The TV broadcasting industry in Malaysia is set to enter a new era. There are a number of new developments that have transformed the industry. Primary among them is consolidation of free-to air channels,entry of new pay-TV players that mark an end to monopolistic situations and moves toward greater digitalization. The development of new delivery platforms such as mobile also marks an eventful phase for the industry.

The much talked about consolidation refers to integrated media investment group Media Prima Bhd’s acquisition ofntv7 and Channel 9 last year. Natseven Tv Sdn Bhd or ntv7 was Malaysia’s third private free-to-air station and had a significant audience base. With this acquisition, the channels that come under Media Prima group include TV3, 8TV, ntv7 and Channel 9. Also there were two new pay-tv stations- MiTV and Fine TV launched in Malaysia last year and they are expected to break leading pay-TV player Astro’s monopoly.

“The consolidation of all private free to-air television stations under one media corporation, which also houses two FM radio stations and a major newspaper group, creates the opportunity for greater awareness on the advantages of media bundling,” says Azran Osman-Rani, director of business affairs, Astro All Asia Network plc.

He is not too off-the-mark. In March this year Media Prima introduced an integrated cross-sell and cross-market campaign to propel its advertising revenue by combining its network of television and radio stations with its print subsidiary, The New Straits Times Press (Malaysia) Bhd (NSTP). The Media Combo packages campaign seeks to attract advertisers to tap its four television networks, two radio stations and NSTP’s stable of publications.

Terming the development as a “winwin solution” for advertisers, the company shares, through a single platform, a consumer base consisting of 11.2 million television viewers, 6.8 million newspaper readers and 1.9 million potential listeners. Initially, the packages are being targeted at three key markets - property, technology and corporate clients - with the price of customized packages ranging between US$16,100 and US$94,200.

Media consolidation and production houses

Lina Tan, managing director, Red Communications talks about the implications this consolidation might have on local programming, “The stations now no longer compete with each other; they compete with other media like print for ad sales. Malaysia is one of those rare countries where print records a higher ad sales than TV so I think the biggest challenge for Media Prima would be to attract viewers to television and it seems that they intend to strengthen local programming with more commissions for new programs.”

But not everyone is delighted. “The consolidation isn’t really helping the production industry as Media Prima will try and push prices down. The new MiTV platform is still very much in its infancy and rumors are that the subscriber base is still very low,” says Nick Lyons, executive producer, Ciku Media Sdn Bhd.

Cindy Ng, director of operations, VHQ Post is also skeptical. “There is no doubt that the market is still extremely active with fairbit of activity seen in TV and commercial areas. However, this activity is not translating into higher revenues for most companies. This is due to a competitive marketplace and the government’s lifting of MIM (Made in Malaysia) ruling. Also the continued emergence of new production houses, many of which are fresh start-ups that take advantage of cheaper electronic and computer driven production equipment. From our point of view the new trend is where time is the new currency i.e. to ensure speed in the completion of jobs, without sacrificing creative qualities.”

The MIM rule that she alludes to made it mandatory for television commercials in Malaysia to be almost entirely home produced. Filming, film processing and all post-production work had to be done in Malaysia, and the TVCs had to feature Malaysians - although an exception was made for commercials promoting overseas tourist destinations. The rule also stipulated that at least 80% of total production costs had to be spent in Malaysia. But now the lifting of MIM has left the local production houses open to foreign competition.

Tan however, has a different take on the issue. “I think there will be more emphasis on good local programs as there are now only three companies actually vying for audience ratings - RTM, Media Prima and Astro. So the competition will get more heated and I think there will be emphasis on programs that can draw in the mass audience,” she says.

Quality of Content

Demand for quality content on new platforms is likely to rise as a result of new developments and this might have a big impact on television production in Malaysia. Even though there is much excitement in the air the local production and post production houses are approaching the new developments with caution.

Ng says, “While these are indeed exciting times with the materialization of HDTV (High Definition Television), it is also important to note that the effects of these new platforms actually take time to filter down. Malaysia is still a developing arena for contemporary media. Digital TV in Malaysia is reported to start in September of this year with a one-year pilot project in the Klang Valley area, with plans to have further HDTV trials in 2009. The aim is to eventually cease all analog services by 2015. So there is still some way to go before HDTV is fully implemented in Malaysia. Having said this, we have been upgrading our machines and infrastructure backbone to become HD capable to better prepare ourselves.”

Lyons says, “HDTV has arrived in this country but not everyone is compliant yet, and it will still take a couple of years for everyone to be on track. There is the infrastructure and costing to take into consideration,” he says.

The Malaysian government had announced last year that it will start its trial run for digital television with an initial funding of US$ 20.4 million in September 2006. The funding allocation would allow RTM to buy digital equipment for its transmission centre as well as the digital TV transmitter system. The trial will start in the Klang valley and then expected to go nationwide after a year.

Broadcast industry veterans like David Gunson, senior vice president, programming and broadcasting, NGC Asia see the new developments in a different light. “The Malaysian media industry is just getting exciting and we are only at the tip of the iceberg. We are seeing all these developments as the market matures and evolves to sophistication,” he says.

Experimentation among

production companies Even though consolidation might mean different thing for different people one thing is for certain- that the quality and variety of programs in Malaysia is all set to change.

Lyons comments on this trend. “Production work in television still hasn’t changed much from previous years, but one noticeable trend is that production companies are willing to experiment with many new ideas this year, and not buy tried and tested formats,” he says.

In terms of genre, reality shows continue to be in the news. “The highlight this year are programs that can be interactive for the audience, where snippets can be seen on 3G mobile. I think all programs in the future must come with interactive elements and some form of on-air contest or on-ground activation. TV has to work together with other media and also involve the audience on many levels,” says Tan.

The pay-TV market is also witnessing changes and that might affect the business of production and post houses. On its part, Astro has recently announced several new ventures that will assist in creating and aggregating quality content, both locally and regionally.

Astro also plans to substantially expand its platform and content businesses beyond Malaysia. The company calls its growth content-driven. “Our subscribers subscribe to Astro for the attractive choice and variety in content including our locally-produced programs,such as gameshow Roda Impian and talent programs Astro Talent Quest, Astro Vaanavil Paadalthiran Potti and the popular reality-based Akademi Fantasia.”

New technology

Another important trend that seems to be emerging in the Malaysian production industry is the use of new technology.

Ng says,” Expertise levels among the new generation of creative people are growing stronger, equipment is becoming more accessible and audiences are becoming more demanding. We have been in this business long enough tounderstand that it’s more than just staying abreast with changes. Staying ahead of the pace is our mantra, in order to break new grounds in both technical and personal advancements.”

3G license for MiTV

There are other developments taking place in the broadcast industry. The new player MiTV, which has recently bagged 3G licenses along with TTDotcom Sdn Bhd, is gearing up for mobile broadband solutions and has entered into strategic partnerships with Content, Application and Service (CAS) providers and Mobile Virtual Network Operators (MVNOs).

MiTV believes that entering the 3G markets is a “natural progression” from its current Interactive-TeleVision (interactive TV) business built on the company’s technological capabilities to expedite smooth delivery of multimedia IPTV content using a homegrown, wire it less IP-overâ€"UHF technology. Commercial operations of MiTV’s Interactive-TV service began officially in September last year.

Towards the end of 2005, MiTV had shared its plans of releasing a much lower-priced version of its set-top-box costing US$107 in early 2006. To make even more affordable to a wider spectrum of the households in Malaysia, the monthly subscription rate was to be reduced to US$8, with no plans to review until 31st December 2007.

MiTV is also pursuing its plan to increase the number of channels to 50 in early 2006 and to 70 after that. “With the latest content and marketing strategy, MiTV is expected to break even with 700,000 subscribers in 2008,” stated the company.

Of the 41 channels introduced by MiTV last year, many are international channels. These include MGM (classic movies in English), Fashion TV, Trace TV, VH1 (from MTV), MTV Indonesia, MTV Mandarin, MTV India, and CCTV 9 (Chinese news in English), Arirang, KBS World from Korea and TV5 (French). Other regional channels are from Indonesia, Thailand, and Philippines.

The bouquet also included eight Indian channels of various genres in Tamil, Malayalam, Telugu and Hindi. The company had said the content suite covers a broad spectrum of genres, including news, general entertainment, dramas, movies, music and lifestyle.

New platforms

Among pay-TV broadcasters, NGC Asia’s Gunson says,” We will not be available on any new platform. We’re confident that the long-term outlook for Astro remains strong. We’re looking forward to Astro’s upcoming launch of its new satellite that will offer advanced features and engage audiences and enhance the television-watching experience.

We now have more opportunities to offer exciting new channels, value-added services and choices for a multi-segmented subscriber base.”

“Astro has been doing a great job in Malaysia for the last 10 years â€" top management team, strong brand affinity, high quality channels, aggressive marketing contributing to healthy subscriber growth, and a new satellite that promises to add new services and channels for viewers. Any new player who wants to enter the market has to seriously consider all these factors,” he says.

Gregory Ho, vice president, ad sales, SPE Networks’ also says AXN is committed to its partnership with Astro and looks forward to growing with Astro in Malaysia and beyond.

Ho feels pay-TV channels such as AXN have their own demand as terrestrial TV, and pay-TV serves different viewer needs.

CNBC Asia’s Gregg Creevey, senior vice president, sales, marketing and business development considers added and alternate delivery platforms â€" i.e. more pay-TV, broadband and mobile platforms as opportunities for growth. “Currently, Astro, Maxis and Celcom are our distribution outlets in Malaysia. We welcome as many opportunities as possible to distribute our content and promote our brand.”

Mr Creevey says, “I think that the most growth for the broadcasting industry will come of f the back of digitalization. It would be good to see greater expansion of broadband in Malaysia. Malaysia does not currently have a strong broadband story, but if its broadband penetration levels can be increased, a myriad of content distribution opportunities will follow”.

Astro’s Osman-Rani says the proliferation of new int eractive media platforms, such as mobile TV, has also been a major development in the local TV broadcast scene. “Although we have been fairly familiar with the interactivity feature of TV viewing in recent years, the introduction of 3G brought a new dimension to TV broadcast as it provides content providers an alternative channel of distribution.”

“There is plenty of room for growth in the Malaysian TV broadcasting industry, and most would be content-driven with focus on local and localized content. Much can be done to encourage local development of creative skills and intellectual assets, such as greater incentives from the government for content development in the local market as well as for export,” he says.

Gunson adds, “Malaysia has a vibrant television industry and very talented documentary producers and directors. Malaysian government could partner with top broadcasters like the National Geographic Channel in co-production deals to produce “Made-in-Malaysia” programs for global distribution. It will go a long way to spur the television industry in Malaysia to an international level.”

“The national digitalization initiative as announced by the government will raise the standard of broadcasting in Malaysia and is in line with the global trend towards digital terrestrial TV broadcast. The key will be in choosing technology standards and operating models that will drive viewer take-up through efficient use of capital expenditure,” says Osman-Rani.

Ho says, “We would like to see the bulk of the US$20m going into creation of TV contents. DTV is the future and US$20m funding is a good start for Malaysia.”

Creevey feels the digitalization is a move in the right direction, but not a significant investment, when compared to what other governments in the region are investing into their broadcasting and new media industries. “The world is going digital at a tremendous pace, and Malaysia, which has so much promise, should not be left behind. So, while I think that this is encouraging, the Government could do more to promote an advanced digitalization in the country,” he says.

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