QUOTE(izwanikhsan @ Jun 2 2024, 09:36 AM)
A very long article from the EDGE about Astro -
https://theedgemalaysia.com/node/712282Wah, this article is very long winded. But from this "interview" ofthe Astro Group CEO,
Euan Smith, he reveals some of the important takeaways.
Astro StudiosBesides pay TV business, now there's "Astro Studios", where they now have a world-class integrated suite of broadcast production, post-production, and visual design services. This could potentially an option for international movie productions to get their works (partial or fully) done in Malaysia, hence new source of income for Astro.
QUOTE
Having said that, it remains to be seen how successful Astro Studios will be in showcasing Malaysia’s film-making and post-production talents, and how much revenue from the business can help make up for the slide in the traditional pay-TV subscription revenue, which is a problem faced by all satellite or cable pay-TV operators globally as more consumers favour streaming services such as Netflix and Disney+.
Hmm, okay.
Astro Pay TV businessThe numbers?
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While Astro has not provided a breakdown on its subscriber base since FY2018, back-of-the-envelope calculations show that its premium monthly subscription-paying customers likely peaked at about 3.52 million subscribers at end-April 2017 and made up less than half of its 5.71 million customers at end-April 2020 (1QFY2021).
According to our estimates, paid subscribers account for just under 2.2 million, or about 41%, of its 5.34 million total subscribers at end-January 2024, having lost a million paid subscribers in the past four years since end-January 2019 (see Chart 2).
Basically, today, the company has
more NJOI customers than Astro customers.
From there, you can imagine the obvious and undisputable trend of many Astro customers of either terminating the service or migrating to NJOI. It's been going on for years, and until today, it is still happening.
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“I’ve been here for four years. And pretty much since day one, we knew this was what we had to do. Four years later, we’ve been able to actually achieve it because of the long-term nature of some of the relationships we’ve had. So, as you start to drive the cost base down, you can start to offer more value, and you can then offer better pricing, which will be more attractive. If you go back two years, our floor price for the primary pack was RM60. Now you can get in at RM42. Why are we doing that? Because we think our job here, as we take costs out and re-engineer our content contract, is to provide more value to that tier … Almost half of these people are under 40. They all want the product, they all like the product. As we are able to get more value into the product at lower price points, we are seeing people gravitate back towards us.
For those who don't know, what he meant by RM42 (actual figure is RM41.99) is their current campaign for new online signs-up to the Primary Pack. Meaning, whoever that wishes to sign up Astro through Astro website, and they pick Primary Pack, the price would be RM41.99/month, then from the 25th month onwards, it will revert back to the original RM59.99/month price. You can read the campaign T&C
https://acm-cms-assets.eco.astro.com.my/acm...on-campaign.pdfExisting customers don't get to enjoy whatever "price reduction" offers, like this 30% off whatsoever.
Unique selling points today for Astro's sports content?QUOTE
Apart from broadcast rights for the English Premier League in Malaysia through the 2024/25 season, the Liverpool fan says Astro also invested in live rights to the Malaysian Football League (MFL) early last year that brought back Liga Malaysia to Astro TV screens. It also holds broadcast rights to other local sporting events like the Sepak Takraw League (STL) that was fully captured and broadcast by Astro Arena in 2023 with augmented reality enhancements. These are among the types of local content which Astro can enhance to capture the local audience and that it will put more resources into going forward.
“If you look at the other things that a pay-TV operator used to buy, Hollywood type of content from the big studios. One, they are all D2C [direct to consumers] now, so you have no differentiation. Two, they are all pirated like crazy … So, why would we pay top dollar for something arriving onshore free? So, you have to go to a model which says, ‘I’m happy to be non-exclusive and have it on the platform, but I’m not paying top dollar for that’,” says Smith.
“Now, what will I pay top dollar for? Our own local content because it’s really good, it’s driving engagements, it is driving viewing, it’s where we get all the buzz from … things like Projek: High Council [the No 1 On Demand show of all time, beating the likes of Hollywood titles such as Game of Thrones], things like KHUN:SA … a brilliant series … but we’ve had loads. The number one show of all time in Malaysia, All Stars Gegar Vaganza (ASGV) season 10, over eight million people watching [and] 8,000 people came to watch the final at Axiata Stadium [Bukit Jalil]. It’s not easily piratable, it’s local, we can control it, and it is what people want. So, we focus on that.”
The best example of D2C (direct-to-consumer) app from Astro offerings, will be Disney+ Hotstar. Others like beIN Sports Connect, Netflix, are somewhat considered also.
Astro chopped off headcounts last year...QUOTE
“We took 20% [headcount] in October [2023] because we had to get ourselves match fit. You cannot play in this market if you are carrying an awful lot of headcount and cost. It is all about digitisation and mechanisation.
The 20% headcount that he's referring to, is the Voluntary Separation Scheme (VSS) exercise, which I believe you guys have read it in the news last year.
Content, product and marketingQUOTE
There are really three things I want to spend money on: content, product and marketing. Content, because that is what keeps us alive; product, because that’s what gets the content in front of people, the box and the apps; and marketing, to make sure that everybody knows how amazing the stuff we’re making is, and what’s coming next, so they will continue to want to engage with us. Anything else is a ringgit spent that I don’t really need. So increasingly, we are trying to move more and more of our business to only looking at those three things,” says Smith.
“As we are driving the cost base down, we want to be building and making more of that content that is actually going to be of value to people. You’ll start to see shows or assets that used to be in the higher tier packs. We’re trying to move them down the tier packs to give people more value at the RM45 to RM50 price point. So that is the driver now, but it is taking time because of satellite TV companies’ legacy cost base — it’s just the nature of the business.”
He say Astro is driving the cost base down... But do you think your Astro subscription price did go down?
Perhaps your Astro subscription price did went down, likely because you called them and told them you want to terminate Astro, then they gave you retention offers
Don't want to rely too much on satellite?QUOTE
According to him, Astro’s 15-year commitment to the Measat-3a transponder capacity ends in July, but there are other satellite contracts which “go well into 2030” as satellite-related deals are usually long term.
“We’ll gradually reduce our commitments [to satellite] over time and be basically transmission agnostic. So, we’ll increase our speed into the IP world but satellite will be part of this company for a long time,” he says.
In fact, few months after Measat-3d were launched, Astro has completely abandoned Measat-3a satellite already, and focus only on Measat-3d and Measat-3b.
Also, Measat 3a satellite is going to be retired soon. The satellite was designed to be operational for 15 years, and it launched in 2009. So, times up already.
2 new streaming apps to be introduced?QUOTE
Smith lets on that two “big” third-party apps are likely to be added “in a couple of months” to bring the number of integrated streaming services to 15 from 13 currently.
I have been told that one of the 2 apps mentioned, would likely be
Amazon Prime.
If Astro no more sports content, means can say bye-bye to Astro? Very unlikely to happen...QUOTE
“We have a great distribution mechanism. Because we’re ubiquitous across the country, anybody coming in looking at any property and taking it away from us is going to have to think, ‘If I’m only direct-to-consumer, how do I actually get the same audience that Astro can command?’ And that’s going to be a concern when they’re thinking about bidding rights. But there are going to be people that will be thinking, well, I need to make a splash in the market. And when people want to come into markets, they tend to buy tent-pole content. Honestly, just try and have a go. We have a strong relationship with EPL (English Premier League), BWF (Badminton World Federation) … they are regularly telling us how much value we are driving for them, compared to some big regional players or global players, because we can go local. The beauty of a local player is we are on the ground all the time,” he says.
Now we got a clear answer on why Go Shop was ceased...QUOTE
Changing consumer preferences is also why Astro decided to close its TV shopping channels Go Shop in October 2023, which in the nine years from 2015 to 2023 was only profitable in FY2021 as it benefited from the surge during Covid-19 lockdowns, according to The Edge’s compilation of official releases.
“We were operating Go Shop on extremely thin margins. It was increasingly difficult to justify why we were in the business. It took a lot of management time and attention … and it just didn’t look like there was going to be a future because in every country in the world, people are migrating out of home shopping [on TV into live digital platforms]. We were not clear how it was going to add any value to shareholders or the business going forward,” says Smith.
Duh, Go Shop shouldn't even be there in the first place, because you are a pay TV provider.
It's good to see that Go Shop is gone for good.
ConclusionQUOTE
Nonetheless, Smith is confident in Astro’s strategy to maintain its core pay-TV customers while winning over those switching to streaming. “To a certain extent, it is a managed shift. The silver lining is that sooka is growing, Astro Fiber is growing and addressable advertising is growing. All the revenue businesses to which we know we need to bridge are all growing. They’re not growing as fast as I personally would like, but the good news is they are growing and sooka, in particular, has increased really strongly in the last six months.”
In simple words, he just want to tell you that everything in Astro is "growing", and absolutely nothing is "dropping".
But it's just that it is "growing" very
slowly.
Original URL: https://theedgemalaysia.com/node/712282
Backup: https://web.archive.org/web/20240604145839/...com/node/712282