Jeffrey Soong, CEO of IPTV consultancy BNS discusses latest issues in Pay TV in Asia

I see BNS are part of a consortium to launch DMB mobile TV in Indonesia next year. How do you rate the prospects for mobile TV versus Direct to Home (DTH) satellite TV services in this country of 250 million people?

We do not see mobile TV as a competitor to DTH as it is more an extension of DTH on-the-go. There is a difference in the business model as with DTH someone needs to pay for a receiver and dish. They also need to install the DTH service and in Indonesia the logistics can be very costly.

Mobile phones are something most people have and regularly upgrade and in Indonesia there is tremendous growth just now. The cost of deploying mobile TV is lower as you need less satellite bandwidth as the small screen means mobile TV pictures are good at a low bit rate. We will need to see the chip costs for receivers in mobile phones come down, however, I would say the business case is better for a mobile TV service in Indonesia.

Overall IPTV has not progressed as fast as many expected in China What do prospects look like and should mobile TV fare better?

We believe recent figures in China for IPTV are now approaching an installed base of 1 million connections although how much everyone is charging is not clear. Currently most broadband in China is still running at 512kbts speeds but infrastructure is improving.  Telecom operators have money to spend and are in the business of investing in their networks and we expect to see more upgrades that will support IPTV.

China really needs more foreign content as coupled with piracy most people seem happy with existing TV services and cheap DVDs.   You have to remember spending power is still limited in China and the existing TV business model is based on advertising. If you at look at CCTV and the terrestrial channels they are very strong as the ability to reach 1.3 billion people makes for huge advertising. Any new platform has to tap that scale of market to command serious advertising dollars. I think the mobile TV business case is stronger short term as more people already have a mobile handset.  (In fact China now has 500 million mobile phone users).

Telecom operators are encouraged to invest in a state-of-the art IPTV networks that can deliver high definition (HD) content. But what happens if they can not find the premium sports and movie content to watch on it?

Are you talking about SingTel? There is debate in the industry about just how important sports content is for Pay TV. The likes of Rupert Murdoch believe its number one and that strategy has clearly worked well for them. If you look at SingTel (who recently launched IPTV with HD although StarHub has locked up exclusive rights on key sport and movie content) they are adopting a three pronged strategy to differentiate in their IPTV marketing launch.

One they have content you can not find elsewhere such as a HD channel and Sony have even produced a special movie channel for them. Secondly, they are also offering content in multiple dialects such as Cantonese not currently available and finally they are placing a big emphasis on Video on Demand.     

Posted under Michael's Blog