I was impressed to see recent industry analyst figures stating that TV set penetration in the Asia Pacific region is set to pass 1 billion in 2011 and that Digital TV homes are forecasted to almost triple by 2015. There is no doubt that Asia offers huge opportunities and challenges across a rich tapestry of emerging, high growth and mature TV markets. Television within the Asia– Pacific region is also changing dramatically, moving away from a one–way analog service to become a connected and converged multi–screen, multi– media experience. For service providers and content owners, this creates many opportunities to differentiate their offering, growing market shares and redefining the multimedia and communications landscape as they strive to evolve to meet consumer demand. As a result, we are witnessing rapid infrastructure changes in the digital television market amongst our customers in over 20 countries throughout the region Despite the global macro– economic difficulties, during 2009 more than 35 million Asian homes upgraded from analog to digital TV. Also in the year, 26 million new homes subscribed to pay TV, comprising 14 million to cable, 9 million to DTH and 3 million to IPTV. Digital TV homes are forecasted to rise from the present 150m to 420m by 2015, which in turn will generate revenues of more than $40 billion. There are increasingly positive signs for digital TV in this region, with IPTV subscribers expected to grow by 25m over the next 5 years and the opportunity of digital upgrades on the agenda. (Informa 2010.) Broadband penetration is a key driver for growth within the Asian market, with many countries in the region leading the world in broadband households and internet speeds – in some cases up to 300 mb/s (Media Partners Asia, 2010). This connected environment is strong foundation for the interactive, high quality TV experience that consumers desire. In this highly dynamic media market, the Ericsson APAC TV team is enabling access to digital TV across cable, satellite, terrestrial, IPTV and broadband networks. As well as making possible the availability of more TV channels, better quality and more consumer choice, we’re helping to facilitate the introduction of new services such as HDTV, 3DTV, IPTV and on–demand entertainment. We are also providing the content management and back office systems that drive the creation, management and delivery of video across multiple platforms to multiple screens. According to Informa, by 2015 the Asia Pacific TV sector will have reached 100 percent digital penetration in Hong Kong, Singapore, Australia, and New Zealand, with South Korea, Japan, Taiwan, and Malaysia expected to have achieved a penetration rate of 70 percent or more. With a region of such high growth, the challenge of redefining the Asia–Pacific multimedia and communications landscape – consisting of both emerging and mature markets – provides Ericsson with a huge opportunity to expand its global reach and make the next moves in TV. By identifying the suitable areas for development within each country in the market, we recognize the most beneficiary solutions needed to make the ‘Individual TV Experience’ possible, and make it accessible for consumers. Here’s a snap shot of how we’re helping develop the TV market in three very different countries. The digital opportunity – Vietnam While Vietnam is a comparatively small market of just 2.1 million cable subscribers and just 200,000 DTH subscribers, the opportunities are immense as the nation focuses digitization as a means of entertainment, education and public information. Vietnam is an emerging economy, where 20 to 40 million or more individuals regularly watch TV (Unesco, 2010.) The country’s move towards digital TV is enabling people to be trained with important education and life skills. For example, Vietnam Multimedia Corporation Pay–TV model includes the BBC World Service – which teaches English and enables TV learning in Vietnam. In a country where more than half of the 85–million–strong population is under 30, Vietnam also offers promising pay–TV prospects. The next five years look set to see the uptake of HD, as well as the roll out of VOD libraries, offering Vietnamese viewers a more personalized service. Ericsson has a strong presence in Vietnam, working with a number of high profile customers, including VTC, to build digital TV offerings. HD is really taking off in Vietnam, with viewers in the country able to enjoy recent coverage of the 2010 World Cup in HD for the first time, and there are now ten HD channels on the VTC platform. We believe the next step in this journey is the shift to a more advanced digital TV service – a key area of focus for our team as we aim to bring fifteen years of digital TV expertise to help the emerging market, enabling Vietnamese broadcasters to deliver a converged digital TV future by fast–tracking to a multi–platform, multi–media connected offering that puts them in line with other countries within the Asia–Pacific region. With uptake of digital services getting stronger, revenue is currently generally via advertising and through phone votes on program (as well as subscriptions), and ARPU remains low. As a result, operators are looking to VOD and other advanced services. This is especially the case in cable and IPTV services. Pay–TV operators must differentiate themselves from free–to–air terrestrial channels in order to gain more market share. This means offering more choices and premium content for the consumers. Ericsson has systems currently in place with major operators, as well as the expertise and experience to launch advanced services in the immediate and long future. If we can get that right today, there is so much to build upon. Converging China Convergence is a key focus in China, as Internet and television become amalgamated. Cable TV in China is well established with just below 80 percent of TV market share (Media Partners Asia, 2010.) Mainland China had more than 44.5 million digital cable television users in 2008 (Media Partners Asia, 2010) and is an important market for Ericsson as we are engaged with operators across all platforms. China’s VOD landscape is growing at a fast pace as major video sharing sites like Youku, Tudou and 56 become popular in people’s daily digital lives, with large numbers of the Chinese audience watching their favorite TV show and movies on VOD. Issues of copyrights aside, the video–sharing business model has opened up a lucrative market for Chinese operators with user generated content being the latest growing trend on China’s Internet media market. China is somewhat unique for an emerging market because average pay–TV revenue per subscription is less than 5 percent of GDP per capita, an indicator that signals the average household can afford incremental spending on video–on–demand services. Pyramid Research (2008) estimated that the Chinese VOD market would grow vastly at 111 percent per year from 2008 to 2014. Providing large–scale VOD services is a challenge over the Internet, especially for consumer–base as large as that of China (China’s high performance broadband information network named 3Tnet) which makes it more complicated to provide high quality VOD services. Ericsson’s experience and expertise in delivering VOD systems to customers in the Asia–Pacific market is invaluable as we provide innovative on– demand solutions to bring the Individual TV Experience closer to consumers. In June this year, we announced that we are supplying Star Software Technology, a Chinese DTV solutions provider, with our OpenStream Digital Services Platform to enable cable VOD services for operators in the Hebei province of north China. This offers Chinese viewers greater choice and flexibility – enabling them to watch content whenever they want. We have provided VOD systems to many Chinese operators including Tianjin TEDA Cable who has expanded its cable TV offering into the growing VOD market. New broadband frontiers – Australia Australia has pioneered digital pay–TV and HD. Today, 30 percent of homes in the country subscribe to digital pay–TV, with the number set to rise to 37 percent by 2014 (Media Partners Asia, 2010.) Already nearly three–quarters of Australian homes have digital free–to–air TV, with penetration at 74 percent at the end of June according to figures from the government’s Digital Tracker Summary Report. With digital switchover due to be completed by mid 2012, the face of Australian free–to–air TV is set to change forever. This is why we believe that Australia has the opportunity to rapidly move to the next chapter, with a multi–screen, multi–platform connected future of on–demand, HD, 3D, IPTV, OTT (over the top) services. Ericsson’s team has been involved with the Australian TV market for almost fifteen years, and deployed the first DTV solutions with broadcasters such as ABC, Nine Network and SBS in the late 1990’s. These prestigious contracts were highly contested with the industry’s digital broadcasting vendors competing for the business and we are proud to have played a part in building the origins of digital terrestrial TV networks in Australia. Today, our compression head–ends are used for four of the country’s five national digital terrestrial networks, for high definition and standard definition services. Consumers are now looking for a high–quality TV experience, and this includes 3D TV and increased VOD services. Ericsson enabled the first broadcast of live sport in 3D on free–to–air television in May 2010, when Nine Network Australia broadcast the Harvey Norman State of Origin rugby league tournament live in 3D. We also provided video processing solutions that enabled fans of the three game series to experience the action like never before. We have also recently used our experience to provide Australian consumers with an innovative VOD service. Hybrid Television Services have deployed the CASPATM On–Demand service on TiVo®, in Australia and New Zealand to give users true on– demand entertainment alongside the free–to–air digital terrestrial TV services available via the TiVo media device. CASPA uses progressive download to enable true Video–on–Demand to the television via the broadband Internet and the TiVo media device. To enable this service Ericsson has deployed a complete suite of software solutions including WatchPoint® Content Management System (CMS), OpenStream® Digital Services Platform, Xport® Producer storage encoding platform and AdPoint® Advanced Advertising Platform. Certainly the future for Australia looks to be built on broadband. The planned National Broadband Network (NBN) will be a state– of–the–art Fibre to the Home (FTTH) network that will drive next generation opportunities for video over the internet (OTT) and IPTV within the country. As the Australian government’s planned rollout of a National Broadband Network takes shape, telecommunications and media companies are well positioned to benefit from increased access rates and more bandwidth for high quality TV services. We are proud to be involved with such a landmark project that introduces the ‘Individual TV experience’ to Australian consumers and changes the way that they watch television. As the Australian market moves to true convergence and high quality consumer experience, we believe that our experience and solutions will help drive next–generation TV experiences for Australians. The Future The Individual TV Experience will increase customer loyalty, attract new subscribers and grow revenues. Media Partners Asia, the Hong Kong–based research consultancy, forecast in April 2010 that pay–TV revenues in Asia–Pacific could almost double over the next five years to 60 billion dollars in 2015. China will continue to account for large growth in the Asia–Pacific pay–TV and broadband markets, with 395 million TV households reaching 95 per cent of 1.3 billion population. There were 163 million cable households, including 63 million digital households, by the end of 2009, according to the government regulator SARFT. Vietnam, where more than half of the 85–million–strong population is under 30, also offers good pay– TV prospects. Our strategy for growth at Ericsson is to help our customers in Asia to differentiate and develop new services by pioneering and expanding important consumer offerings such as HDTV, 3D TV and on– demand. The future for TV in the Asia–Pacific region is looking very positive and we’re looking forward to playing a central role in its development.
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