MYTV Broadcasting Sdn Bhd, an infrastructure and network service provider controlled by tycoon Tan Sri Syed Mokhtar Albukhary, has agreed to lower its fees for digital transmission of terrestrial television, following complaints from free-to-air (FTA) broadcasters that they were too high, say sources.
The MYTV board is now deliberating the new charges, says a source familiar with the matter.
MYTV had earlier proposed a transmission fee of RM12 million for each standard definition (SD) channel and RM25 million for a high-definition (HD) channel once it reaches the key performance indicator of 98% of households. It needs to do so by June 30, 2018, which is the date set for Malaysia’s analogue switch-off.
It is understood that the company is considering lowering the fees for SD channels to “a high range of seven figures” a year, while that for HD channels will be based on the programmes’ required bandwidth.
“MYTV will finalise the transmission fees by its official launch, which is tentatively scheduled for Oct 10, but the government has requested pushing back the date,” the source says.
The Malaysian Communications and Multimedia Commission (MCMC) is said to have recently approved 12 new FTA TV channels, bringing the total number issued to 43.
The higher number of licences is good news for MYTV, given that its chief commercial officer Haniza Ros Nasaruddin had been reported as saying that it aims for 30 channels to come on board in order to break even within five to seven years from 2014, which was when it received the 15-year concession from MCMC.
But given the lower transmission fees, the timeline to break even may have to be extended, and it may need to get more channels than it had targeted.
Assuming the transmission fee per SD channel is lowered to RM9 million — at the high end of the seven-figure range — it is still 25% less than the RM12 million suggested earlier.
Revising the fees for HD channel transmission is trickier. In January last year, Haniza told The Edge that the bandwidth required for HD was three times more than that for SD, meaning the RM25 million asked by MYTV was already at a discount.
“As such, MYTV is looking to charge broadcasters based on the (HD) channels’ bandwidth requirements. A channel dedicated to sports programmes, for example, would need more bandwidth to properly capture the swift movements and details in the visuals, compared with, say, a drama,” says the source.
Some media players have compared MYTV’s transmission fees to Thailand’s — given the proximity and similar technology employed — which is around THB58.8 million (RM6.8 million) a year.
According to sources, the business model in Malaysia is different from that of Thailand’s digital terrestrial television (DTT), given that the latter’s six incumbent broadcasters had to fork out over THB16 billion each for the infrastructure.
The Thai DTT broadcasters also needed to bid for spectra in 2013, which raised about THB39.65 billion for 24 channels in SD and HD.
Meanwhile, an industry source notes that of the 12 new channels approved by MCMC, five were allotted to Enjoy TV Holding Sdn Bhd — a new company owned by film executive Datuk Yap Tin Sang — which already has an eponymous Chinese-language home shopping channel on Telekom Malaysia Bhd’s HyppTV.
Another two were awarded to an entity named Borneo TV, which is run by former Media Prima Bhd executives, including Datuk Seri Farid Redzuan, a former group CEO of television networks at Media Prima, who is now a communications adviser to Prime Minister Datuk Seri Najib Razak. Its programmes will cater for audiences in Sabah and Sarawak.
Of the remaining channels, one went to Kumpulan Media Karangkraf Sdn Bhd to air the television version of its Sinar Harian publication; three to Broadway Media Sdn Bhd, the content distributor for Astro Malaysia Holdings Bhd’s Indonesian-centric channels Bintang and Pelangi; and one to a new player that currently supplies content to state-owned FTA TV stations AlHijrah Media Corp and Radio Televisyen Malaysia, says the source.
Incumbent broadcasters will get 26 channels in total: nine each for RTM and Media Prima, six for AlHijrah and two for Bernama.
The source notes that this does not mean all the 43 approved channels will go on air. “Depending on their business strategies and financial standing, they might not use the licences they get.”
For instance, Enmedia Ventures Sdn Bhd — the company behind Bloomberg TV Malaysia and owned by former minister Tan Sri Mohd Effendi Norwawi — has been granted five licences, but may end up broadcasting only two, the source says.
It has been reported that a number of people have left Bloomberg TV Malaysia, after Astro stopped broadcasting its programmes on Channel 519 in July.
Star Media Group Bhd has also applied for three licences, and entertainment group KRU Studios Sdn Bhd has thrown its name into the hat as well.
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