Stagnation in the revenues of traditional pay TV operators underscores a changing landscape that is leaning increasingly towards streaming platforms and services.
Both local and regional players are investing heavily in the procurement and production of localised content. Consumers in Thailand are increasingly moving towards streaming platforms for their media needs as the expansion of 4G mobile networks across the country, coupled with a renewed focus by operators on high-capacity fibre broadband networks, particularly in urban areas, has allowed streaming video to become commonplace.
Traditional pay TV operators have seen their market share eroded by both local and foreign over-the-top (OTT) streaming players such as iflix, Line TV, Hooq and Netflix, which are making headway into the market through rigorous investments in Thai content, which makes up 90% of total video consumption in the country.
TrueVisions, Thailand's primary pay TV provider, has posted several quarters of premium subscriber declines as users migrate towards standard packages, or terminate their services entirely in favour of cheaper and more flexible OTT services. The ensuing stagnation of revenues has led the company to trim its catalogue of channels to lower content costs; in 2017, the company discontinued six TV channels, notably several produced by HBO.
Of True's 4 million subscribers in the second quarter of 2019, only 56.5% were paying subscribers, with the remainder being either free-view package subscribers or free-to-air box users, which are of no subscription value to the company.
Together with True, several other satellite TV providers, such as PSI Holdings and GMMZ, also sell set-top boxes to consumers, but allow them to access channels for free.
The appeal of traditional pay TV providers remains largely in their ownership of rights to broadcast major sporting events, such as the English Premier League and WWE, which remain hugely popular in Thailand. We believe special sporting events, such as the Tokyo 2020 Olympics, could also potentially provide a short-term subscription boost to TrueVisions.
Local subscription video-on-demand (SVOD) providers have successfully attracted subscribers to their platforms through various strategies. STG Mediaplex-owned Doonee sought to broaden its appeal by providing catch-up services for popular Thai TV series through partnerships with local broadcasters, while Primetime has focused largely on offering Hollywood movies within three months of their premieres, as well as seeking distribution agreements for movies made by Thai filmmakers.
Other foreign OTT players have invested in producing local content for the Thai market. In April 2017, Netflix revealed a fully localised Thai user interface and Thai subtitles for thousands of hours of programming.
In April this year, US-based Netflix announced a partnership with production house SK Global Entertainment to produce a film on the 2018 Tham Luang cave rescue as part of a wider Asia-centric content strategy.
Singtel-backed Hooq has also been intensifying its expansion into the Thai market, notably through partnerships with domestic film studios. The company partnered with the Thai studios GTH, Five Star and TIGA when it launched its service in April 2015.
Hooq also teamed with the leading Southeast Asian ride-hailing service Grab to make its service available via app to boost its subscription base. In April this year, Hooq announced plans to produce 100 titles across Singapore, Indonesia, the Philippines, India and Thailand.
Iflix is focusing on offering partial content for free in Thailand to gain subscribers, and is investing in procuring and producing more short-form content.
Much like Malaysia, Thailand is home to a large, urban population with good access to high-quality fixed and mobile broadband, and has many of the same video consumption trends as in other, developed telecom markets around the world.
We believe while TrueVisions will maintain its market position, no other significant pay TV player will emerge with the increased competition from OTT players and the market migrating to streaming.
In September 2016, satellite TV player CTH, which had 3 million subscribers thanks to securing Premier League rights, quit the market after losses of up to 20 billion baht.
