Felix To, CEO of recently relaunched pay-TV business TVB Network Vision, is banking on content differentiation to steer the loss-making service, owned by Hong Kong broadcaster TVB, towards a goal of operating profits within three years. 

With just 200,000 subscribers, TVB Network Vision – a technological and strategic reboot of earlier incarnation TVB Pay Vision – is overshadowed by larger rivals i-Cable and Now TV, which have more than 1 million subscribers each.

To is focusing on higher revenues per user rather than reach, weighting TVB Network Vision’s portfolio towards niche content and Asian fare, including Korean, Japanese and Chinese content, sometimes within weeks of their original air-date, as well as 13 channels produced by TVB.

“We are trying to identify the content providers with the most aggressive, well-defined mission and work with them,” To tells Media Business Asia.

Content partners can also plug into a VOD service that TVB is building to be released by the end of 2014, To adds. 

The VOD offering will be converted to a subscription model, with the transactional data used to determine the subscription price.

TVB has already released a free catch-up (MyTV) and paid VOD (GoTV) service to leverage its extensive library.

ORIGINAL APPEAL

Once the new strategy gains traction, To wants to tap parent TVB’s production expertize for original programming, which could also be monetized through the broadcaster’s international division, TVBI. The first step would be two, 10-episode dramas, requiring at least HK$30 million (US$3.9 million) investment.

“Two years later, with solid subscribers and public trust in the product, then we will go after [original content],” To says. “TVB is a content company.” 

Investment in local sports is another medium-term priority, but remains out of range for the moment. “The problem with these events is you need to buy a pretty huge amount before you reach a threshold where it becomes marketable and it can command a subscription,” To explains.

However, TVB Network Vision will broadcast 42 of the 64 2014 Fifa World Cup matches secured by TVB. In addition to traditional match commentary, TVB Network Vision will offer a parallel parental-locked channel mimicking the pub experience, with hosts free to drink and express themselves more freely.

A FRESH START

A renewed pay-TV platform would be a boon to TVB, which has been feeling pressure on its traditional revenue streams.

To feels TVB Network Vision is ready, having resolved many of the barriers that hindered the service in the past.

Rain fade disrupted satellite signals in a territory with numerous typhoons, while placing receivers with Hong Kong’s numerous residential owners’ associations created logistical headaches.

These technical problems have been resolved by a long-term contract with local telco Hutchison to deliver HD linear content via fiber and VOD via broadband to Hutchison’s 1.6 million homes passed.

Channel capacity on the previous platform was limited to 46 channels. Now To can offer up to 62, including 20 in HD.

TVB Network Vision also retains a legacy cross-carriage agreement with IPTV service Now TV, signed when TVB was one of Now TV’s early content providers.

A reinvigorated TVB pay-TV offering heightens potential competition, but To believes neither company wishes to alienate the other.

“We are in a dichotomy,” he muses. “It is equally possible for the two companies to be each other’s worst foe or their best partner.”

It may be possible to cross sell each other’s channels for example, echoing a model used by some Korean pay-TV companies, To speculates. 

“We have to somehow let the market and competition tell us what we should do.”