Pay-TV powerhouse Astro now reaches 56% of TV households in Malaysia, supplementing its core DTH offering with free services and new delivery platforms, while continuing to invest in original channels and content.

“We have done the hygiene and platform factors, underpinned by our strong linear proposition,” said Astro CEO Rohana Rozhan, speaking at this year's Asia Pacific Pay-TV Operators Summit (APOS), organized by Media Partners Asia, publisher of Media Business Asia.

“Going forward, we must build and complement that with the right content, the right IP, and the economics to get from 56% to hopefully 100% of Malaysia’s TV households,” she declared.

Of Astro’s 56% household reach, 50% are paying customers, while 6% access Astro’s free satellite service Njoi, which makes most of its money from advertising. Rohana pondered further adjustments to Astro’s commercial model to extend that reach further.

“We know we can do it, but what is the right cost of acquiring the next customer, and what are the economic returns we expect from it?” she said. “How much of the remaining 44% is pay, free and prepaid?”

Astro leveraged prior investments in content and satellite infrastructure to launch Njoi, making it an almost zero-cost proposition, Rohana said.

The push to become platform-agnostic has also taken the operator into less straightforward territory however, partnering three telcos – Maxis, Time and TM – to offer broadband as well as IPTV to households unable or unwilling to take DTH.

“At Astro, a good 90% of employees are control freaks, so it is difficult for us to collaborate with others,” Rohana said.

“If you think that within an organization it’s tough to break silos and make divisions work together, it’s much tougher when you have three different big brands.”

While aligning interests and priorities has been difficult, these tie-ups provide VOD and over-the-top content delivery in addition to broadband, shoring up subscriber and revenue growth. Rohana is determined to push through.

“It’s very logical to take broadband from us, but execution has been more difficult,” she said. “Having said that, we will execute against it and make it work.”

Mobile quality control

Rohana also wants to make Astro the top local website in Malaysia by the end of the year. That could mean further collaboration to boost the appeal of Astro On-the Go, a streaming and on-demand offering aimed at non-subscribers as well as existing customers.

“The reality is we are responsible for the viewing experience, and frankly the viewing experience for a customer also requires the right bandwidth,” Rohana said.

“One of the things impacting take-up is the affordability of data plans. We need to work with mobile companies to come up with compelling data plans for consumers.”

New customer segments – individuals in addition to households, and occasional customers as well as year-round subscribers – are creating a more fluid mix of business models.

At the same time, executives must still service top-end customers, who will continue to subscribe to bundled packs.

New capacity from the to-be launched Measat-3b satellite will provide Astro, which already has 17 transponders, with 18 more (eight in the first year, then six, then four).

This will help shore up the premium offering with HD and VOD services, as well as more vernacular content.

Content And Scale

The operator is already a major content producer and creator as well as aggregator and distributor, Rohana noted.

Mounting scale is opening up opportunities to ramp up production beyond news and sports, which are good for ratings but have little value in a library, as well as regional distribution.

Rohana wants to build on Astro’s successful Malay, Hokkien and Islamic religious productions.

At the same time, distributing Astro’s content outside Malaysia helps amortize expenses, while building incremental revenue from channel and library sales.

The goal is continued double-digit growth, driven by increases in household penetration as well as Arpu and adex growth.

“Whilst we are going to get into the mass market, it’s very important for us to move up the value chain and be relevant to the top 30% of our existing customers, because by far they are the high-Arpu customers,” Rohana said.

“You can only do that if you keep on investing. Hopefully, we will invest by getting scale and driving down costs per unit," she continued.

"Getting scale outside Malaysia is also important, so you will see more and more, both in terms of monetization of content as well as collaboration in the production of content. There are other opportunities we are looking to explore.”