Tough for MYTV to attract free TV channels
Ng Wai Mun 
As of end-July, Astro had almost 5.3 million subscribers, or 72% of television households in the country

As the country moves closer into the digital television broadcasting era, households which are still receiving TV programmes via the traditional aerial analogue system will have to look for other means to see their favourite programmes.

Of the estimated 7.3 million television households in the country, 5.3 million are Astro Malaysia Holdings Bhd subscribers, as of end-July. The focus is therefore on the two million households still on the analogue system, primarily receiving the free-to-air stations’ (FTAs) channels.

By the time the country goes fully digital by mid-next year, these two million households will need to choose between MYTV Broadcasting Sdn Bhd and Astro to continue receiving TV programmes.

MYTV has a licence from the government to build and operate a digital-based platform for FTAs to broadcast their programmes.

However, households will only opt for MYTV if it is able to attract a high number of quality channels to its digital platform. The problem is that most channels and stations, if not all, are already broadcast by Astro.

An industry official is doubtful whether FTAs will want to be carried by MYTV. “From the FTAs’ perspective, they will incur additional operating cost in the form of carriage fee imposed by MYTV to be on its platform.

“Viewership via MYTV will be low. Low viewership means low advertising revenue. They (FTAs) are already being carried by Astro. I believe FTAs are not paying Astro any carriage fees. It doesn’t make economic sense to be carried by MYTV.”



Astro’s greater reach

The official adds that Astro reaches out to 72% of the television households in the country while MYTV is starting from scratch. Thus, switching platforms for their broadcasts to be carried by MYTV only instead of Astro would seem illogical.

It is reported the government will be giving out up to 4.2 million free digital decoders, in phases, until the end of next year, to receive MYTV’s transmission. The recipients of these decoders are primarily BR1M recipients.

BR1M, or the 1Malaysia People’s Aid programme, is a government scheme to assist lower-income earners. The industry official says MYTV has already gone on the ground to distribute the decoders, starting with the East Coast.

Even if the said two million households were to opt for MYTV given the free decoders, FTAs will still see Astro as having a 72% household reach compared to MYTV’s 28%. Given the narrower reach, the industry official says fewer FTAs will want to be carried by MYTV. Having fewer channels than Astro will inevitably mean households will opt for Astro despite getting free decoders.

Whilst Astro is a pay-TV service provider, it also offers the NJOI satellite TV service, which is free if you don’t opt for add-ons. This service shows the bulk of the FTAs’ channels in Malaysia, the same ones that are expected to be also carried by MYTV.

For those who do not qualify for free decoders, the official says “NJOI’s business model is almost identical to that of MYTV. The cost of subscribing for NJOI or MYTV services is almost the same.”

To receive MYTV’s transmission, one needs to buy the MYTV set-top box for RM299 (excluding GST). Installation fee is almost RM200. To access NJOI, it costs about RM250-300 plus the RM100-150 installation fee.

With NJOI, one gets access to 28 TV channels and 20 radio channels for free. The number of channels provided by MYTV is expected to be fewer. MYTV has yet to confirm which FTAs are on board.

The official says: “From the customers’ perspective, besides the cost (of subscribing), they will also look at the number and quality of the channels provided.”

As such, despite the free decoders to receive MYTV broadcast, he says the bulk of these two million households are likely to opt for Astro.

As of end-January, Astro had 3.5 million pay-TV service subscribers and 1.6 million NJOI subscribers to give a total of 5.1 million subscribers. Since then Astro has only been providing the overall combined total.


Big jump in NJOI subscribers

The 1.6 million NJOI subscribers represent a massive 80% increase from the 920,000 at end-January 2015, a period of just two years.

In a report on Astro, Public Investment Bank Research analyst Chua Yi Jing highlights that with NJOI’s increasing reach, Astro will continue to be advertisers’ preferred choice.

In May, Astro launched the video streaming service, NJOI Now, to provide Malaysians with free access to on-demand entertainment, sports and news. The service is available on both mobile and online. With this app being available, despite free MYTV set-top boxes, its utilisation rate is likely to be low.

Analysts foresee Astro as the preferred option between the two. Best-case scenario is that Astro’s subscribers will increase by another two million to complement its current 5.3 million, translating to a huge 38% rise.


‘An excuse not to sign up’

What is new and seen as in Astro’s favour, is the recent questioning of MYTV’s set-top boxes’ capabilities. It was reported that when the FTAs migrate onto MYTV’s platform, they wanted the set-top boxes to gather audience viewership data. In short, the decoders need to be internet-enabled.

The official, however, thinks that this issue is inconsequential. “The issue is even seen to be hyped up, indirectly revealing FTAs’ reluctance to come on board MYTV,” he says.

MYTV has since clarified that its decoders have the required capabilities to capture the desired data.

When contacted, MYTV tells FocusM it is unable to offer any response to its queries on the number of set-top boxes in use, and the number of FTAs that have signed up to broadcast on its platform.

In MIDF Research’s report on Astro, analyst Martin Foo says the stock offers an attractive dividend yield. He recommends a buy with a target price of RM3.64. If the company were to maintain the financial year ended January 2017 dividend of 12.5 sen at current levels, the yield would be 4.4%.


DTT concession

The Malaysian Communications and Multimedia Commission awarded a 15-year digital terrestrial television (DTT) concession to Puncak Semangat Sdn Bhd in April 2014.

The latter then transferred the licence to its subsidiary, MYTV Broadcasting Sdn Bhd, to undertake the project.

Since the official launch in June, the service has covered over 90% of the population and this will increase to 98% by next year.

Prior to this, two other companies – REDtone Network Sdn Bhd and i-Media Broadcasting Solutions Sdn Bhd – also bid for the 15-year concession to operate the DTT infrastructure.

MYTV is Altel Holdings Sdn Bhd’s wholly-owned subsidiary. Altel itself is wholly owned by Puncak Semangat, which also owns Altel Communications. The latter is involved in the local telecommunications industry.

This article first appeared in Focus Malaysia Issue 254.