Pay-television companies change strategy
Pay-TV companies are now cooperating with each other, rather than slashing fees in an effort to find more subscribers.
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Saigontourist Cable TV (SCTV) has become a partner of K+, while SCTV now broadcasts K+’s package of four HD-standard channels on SCTV’s cable TV network.
The cooperation agreement was made public one week before K+ began broadcasting the UEFA Champions League and UEFA Europa League, key TV programs of VSTV (Vietnam Satellite Digital TV).
The deal, analysts said, shows that confrontation of many years among pay-TV companies has stopped. Instead of the fierce competition which may lead to an impasse, they chose to coexist.
As OTT TV and mobile TV have appeared, service providers have to find a new way to maintain subscribers and revenue.
A report from the Ministry of Information & Communication (MIC) shows that the total revenue of the pay-TV market was VND7.5 trillion in 2017, a sharp decrease from the VND12 trillion in 2016. The decrease was blamed on the race to slash fees among television channel providers.
At least five other pay-TV service providers, including VTVcab, MyTV of the Vietnam Post & Telecommunication Corporation (VNPT), NextTV of Viettel, OneTV of FPT and Hanoi Cable TV (HCATV) are cooperating with K+ in selling channel packages at the same monthly subscription fees of VND125,000-150,000.
SCTV, VTVcab and K+ are the three biggest players in the market. They have high revenue and numbers of subscribers, and advantages in content production.
SCTV, with 4.5 million subscribers, gained revenue of VND3.42 trillion in 2017.
K+ attracts subscriber thanks to copyrighted sports tournaments, entertainment programs and feature films. VTVcab has both advantages.
“The cooperation in selling service packages will benefit all parties. Television companies will be able to retain subscribers though they don’t have exclusive TV programs provided by other ,” a senior executive from MyTV said.
Meanwhile, other television companies which have copyrighted programs will be able to earn more money from profits shared by their partners.
“This has big significance in the context of subscriber growth slowdown,” he said.
K+, for example, can obtain more indirect subscribers and has no need to make heavy investments in infrastructure.
“Indirect subscribers from partners will also be K+’s subscribers. This means that we will have more subscribers and additional revenue from partners,” a representative of K+ said.
He said that service providers now can focus on upgrading service and content quality.