Astro stays on the on-demand curve, but is it enough?

• Allows content to be viewed on unlimited mobile devices at home
• US$2.4mil cloud infrastructure helps scale on-demand content

CLOUD storage and major shifts in content consumption trends are changing the television business, and Astro Malaysia Holdings Bhd has taken its leap forward by providing Malaysians with a new way of consuming its content, at home or on the go.
 
“There is an ongoing shift in content consumption trends and our next growth focus is to cater to the content needs of every individual within the household – what we call the ‘individual space,’ the ‘smart device space,’ and the ‘in-home and mobile spaces’,” its chief executive officer Rohana Rozhan told a press conference in Kuala Lumpur on Oct 8.
 
This shift that Rohana is referring to is primarily where TV is no longer the main screen for viewers to consume video content, especially among Gen-Y and Gen-Z.

Eliza Noordin, an Astro customer with two set top boxes and an Astro on the Go (AOTG) user herself, knows all about this as her three kids, between ages 10 to 15 prefer to watch most of their content on their PCs and laptops. “They are high consumers of video,” she notes.
 
To address this reality, Astro has launched On Demand (OD) Entertainment, its answer to changing video habits at home, especially with younger consumers.
 
The launch of the new service also comes in the wake of looming video-on-demand (VOD) competition from over-the-top (OTT) content players such as the Catcha Group-founded iflix, and US giant Netflix which has already landed in Singapore, with an eye on other Asian markets.
 
Astro OD allows viewers to select any show from their subscription package and stream or download the content to any connected device, including a television, tablet, smartphone or laptop, by connecting Astro’s Personal Video Recorder (PVR) to their home WiFi Network, at a recommended speed of at least 5Mbps.
 
While it has launched on-demand services in the past, specifically its Astro Plus service in November of 2014, its new service is more comprehensive, with three components to it.
 
The three components cater to every viewing preference and budget, with the caveat being that users must have an Astro PVR to stream content over the home WiFi network.

The offering starts with ‘OD Free’ which allows customers to access any content from their existing packages on any number of screens in the house.
 
With OD Plus, users will have to pay an additional RM15.90 (US$3.68 at current rates) per month to enjoy complete season of TV series and movie box sets. Users can also opt to binge watch their favourite series via this offer – at home or on the Astro On The Go (AOTG) service.
 
The third offering is OD Store where users can pay for the latest cinema releases from Astro First, Astro Best and A-List and watch them instantly. The shows here range from Hollywood to local and Asian blockbusters, across a wide range of vernacular and international languages.
 
Explaining the rationale behind the launch Astro OD, Rohana said it is Astro’s aspiration to serve its customers, to understand them and their viewing trends as well, hence the service combines content with the convenience of watching it when, where, and on which device.
 
“We already know they, especially the younger viewers, like to watch content when and where they prefer to. With Astro OD, we are telling them, you can continue to enjoy great content with Astro and in the manner that you want to,” she said.
 
“We offer different choices of content given the fact that we have the best vernaculars, the best regionals, the best internationals, the best sports, and the best news,” she declared.
 
Year-end targets
 
With the introduction of Astro OD, the company expects to hit several targets by year-end, according to Rohana.
 
The first is to grow its current base of 181,000 connected PVRs to 500,000. Astro considers this a low hanging fruit as it already has 800,000 customers who have paid for its PVRs. 

The second is to increase AOTG app downloads to 2.5 million from the current 1.8 million. The third is to increase viewership of active mobile users from 140 minutes weekly to at least 180 minutes. In addition, to cater the demand of individual content needs, Astro hopes to increase individual AOTG users from its current 800,000 to 3 million in five years.

With Astro already providing guidance of its average revenue per user (ARPU) increasing marginally from to RM99.10 to RM99.50, it expects Astro OD to help it achieve this. [RM1 = US$0.23 at current rates]
 
Golden era for TV business
 
When asked whether the company was concerned about the emergence of OTT players such as iflix and Netflix, Astro chief operating officer Henry Tan argued that these services were no substitutes for Astro because of the “rich choices of content” Astro offered, especially its vernacular content.
 
“The real challenge is between Netflix and other streaming applications,” he said.
 
During the press conference, Tan expressed his belief that it is now the golden era of the television business because TV is everywhere.
 
“There no such thing as traditional versus online, both are moving together. What’s on the big screen (TV) is available online and the small screens (mobile devices) and vice versa,” he said.
 
Cloud infrastructure

Behind the Astro OD service is a cloud infrastructure that cost in excess of RM10 million and took two years to build, said Astro chief technology officer Phuah Aik Chong.
 
Astro chose to go with a public cloud, but with its content encrypted.
 
Phuah cited the flexibility and cost effectiveness of adopting a cloud based model for on-demand services.
 
“If tomorrow we need to add more hours of content, instead of continuing to build our infrastructure, which is costly, all it takes is to just open the tap and add more storage capacity on demand,” he said.
 
The processing of the content to ensure it fits the format of the screen in users’ homes is also done in the cloud, he added.
 
His CEO Rohana also acknowledged the importance of the cloud.
 
“We have leveraged the cloud ecosystem in terms of the delivery of on-demand content which provides us the ability to scale up our content catalogue easily,” she said.
 
“At the same time, it enables us to enhance users’ viewing experience across different types of devices including set-top boxes, smartphones, tablets, laptops and PCs,” she added. The set-top boxes mentioned refer to PVR set-top boxes that has recording capability and content storage while the non-PVR set top boxes enable linear viewing of channels that customers have subscribed to.
 
Phuah declined to reveal which cloud service provider Astro is using for its cloud infrastructure, but it is believed to be one of the largest providers in the world.
 
One major challenge for the Astro OD service to take off is the cost of the PVR. Speaking to Digital News Asia (DNA), Rohana admitted the current RM600 price of the PVR is still a little steep for many users, and said that Astro is working with its vendors to lower the price.

This is a critical hurdle for adoption of this service. [Article updated with additional information.]
 
But Astro’s immediate challenge will be to convince the likes of Eliza, who is among its 619,000 PVR customers who have not connected the service.
 
When asked if she would connect her PVR to her home WiFi network now in order to enjoy the convenience of Astro’s OD service, she said, “No. My kids are high consumers of YouTube and seem happy with the quality and variety of content they get from there. So this is not a service I would be keen on,” she said adding that the only time the family watches TV together is over a weekend movie.
 
It is unclear how prevalent such a household experience is, but for Rohana and Astro, perhaps the main challenge in adapting to changing consumer viewing habits will not actually come from the OTT players as is widely perceived. But with OD, Astro has clearly shown that it is staying abreast of any consumer viewing trends. Will this be enough to keep it on the curve?
 
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