“Achieving profit is and will remain a challenge,” acknowledged Lam Swee Kim, chief marketing officer at dimsum, one of the small local operators, which claims around 1 million subscribers across Malaysia, Singapore and Brunei.
“The industry will need multiple revenue streams and payment partners to ensure that the business is sustainable,” he told scoutAsia Research, in remarks reported by the Financial Times. Dimsum itself has partnered with StarHub, the Singapore telco, and electronics giant Samsung in Malaysia.
“For all players, it will be tough if they keep dropping prices as consumer habits will be created and difficult to change,” Lam added.
Rival tonton ended its subscription service in August last year in favour of an ad-supported model. And earlier this year, Johary Mustapha, CEO of Forest Interactive, told Digital News Asia that there is widespread reluctance in Malaysia to part with money for content.
“The only exception to the rule here is Astro where people are willing to pay for its services,” he said.
Astro is the clear market leader, with a reported 5.7 million subscribers to its various services (including non-OTT options) but it is having to react to aggressive pricing strategies from competitors like Netflix, which at the end of 2018 launched a mobile-only service priced at less than half an Astro subscription; in response it now offers a “pay per view” option, with cheap passes available for as few as three days at a time.
Pricing is not only a competition factor, but has to take account of the fact that up to a quarter of Malaysian consumers are using modified TV set-top boxes to watch pirated content, according to recent research by the Asia Video Industry Association – behaviour that encourages them to end subscriptions to legitimate channels.
Sourced from Financial Times, Digital News Asia; additional content by WARC staff