TM unfazed by increasing VOD competition

  • Expects more OTT players to enter the market
  • Says its quality delivery of content a key advantage
TM unfazed by increasing VOD competition

DESPITE the increasing competition in the video-on-demand (VOD) space, fixed-line operator Telekom Malaysia Bhd (TM) believes that it has what it takes to stay competitive with its HyppTV Internet Protocol Television (IPTV) service.
 
“In years to come, we will definitely see more over the top (OTT) players coming in,” its executive vice president Jeremy Kung said after the launch of the HyppTV Everywhere mobile app service with Digi Telecommunications Sdn Bhd in Petaling Jaya recently.
 
“We can’t stop this. It will continue to happen,” he added.
 
In the collaboration between TM and Digi, Digi customers will have access to HyppTV’s content on their mobile devices, on-the-go. They can subscribe to the packages or channels that they want, and these purchases will be recorded on their Digi bills.
 
While the big-time VOD services such as Netflix, Direct TV and Dish Network’s Sling TV are not available in Malaysia, the VOD space is by no means empty.
 
HyppTV is directly and indirectly competing against conventional players like the Media Prima Group which owns a few terrestrial TV channels, and Astro Malaysia Holdings Bhd, the country’s largest pay-TV operator.
 
And soon, HyppTV will also be competing against the Catcha Group’s iflix, which is promising a huge selection of international and domestic movies and television series, “all for less than the price of a pirated DVD,” according to its website.
 
A pirated DVD can cost about RM10 (US$2.75) or less in Malaysia. iflix has yet to announce when its services will be officially launched.
 
The iflix announcement comes in the wake of a major initiative by Singapore Telecommunications Ltd (Singtel), Sony Pictures Television and Warner Bros. Entertainment to offer their Hooq OTT video services across selected Asian markets that Singtel is present in.
 
Not an easy game

TM unfazed by increasing VOD competition

Meanwhile, Kung (pic, above) said that the VOD space is not an easy business to venture into. “It’s not going to be a stroll on the park, because content rights are not cheap.”
 
This is one of the reasons why TM decided to work with Digi to make HyppTV channels available to the latter’s customers.
 
Digi’s total subscriber base currently is more than 11 million, of which 49% are using smart devices – a figure which is certainly attractive to TM.
 
If only 10% of Digi’s smartphone users sign up for HyppTV packages, TM could stand to gain more than 500,000 new eyeballs, close to the total residential customers of TM’s own UniFi high-speed broadband service.
 
Based on TM’s fourth quarter 2014 numbers, the company has some 604,000 UniFi residential customers. Those who sign up for UniFi are also the most likely to have access to HyppTV as it is bundled together with the broadband access service.
 
Of course, the 604,000 is only a rough estimation of how big TM’s HyppTV subscriber base can be, as the service is not only available to UniFi customers.
 
The IPTV service is also available for its Streamyx customers [those using 4Mbps and above]. Streamyx, which currently has over 1.2 million customers, offers fixed broadband packages starting at 1Mbps.
 
“We want to be able to continue to monetise, so … we are on TV, on smart devices, on TM’s network … and now, on Dig’s network,” said Kung.
 
While TM does not reveal exact HyppTV numbers, one thing is certain: It has helped the telecommunications giant grow its revenue.
 
During the fourth quarter 2014, the average revenue per user (ARPU) for its UniFi services was RM192 (US$53), a 3.8% increase compared with RM185 (US$51) in the same quarter a year ago. TM attributed its higher ARPU to upselling and HyppTV content.
 
Content is king, so’s delivery
 
While admitting that this is a business highly dependent on good content, Kung said that the quality of the service and the delivery of the content will also play a crucial role.
 
“You need to ensure that you are able to deliver the content without affecting the user experience,” he said.
 
This is also where he believes TM will have an edge against new players.
 
“Our advantage is still our bundled services. By bundling with UniFi or Streamyx, we can ensure that we are able to deliver the content quality. We can only ensure the quality when the delivery is on our network,” he argued.
 
Related Stories:
 
HyppTV Everywhere partnership with Digi not exclusive: TM
 
HyppTV beginning to make a splash for TM
 
Patrick Grove’s South-East Asian gamble on VOD
 
Singtel, Sony Pictures and Warner Bros to roll out Netflix-type service
 
 
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