TVAPlus: New platforms, such as IPTV and Over-The-Top (OTT) are definitely gaining strength in certain territories, while in others there is no action at all. What are your thoughts on the short-term development of these content delivery technologies and how will it affect future TV business?
The one thing about OTT, is that it is happening. The interesting thing, and the scary thing, for different stakeholders, is that it is pulling in different directions and how it is going to pan out over the next 12, 24 or 36 months is difficult to tell. But in essence, there are two camps currently – the incumbent players and the new entrants.
Now the incumbent players have all to lose with OTT. When I say incumbent players, who are they? They are the Pay-TV operators. Those are the main incumbents. Subscription-based providers.
The ones shaking up the market, are the new entrants; small time operators. There are many that are small time operators and there are some really big guns. But I think the ones that can make a difference in OTT are the content owners. Content owners can go to subscribers directly, over the internet, cutting out PayTV operators from the equation. That’s a major, major change in how things are done currently.
TVAPlus: So really, OTT is about giving a leg up to the content makers and smaller television players, in addition to what they provide to linear and traditional broadcasters?
Absolutely. And the content providers need to convince the PayTV operators that they can provide OTT service of sorts, on their own. And I think that’s kind of where it stands at the moment. Because in a way the PayTV operators are saying to content providers who are going into OTT, “We can do OTT ourselves. We can put up your content. Let us do all the distribution”. That’s kind of what the battle is about.
But I think the rate at which it’s happening is going to be slower than what the hype suggests. Why do I say that? OTT needs good internet – it needs really good broadband speed. Countries like Singapore and Hong Kong have really good broadband speed, and Korea. These are also the markets which are quite mature. And people know how to consume TV in these markets.
TVAPlus: MediaCorp is venturing into the OTT space. It was originally planned for November but is now expected to launch in the first quarter of 2012. How will it fare as an alternative entertainment source you think?
It all comes down to what kind of content MediaCorp want to provide.
TVAPlus: Do they have to be very different you think? Or do they have to be a line with current programming?
I think the biggest thing with OTT and with the TV service going forward, is that operators are going to have to think very carefully about who they are targeting. So this whole thing about segmentation is going to become very, very important. For instance, in the mobile business, segmentation has been very important – carving up different tariffs and subscription plans, packaging them with a device, or without a device, the type of device. I think OTT services, especially in mature markets, needs to think about how they are going to target professionals. What proposition is there going to be for couples, for the single woman, for ageing parents, for teens, for graduates?
So that’s what new players like MediaCorp and Malaysia’s Tonton have to think about. Existing players like Singtel, BCCW, you know these guys are also thinking about OTT as part of their offering. They’re thinking of a multiscreen approach. So how do you then offer what you haven’t got in here, how are you going to use the different screens, what do you bundle for TV and for online? It’s easier said than done.
The viewing experience has to be different. For instance, if you are watching Formula One, you can see that they have the lean back experience on the big screen. And on the small screen, if it comes on a tablet, then you can have all of the apps and share a game with someone else while watching the game. It’s combining the app world with the old TV world. TV is no longer a single screen thing. It’s going to get eaten away, unless you offer a multiscreen approach. Also remember price point. Some ask “Why am I paying $40 a month for that when I could be paying $10 for content I always watch?”
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