Biggest threat to Indonesia’s DTH & Pay TV market is piracy: Tanoesoedibjo

MUMBAI: While there may have been disruptive pricing and piracy issues that haunt the Indonesian pay TV market, the potential in the country is enormous.

According to Indonesian satellite Pay TV company MNC Sky Vision’s president and director Rudy Tanoesoedibjo, the industry faces three key hurdles, which are stagnating growth. Outlining the three key points he says that piracy has been the biggest threat to the pay TV and Direct to Home (DTH) market.

“We work very hard to fight piracy and we get very good support from the channels to stop piracy,” Tanoesoedibjo says. He was speaking at the recently held Asia Pacific Operators Summit (APOS) 2015 in Bali.

Tanoesoedibjo further adds that the other two reasons are inter related to the content of the channels in Indonesia. “We are experiencing what India was experiencing in the past. In India, it was called call rotational subscribers while we call it recycle subscribers. The same set of new subscribers come in once again every three to four months, as new subscribers like a rotational churn thanks to an ‘unhealthy’ free offering for new subscribers. A single subscriber jumps from one operator to another,” he says.

The third reason behind the stagnant growth, according to Tanoesoedibjo, is severe because of a new practice adopted by some operators in the country. “Operators do not shut off non-paying subscribers. We have had instances where people only pay one time and continue with the service. This threatens the growth,” he laments before adding, “this is a structural problem and we can only solve it with the participation of the channels.”

To battle the menace of piracy, MNC Sky Vision is currently fighting approximately 36 cases in court. The company has three brands namely Indovision, Top TV and Oke Vision under its umbrella. The good news here is that MNC Sky Vision has managed to crack one the biggest player, which had 75,000 subscribers.

Talking about the scale of opportunity for DTH players in Indonesia, Tanoesoedibjo opines that the opportunity is large enough with a market size of 40-50 million subscribers and the pipe can grow further. “Currently the pipe is stagnant,” he informs.

Going forward, MNC Sky Vision is planning to offer more High Definition (HD) channels in the country and will also be moving soon to MPEG-5.

“It doesn't matter if the Set Top Box (STB) is MPEG2, MPEG 3, MPEG 5, HD or even Standard Definition (SD), as the price difference is only one or two dollars. We will be move to MPEG 5 by the end of the year,” he says.

Throwing light on the dilemma of whether Over the Top (OTT) and DTH players can co-exist peacefully, Tanoesoedibjo says that DTH operators need to evolve in order to survive. “DTH operators think with a traditional mindset that they just provide access to content via their technology for customers. We should not forget that at the end of the day, we do not have control of content. We are only a pipe,” he informs.

Calling new technology that can deliver content faster, efficiently and cheaper than a DTH operator, a threat, Tanoesoedibjo says that in that scenario operators will have to expand, introduce better technology and new means of delivery such as OTT platforms.

“We have already launched our alternate OTT, and are also preparing our stand alone OTT services next. But maybe in the next five months there will bea new means of delivery,” he mulls.

On a concluding note Tanoesoedibjo says that operators need to pay attention in creating their own content. “We now have our own content for 20 channels. At the end of the day we deliver content. But if someone else finds an easier way to deliver it, then DTH needs to watch and be more effective,” he cautions.