Future-proofing Astro

Astro Malaysia group CEO Datuk Rohana Rozhan knows too well that the group risks becoming irrelevant if a fundamental shift does not take place fast enough.

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KUALA LUMPUR: Astro Malaysia Holdings Bhd has been in the pay TV business for over two decades, where it has dominated the market thanks to its exclusive satellite broadcast licence and high barriers to entry.

But those high barriers are being dismatled and Astro is surrounded by competitors that are not just other satellite TV provides, but also over-the-top (OTT) players, legal and otherwise.

Competition, as they say, is no longer local but on a global scale. The game has changed, wrote The Edge Malaysia's Senior Editor Joyce Goh in the weekly's latest cover story 'Future-proofing Astro' for the week of April 10-April 16.

The reality is not lost on Astro Group CEO Datuk Rohana Rozhan. 

"We came into this year understanding a few things.  What technology has opened up is a new world order where business models are completely disrupted. There will be a fundamental shift at Astro ... in the way we do business and in how our people pivot,” Rohana told the weekly in an exclusive interview. 

“We also understand that for a big brand to maintain [its position] as a market leader, we have to keep on innovating and investing. We cannot do it incrementally when disrupters are doing it fundamentally. For us, it is about embracing that and knowing when we have to make a fundamental shift. We don’t shy away from it, we do it,” she added.

This transformation isn't something Astro is only just realising it has to do.

“It is not like we woke up one morning and realised there is disruption and we have to change. We have been changing every day because we know that consumer habits, lifestyle and product lifecycles change all the time. But technology has just accelerated that and also changed the pace of innovation,” said Rohana.

And keeping pace to the dynamic shifts in this new world is not an easy thing to do.

“More importantly for us is to change the pace of this organisation. That’s life today — people just want more and more. The reality is now, now, now. It’s a completely different phase. We are trying to transit our people to this new world. It’s quite difficult. We have to pace up,” she readily admitted.

One advantage Astro has today is the vast audience base it has built over the years -- it has a foothold in 5.1 million households and serves 21 million people.

So can it defend its prized base in a fast-evolving operating landscape, and with the entry of global players like Netflix and iflix? 

Add to the mix are local players who have already jumped onto the OTT bandwagon, like Star Media Group Bhd, which launched its first home-grown OTT service, 'dimsum', end last year.

What about the escalating piracy threats, which is no longer an Asian or Malaysian phenomenon, but a global one at that. Access to pirated content has never been easier or cheaper than now, one media analyst pointed out to The Edge Malaysia

Case in point: One can find the Android box, pay RM600 one-off -- RM300 for the box and RM300 for the installation -- and voila, you get access to many channels under the sun.

"Just like that and one can get the same Astro channels and content as the OTT players and even exotic stuff. Piracy is a bigger threat to pay-TV operators and OTT players alike," said the analyst.

In the mean time, Astro faces falling pay-TV subscriber numbers, which makes up the bulk of its revenue stream.

For three consecutive quarters since 4Q2016, the number has been sliding, though it started showing signs of recovery when it climbed to 3.467 million in 4Q2017 from 3.443 million in the previous quarter.

What does Rohana has to say to that? And what plans does she have on digitalising Astro? She told the weekly that Astro is more than just a content company. What does it mean?

More importantly, why does she believe that Astro is a 'total return stock' when it is still trading below its relisting price of RM3 per share?

Well, pick up a copy of The Edge Malaysia today to find out more. 

Check out too the story 'Is it time to tune out on telcos?' by Trinity Chua of The Edge Singapore, where she wrote 'having a pay-TV business is not as useful to a telco today as it was in the past, thanks -- or rather no thanks -- to the availability of streaming services.