Broadcaster aiming for individuals within the household
Pay-by-the-hour content consumption a possibility
ASTRO, with an eye to its eventual listing, is starting to strengthen its value proposition. Addressing the biggest challenge it faces, the multi-screen viewing habits of younger audiences, it has come up with Astro On-The-Go (AOTG) service.
The premise is that if you can’t draw the eyeballs to your main screen, the TV, you deliver your content to the screens where the eyeballs are at.
Today, that means the mobile phone, the tablet and laptops. According to recent data from Nielsen, just under 30% of Malaysians own smartphones but with a rapid trajectory predicted in the next few years. Meanwhile data from GfK reveals that tablet sales for 2011 in Malaysia stood at an impressive RM118 million (US$37.4 million). While GfK declined to reveal the breakdown of iOS versus Android platforms, it is widely assumed that at least 80% of the Malaysian tablet market is Apple based.
The data tells us mobility as a lifestyle is here. So, when your business model is dependant on a static device, the TV, you should start getting worried.
In a way, parallels can be drawn to the challenge Astro faces with the challenge mobile operators face where their traditional voice dependant business model has been disrupted by consumer preference for data based services.
Nothing wrong with that, accept for the fact that now, it is no longer just you who can deliver those services to the customer. Indeed it is telling that on Telekom Malaysia Bhd’s IPTV service, YouTube is the most widely watched channel. In a way, UniFi – its high-speed broadband offering – has become a competitor to Astro.
If you were Astro, you would be a wee bit worried.
Hence this step towards evolving their business model by offering AOTG, which to listen to chief executive officer Datuk Rohana Rozhan, is also targeted at the younger set.
“AOTG satisfies the demands of the younger generation and is the perfect complement to their lifestyle choices. We aspire to grow our customer base by addressing the lifestyle needs of not only the household, but also the individuals within each home. Through AOTG and more innovative services to come, we believe we can be the customer’s choice for entertainment, education and information.”
With AOTG, all of a sudden, Astro’s potential market is not just the almost six million households in the country but now extends to each and every Malaysian.
That is what Rohana means by growing its customer base beyond households to individuals per home. Sweet. The bankers that win the right to manage Astro’s impending listing will have a field day churning out potential revenue.
But there is an even more interesting twist that Astro can apply to its AOTG service. It can start selling content to consumers by the hour or pay-per-use. Billing systems are advanced enough to do this. Astro just needs to get its content distributors to agree to try this bold experiment.
“They have massive leverage against content owners,” reckons an industry player. “They are the largest buyer of content in the region and thus can get content owners to experiment with new revenue models,” suggests the industry player who declined to be quoted.
Certainly this space is worth watching. The end of the three-month free viewing period will be a critical first step of market validation. Will consumers, specifically the younger crowd bite, or will Astro have to go back to the drawing board?
Meanwhile, Digital News Asia had a quick Q&A with an Astro spokesman.
DNA: Strategically, was the major impetus for this product introduction the fact that the younger generation prefers to watch video content on their mobile devices -- laptop, tablet or phone – therefore bypassing the TV?
Astro: AOTG has always been part of our strategic roadmap to continuously create value for our customers while at the same time, contribute towards our sustainable growth. It is part of our continuous effort to innovate and provide value propositions that fit into the lifestyle choices of every Malaysian.
The rise in technology brings about a truly digital lifestyle amongst Malaysians, which has resulted in individual preferences in the way one consumes media across a multitude of devices.
Changing times mean changing tastes. Malaysia has always been quick to adopt changing global trends and our young Internet generation has fully embraced mobile and broadband services. Obviously this presents a growing market for AOTG to tap into.
DNA: Will advertising be part of AOTG when it goes commercial? If yes, will there be different pricing to deliver ads via AOTG?
Astro: Ads on Astro channels will be also be available on the same channels on AOTG. This is good news for advertisers as their brands and products will reach an even bigger audience.
DNA: What is the business model for non-Astro customers?
Astro: AOTG is a new service, and we are only at the early stages of implementation. Over the next three months, we will allow all customers to preview this service before it becomes available on a commercial level.
This approach would allow us to get a better understanding of what they feel about the user interface, and to get to know their thoughts on how we can improve it further.
We will be continuing our enhancements on AOTG, and to find new ways to make this service simple, reliable, and easy to use. Ultimately, it is about making our content intuitively compelling.
We will share more information on AOTG for non-Astro customers nearer the launch date.
DNA: How much has this cost you to launch (the product/service cost not marketing or A&P)
Astro: We don’t publish specific numbers but Astro invests at the industry rate for new products and platform development.
DNA: To get this straight, AOTG is available to all subscribers during the free period but only to those with more than one decoder when it goes commercial. Why is this innovation available only to customers who have more than one decoder?
Astro: Customers of Astro Byond IPTV and/or who have more than one decoder will continue to have access to AOTG after the end of the free preview on Aug 31. AOTG is given to enhance the value proposition of being an Astro IPTV or multi-room customer.