Disney's move to shut down channels another blow for pay-TV operators in Singapore, say analysts

SINGAPORE: Disney's transfer to close down a number of of its sports activities and film channels in Southeast Asia represents one other blow for pay-television operators in Singapore, analysts mentioned.

The transfer means pay-TV subscriptions for StarHub and Singtel are more likely to proceed declining, as increasingly content material strikes to over-the-top (OTT) streaming providers like Netflix and Disney+, they defined.

However this doesn't imply the dying of pay-TV in Singapore, the analysts famous, mentioning that telcos can tweak their enterprise fashions to compete with streaming providers, albeit with issue.

The Walt Disney Firm instructed CNA on Tuesday (Apr 27) that it's consolidating its media networks enterprise as a part of a worldwide effort to "pivot towards a direct-to-consumer-first model and further grow" its streaming providers.

The channels reportedly set to be shut down embody Fox, Fox Crime, Fox Life and FX; film channels Fox Motion Motion pictures, Fox Household Motion pictures, Fox Motion pictures and Star Motion pictures China. Sports activities channels Fox Sports activities, Fox Sports activities 2, Fox Sports activities 3, Star Sports activities 1 and Star Sports activities 2 may also be shut down.

As of Oct 1, Disney will function a "streamlined television portfolio" that covers the Chinese language language channels - Star Chinese language Channel and Star Chinese language Motion pictures - and Factual Leisure - Nationwide Geographic Channel and Nat Geo Wild.

READ: Disney to close down most of its TV channels in Southeast Asia, eyes progress in streaming providers

Mr Kenny Liew, who's telecommunications, media and know-how senior analyst at Fitch Options, instructed CNA that Disney's announcement will speed up the decline of pay-TV subscriptions in Singapore.

"With more and more content moving away from linear programming to online platforms, pay-TV will continue to lose its appeal," he mentioned.

"Customers increasingly want to watch the content how and when they want to, and streaming services offer the convenience that linear TV services cannot, in this respect."

Mr Samuel Tan, Asia-Pacific telecoms analyst at GlobalData, mentioned that on the finish of final 12 months, StarHub and Singtel had about 698,000 pay-TV subscribers, a lower from the height of round 962,000 subscribers in 2014.

"The trend is likely to continue to cord-cutting from OTT competition," he mentioned, utilizing a time period that refers to ditching tethered pay-TV set-top containers for Web platforms.

WHY ARE PEOPLE DITCHING PAY-TV?

Customers are switching to streaming providers due to their on-demand nature, cheaper worth and additional selection, analysts mentioned.

"In most circumstance, subscription video-on-demand services are cheaper than pay-TV. Without the need to build infrastructure, media companies and broadcasters can now cut out the middleman and go directly to (the) consumer," Mr Tan defined.

"A category of video-on-demand providers known as Internet aggregators, which includes Netflix and Hulu, often have a wider selection of content by sourcing globally for distribution rights from various production houses and sometimes even producing their own content."

READ: Extra TV programmes, help for telcos amongst initiatives to assist Singapore residents throughout 'circuit breaker' interval

Video editor Muhd Adzmin, 34, cancelled his StarHub pay-TV subscription - comprising sports activities, youngsters and leisure channels - about 5 years in the past as he felt it was costly and "wasn't worth it".

By switching to streaming providers, he mentioned he is saving round S$45 every month.

"I didn't have much time to watch TV, and with Netflix, Disney+ and YouTube, I can watch whenever I want at a lower cost," he instructed CNA.

"I can finish a season of a drama in a week, as compared to having to watch the whole season over two, three months on StarHub."

The soccer fan mentioned it was not troublesome to surrender the sports activities channels as he might discover on-line stay streams of matches, watch them at a pal's home or catch the highlights on YouTube afterwards.

HOW CAN PAY-TV KEEP UP?

Pay-TV operators can use sports activities channels as a bonus over streaming providers, Mr Liew of Fitch Options mentioned, though he warned that this won't final.

"Using sports is still a useful way for pay-TV operators to ensure subscriber stickiness through bundling, and for them to upsell and cross-sell other content packs within their own pay-TV ecosystems," he mentioned.

"However, with talk of popular sporting events and leagues possibly moving to streaming platforms, telcos need to prepare themselves for this eventuality."

Mr Liew means that telcos can cooperate with streaming gamers to distribute their providers as a "viable way forward".

"We believe that telcos need to move beyond their current operating models and increase flexibility by adopting a network- and device-agnostic model in order to cater to a broader range of subscribers," he added.

READ: 15% of Singaporean shoppers use TV containers that stream pirated content material: Survey

READ: New legal guidelines banning sale of set-top containers amongst proposed modifications to Copyright Act

Mr Tan mentioned pay-TV operators in Singapore have already taken some steps to carry on to subscribers, together with by bundling subscriptions with different providers like broadband and cellular.

Nevertheless, he mentioned Singapore's telcos can go additional by emulating their counterparts in nations like China and South Korea, the place competitors from OTT providers is "even more intense".

Telcos there have built-in the pay-TV service into a sensible residence set-up, he mentioned, with the set-top field performing like a sensible machine supporting AI voice recognition, gaming, residence safety, and equipment administration.

"In the future, we might not even see voice, pay-TV and broadband as separate services, but a single 'smart service'," he added.

"In that aspect, Singapore’s telecom operators are lagging behind some of their peers."

WHAT ARE SINGAPORE'S TELCOS DOING NOW?

A StarHub consultant acknowledged that extra households are subscribing to a number of OTT streaming providers as a complement to linear TV channels.

"We boldly aligned closely with this worldwide trend - by integrating linear TV channels and OTT streaming services, so that our customers can easily access multiple sources of content all in one place, across multiple devices," StarHub's shopper enterprise group chief Johan Buse instructed CNA.

As an example, he mentioned StarHub is the only official distributor of Disney+ in Singapore. Clients can even watch programmes from BBC Participant, beIN SPORTS CONNECT, HBO Go and Netflix.

READ: StarHub to stop cable providers from July 2019

Likewise, a Singtel spokesperson instructed CNA that the corporate gives a "hybrid model where OTT and pay-TV co-exist to provide the best omni-channel viewing experience for our customers".

Singtel can be "looking actively at different options" to supply a few of Disney's content material from different suppliers, the spokesperson mentioned.

Regardless of that, the spokesperson mentioned a "sizeable portion" of viewers nonetheless want the linear viewing expertise of pay-TV.

"In the past few years, we have grown our pay-TV market share and became Singapore’s number one pay-TV operator in 2019 with over 377,000 household subscriptions," the spokesperson mentioned.

Singtel additionally gives the "most comprehensive" vary of channels, significantly in stay sports activities and ethnic content material, the spokesperson mentioned.

"Coupled with innovations such as our recently launched 4K services, we are able to sustain our leadership position through superior viewing experiences and content choice in a competitive market," the spokesperson added.

IS THIS THE DEATH OF PAY-TV IN SINGAPORE?

Mr Tan mentioned pay-TV in Singapore is unlikely to die fully, however relatively, "converge with subscription video-on-demand services, becoming more similar, or exist as a component of a broadband connection".

That is much like how messaging apps haven't rendered SMS fully out of date, he highlighted.

READ: Commentary: The rise and rise of Netflix in a time of coronavirus

Then again, Mr Liew foresees that pay TV will likely be phased out if subscriptions fall to some extent that makes the service unprofitable.

"Whether operators look to substitute this with their own on-demand offerings are to be seen," he acknowledged.

"Streaming is a very competitive market, and telcos don’t simply possess sufficient scale or access to content to roll out these services in their home market, where the addressable base is small, and large, global streaming players are already competing aggressively for market share."