Experts warn that traditional media providers are already feeling the brunt of this digital disruptor
by RAHIMI YUNUS/ graphic by DYG NORAZHAR
MORE users are abandoning decade-old free-to-air (FTA) and pay television (TV) channels and instead have opted for video streaming for their favourite movies, documentaries and sitcoms.
Video-streaming channels offer abundance of movies and TV shows that can be viewed on various devices from an intelligent TV to smart phones and tablets for a low monthly fee. Consumers also can choose where and when to watch their favourite shows.
US-based Netflix Inc and homegrown iflix, which offer an expansive library of contents, are gaining momentum with consumers in Malaysia, especially the former.
The Walt Disney Co, the most powerful entertainment company, has Disney+, a streaming service which provides access to thousands of TV episodes and hundreds of movies.
Disney owns some of the world’s most lucrative and popular movie franchises like Lucasfilm Ltd’s “Star Wars” and Marvel Cinematic Universe.
Apple Inc has also introduced Apple TV+ as the US-based company, which has sold more than 2.2 billion iPhones, seeks to add value to its line offerings.
Online TV streaming services, also known as over-the-top (OTT) platforms or “Internet TV”, have changed the landscape and experts warned that traditional media providers are already feeling the brunt of this digital disruptor.
“The emergence of video-streaming platforms has adversely impacted traditional media players in terms of earnings and how users consume the content.
“Consumer preference now seems to have shifted to consuming content on mobile or portable devices as opposed to traditional media such as FTA or pay TV,” Affin Hwang Investment Bank Bhd analyst Chow Wei Nien told The Malaysian Reserve (TMR).
Besides the flexibility, Malaysians choose Internet TV over terrestrial and satellite TV due to the content, cost and convenience.
“We do not have actual statistics or numbers. But in our view, user preferences have changed over time. Nowadays, users prefer to stream online rather than watch the FTA or pay TVs, partly due to convenience, content variety. Furthermore, the OTT is comparatively cheaper,” Chow said.
He said besides the strong competition from OTT services, pay-TV operators such as Astro Malaysia Holdings Bhd are also facing another major issue related to pirated boxes or Android box. RHB Research Institute Sdn Bhd analyst Jeffrey Tan said the emergence of video-streaming services has affected the subscriptions of pay TV.
“It has contributed to higher subscriber churn for pay-TV subscriptions as can be seen on Astro. There is an increasing demand or rising interest in streaming video-on-demand (VOD) services. The lower and more affordable broadband prices are a contributing factor,” Tan told TMR.
Astro launched its own OTT platform called Astro Go in 2012 to tap the online streaming market. tonton, a Media Prima Television Networks OTT platform, is Malaysia’s first homegrown video-streaming service that was launched in 2010.
Acting deputy dean of academic affairs of the Faculty of Communications and Media Studies at the Universiti Teknologi Mara, Dr Wan Hartini Wan Zainodin said traditional media outlets are facing stiff competition from OTT services and the situation can spell doom to the former.
“Traditional media is no longer seen as the mainstream platform to seek information compared to the Internet which provides access to information at one-click away.”
“It is undeniable that affordable Internet plans have helped video streaming’s rise. The trend is slowly killing the conventional medium if there is no proactive action taken by the media industry,” Wan Hartini told TMR.
OTT providers are for the long game and one analyst said pay-TV operators must have good and differentiated content at an affordable price to be successful in the
“streaming wars”. “It is not to say it is bad for the traditional player because they have also embraced the transition to the digital era. They need good content to defend their market share, like what Astro did by focusing on vernacular contents,” an analyst who asked for anonymity, told TMR.
The analyst said VOD players do not have major expenditure on infra-structure as compared to pay-TV companies and that is a cost structure advantage for the former.
Analysts said the digital tax that will be effective on Jan 1 next year could provide a level playing field for local and foreign online streaming service providers in Malaysia and help to curb content piracy.