part in enabling these next-generation features,” says Le Dreau.
At the same time, Le Dreau says telecom companies are well placed to deliver digital solutions as they can leverage their existing networks and infrastructure to offer video content to customers. “Our solutions address the entire digital media ecosystem, offering a full end-to-end solution for telecom providers enabling the delivery and protection of content over IP fixed and wireless networks. Our focus is on bringing premium entertainment to every screen and helping service providers deliver innovation in their markets,” he says.
Nagra explores more opportunities in the Philippine market, which remains in the early stage of development with lower broadband and pay-TV penetration compared to more advanced markets such as Singapore and Japan. “However, customers in Philippines are embracing both traditional and digital platforms as access points. According to Nielsen, traditional TV viewing continues to enjoy its share of eyeballs while, at the same time, digital video viewership among Filipinos has grown six fold,” Le Dreau says.
“We are continuously working to expand our footprint in the region and emerging markets like the Philippines provide tremendous opportunities for growth and development, especially as consumers’ appetite for content across both traditional and digital platforms remains strong,” he says.
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