Vernacular content success has changed the TV landscape in Malaysia and Astro's COO Henry Tan thinks his channel partners should do more for Astro's customers.

Speaking at the ContentAsia Summit in Singapore, Tan highlighted Astro’s investments in vernacular programming focused on education and underserved dialects.

Yet, the main message was that Astro’s partners must look to reinvest into their international brands, further push localization and reconsider negotiating positions regarding rights, exclusivity, windowing and guaranteed payments.

Tan argued vernacular content and an improved viewing experience will grow Astro’s base and with it, the revenue potential for its partners.

At the end of July 2013, Astro had 3.67 million customers in Malaysia, comprising 3.36 million pay-TV subscribers and 314,000 free Njoi users.

While Astro has invested in its own unique content to drive audience share, it cannot afford to risk the danger of becoming a “dumb platform if our partners do not provide long-term value for our customers.”

Rights and windows

First among Tan’s concerns is exclusivity. “We cannot have someone say to us we are exclusive in this space and non-exclusive in another because this destroys value for our customers” he said.

Astro is willing to accommodate both approaches, but not both at once.

Similarly, Tan recounted the frustration at being told rights for new platforms for previously purchased content were not included and are either non-exclusive or yet to be sold.

Another concern is the windows currently offered to Astro for international content. “Some of our partners bring us content two weeks after it has run in the US,” Tan said, “but frankly, for our customers, it’s just not good enough.”

The reality of piracy means Astro customers will not pay for international content in a two-week-old window, when they can get it for free within 48-hours of the US, said Tan.

Tan said that the Astro First on-demand platform was intended for Hollywood content, but when deals could not be secured at agreeable terms, Astro populated it with local movies. Three years after its launch, Tan said that 40% of Astro’s subscribers have added the service.

Double dipping and leveraging Njoi

With a nod to the recent confrontation over subscriber fees between CBS and Time Warner Cable in the US, Tan indicated that channel partners could not negotiate to increase rates and subscriber volumes at the same time – it's “double-dipping.”

Tan also drew attention to the proliferation of identical content across multiple channels, suggesting Astro’s customers view this as “diluting the offering.”

The Astro COO’s final point of contention is guaranteed payments, pointing out that in-house producers whose content flops have budgets cut or are let go. Poor-performing international content, on the other hand, still receives a guaranteed payment.

Tan suggested that Astro judge the quality of the content and anything not deemed sufficiently high would be placed on Astro’s free Njoi service. Njoi, reached 314,000 homes at the end of July 2013, splits ad revenue between Astro and the content owner.

“Customers can vote with their wallets,” Tan concluded. “If they choose not to pay us, we both lose.”

Astro has also negotiated free contracts with linear channels in a pack, where the content owner receives a fee for every subscriber who selects the pack.

“In a true partnership, we want smart partners so we can leverage each others’ strengths,” said Tan.