Make-or-break time for MyTV and DTTV

  • Reveals rates it plans to charge broadcasters and content owners
  • To launch 30 channels initially, 80 channels by end-2019
Make-or-break time for MyTV and DTTV
THE next three years will be a make-or-break period for MyTV Broadcasting Sdn Bhd as it faces the triple challenge of filling up capacity, educating consumers, and building up its ecosystem.
 
The company, which was awarded the licence to operate the infrastructure and network facilities for digital terrestrial television (DTTV) in Malaysia, is expected to launch its services in June.
 
MyTV plans to introduce 30 channels initially, followed by another 30 channels over the next two years. By the end of 2019, it will have a total 80 channels on its platform, according to the company.
 
It is allocating RM2.5 billion (US$690 million) in operating expenditure (opex) and RM2 billion (US$552 million) in capital expenditure (capex) over the next 15 years, or approximately RM300 million (US$83 million) a year for both opex and capex combined.
 
The company told Digital News Asia (DNA) that it would be charging RM12 million (US$3.3 million) a year (per standard definition channel) to broadcasters for a 24-hour slot, and RM500,000 (US$138,000) per channel a year for non-interactive radio.
 
Additionally, content owners that want to have their own channels can also opt for an ad hoc package where they will be charged RM2,400 (US$663) an hour (for a minimum of six-hour slot).
 
The fees – which include services like the maintenance of transmitters; rentals of sites; spare parts and others – exclude interactive services such as video-on-demand and live voting that MyTV also provides.
 
“Basically, broadcasters will only need to pay RM12 million per standard definition channel, and they don’t have to worry about the other things,” chief commercial officer Haniza Ros Nasaruddin told DNA in Petaling Jaya recently.
 
She described the rates MyTV is charging broadcasters as “reasonable” as they are “significantly lower” than what they normally pay.
 
“For incumbent broadcasters, they can expect significant cost savings – we estimate that the cost of maintaining a channel can be up to RM17 million,” she said, as opposed to the RM12 million they would pay MyTV.

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Not quite ‘easy money’

Make-or-break time for MyTV and DTTV

On the surface, it would seem that it should be a walk in the park for MyTV to become profitable and sustainable in the long term, as it could be looking at an annual revenue of up to RM960 million (approximately US$265 million) when it launches all 80 channels (RM12 million x 80 channels).
 
Even in its initial phase with 30 channels, if it can fill up 15 channels with broadcasters and the remaining 15 with ad hoc content owners, it would be able to generate RM390 million (US$108 million) in turnover. That itself is sufficient to cover its average RM300 million in capex and opex.
 
However, the DTTV game is not so simple, argued Haniza (pic). “Let's not forget, we only have seven free-to-air channels right now. It will be a challenge even to just fill up 30 channels in our initial phase.
 
To fill up capacity (channels), MyTV needs to be realistic and not to be too dependent on incumbent broadcasters, she acknowledged.
 
Currently, MyTV is talking to many content owners, business owners and brands, to try and convince them to launch their own channels on its platform.
 
“One can now have his or her own channel for as low as RM14,440 a day (RM2,400 per hour x six hours). At such a rate, it is very possible for content owners to monetise it,” she said.
 
Currently, a 30-second TV commercial during prime time costs at least RM10,000 per slot. [RM1 = US$0.28]
 
DTTV: A game changer

The introduction of digital terrestrial television services is expected to transform Malaysia’s entire broadcasting landscape.

 
“This is because now markets can be verticals – you can have free-to-air channels that are focused on different target markets and genres. The concept of prime-time is also expected to change,” said Haniza.
 
In fact, the traditional mind-set of a ‘TV channel owner’ will also be changed, as businesses and brand owners can use DTTV as a platform to become channel owners.
 
“For example, if you are a travel and hospitality group, you can use the channel as a platform to introduce your various services in the form of mini-TV series, short movies, or others. You can run the campaign for a few months, and then you can be out of the radar,” she said.
 
Besides broadcasters, TV viewers’ experience will also be significantly changed. With DTTV, channel owners can offer interactive features: For example, viewers may be able to vote for their favourite actor when watching a movie; purchase items; or even download movies or videos on demand.
 
“In the past, it was just a one-way experience. Now, with DTTV, channel owners can engage with their viewers better. Pproducers can get viewers to vote on their favourite actors so that they can decide on whom to hire for the next movie,” Haniza ventured.
 
“This will eventually create a better viewing experience.”
 
Progress and plans
Make-or-break time for MyTV and DTTV
So far, MyTV has tied-up with Telekom Malaysia Bhd (TM), the country’s largest fixed-line operator, which would see MyTV building DTTV transmitters at 60 TM sites. With these 60 sites, it will be able to offer its services to 85% of the population by the end of this year.
 
It will then build additional sites so that it can cover 98% of the population by the end of next year.
 
“To get from 95% to 98% is very difficult because you are going to more remote areas – erecting towers in such areas is expensive,” Haniza noted.
 
MyTV will first launch its DTTV services in the east coast of Peninsular Malaysia, followed by East Malaysia, then the northern, southern and central regions.
 
“By the end of this year, we will cover all the key regions,” said Haniza.
 
It is also in the midst of finalising contracts for various jobs it is sub-contracting. “In total, there are 17 packages, and these will be awarded in stages,” she said.
 
On its RM2-billion capex, Haniza said that a bulk of the money will be used to buy transmitters, as well as ‘gap fillers’ so that its DTTV transmissions can reach 98% coverage, while the balance will be spent on setting up its Digital Multimedia Broadcasting Hub, call centres, customer interaction centres, and facilities.
 
It will also put a lot of effort into creating the ecosystem.
 
“For example, when you watch a movie, you would be able to buy the related toys with a press of the button. For that to happen, we need to tie up with various merchants.
 
“I’m not saying that this is something that we are heading towards, but it is a possibility,” said Haniza.
 
She said that the purchase of videos and movies on demand, and other items via DTTV set-top boxes, will be conducted via a prepaid mechanism.
 
“This allows TV owners to control their spending on additional items on TV,” she said. “We will also ensure that viewers can easily top up their account by tying up with various merchants.”
 
On the ground to create awareness
Make-or-break time for MyTV and DTTV
In order for the entire DTTV venture to be successful, MyTV needs to create awareness on two fronts: Consumers (viewership) and broadcasters.
 
It is banking on consumers quickly adopting the interactivity element. With more engaged viewers, channel owners would be in a position to increase their revenue. It also offers additional income streams, rather than just advertising.
 
“We will be going to the ground. We have identified 148 districts in Malaysia, and we will be going to each of these districts to educate and create awareness,” said Haniza.
 
“We will also need to create awareness amongst potential broadcasters, content and business owners, and brands, on the various ways they can monetise on DTTV,” she added.
 
Digital terrestrial television and its transformation effect on the broadcast landscape is also very much in line with the nation’s Digital Malaysia programme. The top-line of the programme is to transform Malaysia into a fully developed ‘digital economy’ by 2020.
 
National ICT custodian Multimedia Development Corporation (MDeC) is the lead agency overseeing Digital Malaysia, and it has identified three strategic thrusts to do so. Among them is getting Malaysians to become producers, rather than mere consumers, of digital technology and services.
 
Digital Malaysia also aims to get more Malaysian businesses and content creators to adopt digital technologies to not only enhance their business, but to take it regional and even global.
 
MyTV’s services can be expected to help grow one of the five ICT sub-sectors identified under Digital Malaysia: Content and media.
 
Meanwhile, MyTV is organising a one-day event on Feb 10 dubbed Planet Digital: The New Frontier, as part of its efforts to provide a better insight on the DTTV play in Malaysia, and regionally.
 
The event, to be held at the Intercontinental KL, will feature speakers and panellists such as Altel Holdings Sdn Bhd group chief executive officer Nik Abdul Aziz; Nielsen Malaysia executive director Benjamin Ting; Bloomberg TV Malaysia chief executive officer Michael Chan; Freeview TV New Zealand general manager Sam Irvine; and Going Digital New Zealand’s former national manager Greg Harford.
 
DNA founder and chief executive officer Karamjit Singh will be moderating one of the three panel discussions at the event.
 
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