Pay-TV subscriber growth in Asia is decelerating, prompting more urgency than usual among the 600 executives that attended the fifth annual Asia Pacific Pay-TV Operators Summit (APOS), recently convened by Media Partners Asia (MPA) in Bali.

The industry has been actively tackling its perceived shortcomings, airing more popular Hollywood shows within days of their US debut while clamping down on online piracy, which benefits from lags in transmission.

Nonetheless, more can be done to bring on board those without a pay-TV subscription, representing 47% of TV homes in Asia-Pacific, MPA executive director Vivek Couto argued in his opening presentation at APOS. He highlighted three areas in particular:

1) Marketing

The importance of good marketing is rising, as operators diversify their services in the face of increased choice and competition. “A lot more needs to occur as we transition from a B2B to B2C mind-set,” Couto suggested.

“Here, one can really learn from India, a highly competitive market where brands really come together, whether it’s through tie-ups with TV set manufacturers, joint marketing with broadcasters and platforms to upsell or convert customers, or celebrity endorsements to create deep consumer connections.”

Another country worth looking at is the US, where HBO accumulated two to three million new customers last year, ending years of a flat base.

“One big reason was that HBO decided to show that you could grow video and broadband, not just broadband, with HBO and HBO Go critical to the bundle,” Couto noted.

“It was all about marketing effectively with operators to a big part of what HBO calls an undecided universe.”

2) Packaging & tiering

The success of a new packaging strategy implemented by Malaysia’s leading pay-TV operator, Astro, is seeing others follow suit.

However, more simplicity and enhanced consumer choice is needed in a number of markets, Couto indicated.

While a strong basic tier is important, there may be an opportunity to pass the baton to customers beyond in higher tiers, giving people greater control on the content they watch.

At the same time, operators must ensure that customers pick a certain number of channels at a set price point to avoid diluting ARPUs, Couto added.

3) Local content

MPA analysis evaluated the different roles played by local content for pay-TV operators in three markets: Malaysia, Indonesia and Thailand.

While early investment in international and regional content enabled Astro to reach 30-40% of TV homes in Malaysia, vernacular content helped push penetration to beyond 50%, while investment in premium Asian content buoyed ARPU.

Indonesia’s MNC Sky Vision, meanwhile, is at an interesting stage. International content remains in demand as pay-TV penetration continues to grow from a low base, but more local shows will be needed to sustain this growth outside Jarkarta, Indonesia’s biggest and richest urban center.

ARPUs will also fall but this decline could be offset by investment in Asian premium content, which has yet to take shape.

In Thailand however, a big bet on self-produced and local content by major operator TrueVisions has failed to produce meaningful returns. Subscriber numbers flattened and sequentially declined, with next-to-no growth in the premium local and Asian content category.

The unifying theme that emerges from these three markets is that local Asian content remains a basic proposition. “Channels developed locally – either by domestic broadcasters or international companies – are largely restricted to basic packages,” Couto noted.

“Although exceptions exist, there clearly remains a dearth of quality premium Asian content that could drive the pay-TV business to the next level.”

This represents a big opportunity for operators in Southeast Asia, as well as big international groups such as Fox, Turner and Sony, Couto added. “Key hurdles include piracy, lack of scale in domestic markets, and lack of well-developed international distribution.”

Data sourced from Indiantelevision.com; additional content by Warc staff