Transformation is most often defined as a dramatic change in function or form. It’s a word we all often see used when, in reality, what’s actually being described is a minor shift in approach. The underlying theme of this blog is, and this will come as little surprise, transformation. Indeed, one could argue that disruption is perhaps a better word; disruption in the sense of a technology truly disrupting the way people can work and allowing them to think and act differently. That subject is the cloud and how we’re now beginning to tap into the real possibilities it brings to the media, entertainment and technology (MET) space.
Before we get to that, what is it that marks Asia and what are the key trends we’re seeing across this market? Two market reports we read recently highlight two key sets of figures, one looking at traditional pay TV revenues across the region and the other concentrating on the specifics of the OTT market. According to Digital TV Research, pay TV revenues will fall across the Asia Pacific market, citing an overall annual revenue figure of $26bn by 2028, which is $1.6bn less than in 2022. It says, “Pay TV revenues will fall in 10 countries, including Japan (down by $889 million) and China (down by $309 million), between 2022 and 2028. Conversely, India will add $153 million.”
Simon Murray, Principal Analyst at Digital TV Research, said: “IPTV revenues will overtake digital cable in 2023. IPTV revenues will climb by $481 million between 2022 to 2028 to $11.26 billion.” Digital cable will lose $1.15 billion between 2022 and 2028, with analogue cable down by $382 million. Satellite TV will also fall – by $494 million.
This is a significant contrast to the same company’s analysis of the OTT market across the same region, with TV and film revenues delivered this way predicted to grow by 56 per cent to $52bn in 2028, up from $33bn in 2022. China is set to add $19bn of that, India $2bn, South Korea $3bn and Japan $4bn. China’s percentage of the market will actually decrease from 48% to 38% of the total revenues for the region.
A very interesting figure we also saw recently is one that highlights the speed of this change in the US – the rise of cord-cutting, as it’s often referred to. A recent Washington Post story brought home the scale of change across US cable. Author Paul Farhi, says, “As recently as 2016, when Trump was narrowly elected president, just over 70 percent of all households with a TV had cable or satellite TV subscriptions. Today the figure is just under 40 percent, according to S&P Global Market Intelligence, a research firm. And it’s dropping fast.”
He goes on to make a similar point to the one I’m about to make: those viewers have to go somewhere to view the information and entertainment they want, when they want it. It doesn’t mean well-established MET brands are disappearing, rather they are adapting to the online world. It’s also important to highlight the rate of change across Asia when it comes to pay-TV revenues, is far slower, as highlighted in the figures above. Pay-TV is still, and will remain, a powerful force across Asia but that’s not to deny change is occurring. Live sport is the main driver for pay-TV. It’s a similar decline across free-to-air television (FTA) in this region. With ARPU – average revenue per subscriber – varying hugely across Asia, it being down in the low US-dollars-per-month range in many countries, the move from FTA to pay-TV and now to OTT services undoubtedly has its challenges.
The OTT market as a whole is at a tipping point: how to increase revenues while not driving up churn is a major issue for big and small players alike. There’s massive variation across the region in what consumers can afford to spend and there’s a mix of AVOD, SVOD and, we expect, FAST (Free Ad Supported Television) to gain ground.
Alongside these differentiators, another key variable between Globecast Asia and Globecast in other parts of the world, is that, in general terms, and the US is a good example here, they tend to concentrate on their domestic market. This is for obvious commercial reasons. Operations across Europe can be the same. This is not to say there’s no international work or connectivity required, far from it, but it’s not the same as the way in which we need to work across Asia.
There is no single priority or “domestic” market here. From here in Singapore, we work from Pakistan south into Australia and New Zealand and everywhere in between. There’s so much geographic and business imperative separation across the region.
We have years of experience in delivering content into the region and then moving it around Asia. In terms of contribution, this can be working across major sporting events like the South-East Asian Games. But it can be contribution more widely in the sense of bringing in feeds/channels from around the world. This can be using traditional methods or IP connectivity, including SRT-based feeds.
In fundamental terms, what’s crucial is our ability to access, process and deliver content/channels to allow our customers maximise monetisation across these markets, in the best quality possible therefore achieving maximum viewing figures. We’re not here to dictate to the market, rather to develop services suitable for the specific requirements of each customer and the imperatives of the region/country in which they operate.
On the distribution side, we’re seeing an increasing move from satellite to IP. Of course, there are countries like the Philippines where satellite is essential. However, in order to maximise content ROI from a customer perspective, it may well not be commercially beneficial to produce feeds for every country or affiliate. The content owners have to look at where it’s commercially viable to do this. We help them to do this accurately.
IP distribution is very good for targeted distribution. The OTT space is another example. Older IPTV players are familiar with satellite antennas for downlinking but newer OTT platforms aren’t. Keeping cost to a minimum is vital for them and they don’t not want to have to access the content from a teleport. IP delivery to them is essential for the success of their business models.
And then there’s the crucial part: regionalising this content and being able to create additional services, like pop-up channels, quickly and efficiently to maximise that ROI. The sports market is a good example (take a look at our partnership with BeIN Sports Asia Pacific).
We help our customers add value to their feeds as they pass through our facility. We provide commentary services and captioning alongside graphics insertion for regionalisation. We’ve recently enhanced our captioning services using AI as the accuracy is now very high. We can precisely tailor the same base feed to multiple markets across the region.
So, back to the opening point: the cloud and it’s truly disruptive capabilities. What we’re talking about powering all of this flexibility, scalability and agility is our use of the cloud. So far, in many ways the cloud has been used across the MET space to replicate existing services without truly being a paradigm shift. At Globecast, what we are now achieving via the cloud is that paradigm shift.
Through Globecast’s work on cloud playout – there are multiple examples here – and our partnership with AWS (though we also work with other key cloud service providers), we have developed a deep understanding of what’s possible now and in the future. A recent example is the development and launch of first public cloud video headend, powered by AWS, for a major European Telco. It really is worth you reading that press release and there’ll be a longer blog on the subject shortly. In the meantime, our IBC preview provides the highlights of what we’re talking about across managed services. This is the future.
In fact, it’s absolutely central. It allows us to spin up and spin down services very, very quickly. It allows us to process that content in whatever way is required. And customers only pay for the services while being used. This is an OPEX not CAPEX model and that’s very appealing.
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