For Puncak Semangat success lies beyond TV
- Five Pillars sales movement key to its virtual TV sustainability
- Hopes to interrupt even on US$493mil capex spend in Year Seven
SELECTED to construct, function and control the infrastructure for digital terrestrial tv broadcast (DTTB) service in Malaysia for 15 years, Puncak Semangat Sdn Bhd gave its first media briefing on its plans on June 2.
And even as the briefing has laid to rest rumours that it had deliberate to get into the content sport and venture Astro Malaysia Holdings Bhd, it also served to highlight that its commercial enterprise version past collecting rent from broadcasters to deliver their content digitally, will be difficult.
This may be seen from the reality that of its 5 pillars sales move, three come from non-broadcast sources, particularly Connected Services, t-Commerce & Application Services and Soft Services (see desk).
These will be introduced via broadband and LTE (Long-Term Evolution) connectivity which suggests that Puncak Semangat’s set-pinnacle bins (STBs) may have a LTE modem embedded in them with the provider delivered by means of cell operator Altel Sdn Bhd.
Telekom Malaysia Bhd (TM) and Asian Broadcasting Network (M) Sdn Bhd are also practising this bundled technique of video and broadband.
Both Puncak Semangat and Altel are organizations beneath the stable of billionaire businessman Syed Mokhtar Al-Bukhary who additionally has pastimes in a number businesses from ports to postal to automobile to banking.
“Providing broadband through LTE will increase the fees up front of its STBs but it's far a enterprise danger Puncak Semangat has to make because the DTT version in Malaysia isn't always sustainable if one simply is predicated on sales from broadcasters,” notes a pro enterprise observer.
Indeed that is the view of all industry gamers, for this reason their eager hobby in how Puncak Semangat will execute pillars 3 to 5 of its sales circulate.
Puncak Semangat is speakme about enabling modern and destiny Content Application Service Providers (CASPs) and Applications Service Providers (ASPs) with superior offerings which includes subscription television and radio, video-on-call for, home purchasing, interactive video games, multi-lingual audio and categorized advertising and marketing.
These are also sales streams that TM is attempting to monetize thru its IPTV (Internet Protocol television) presenting HyppTV, albeit with limited success up to now.
Coincidentally, HyppTV is today (June 5) launching its e-buying channel within the hope of tapping into the e-commerce wave in Malaysia.
Revenue projections ‘now not plucked from air’
What’s exciting is that in spite of the hard monetization avenue in advance, Puncak Semangat is confident that it's going to hit challenge breakeven after seven years – by means of which time is expects to have spent US$493 million (RM1.6 billion) on capital expenditure (capex).
Elaborating in this, the corporation’s DTTB mission director Nik Abdul Aziz Nik Yaacob (p.c), who's additionally leader govt officer of Altel Sdn Bhd explains: “Our destroy-even length definition is when we have fine cumulative task coins go with the flow (project stage earlier than financing) which is in 12 months seven. This is while we assume to have high-quality cash-glide and hence destroy-even.”
Puncak Semangat executives assert that the commercial enterprise model is robust and its sales projections have long past via a sturdy strain take a look at and “are not figures simply plucked from air.”
The employer expects up to 30% of this US$493 million fee to be for the two million STBs that it's going to provide without spending a dime to what it terms as “poor” families.
Its projected total capex expenditure for the whole 15-12 months settlement length is predicted to hit among US$617 million to US$771 million (RM2 billion to RM2.five billion).
The million STBs also form a key a part of its monetization strategy past its yearly sales from broadcasters renting its channels to broadcast unfastened to air digital channels.
They are hoping that these million unfastened STBs, along side their reasonable commercially available STBs, will help them penetrate a massive portion of the 5.7 million houses with TVs that Puncak Semangat’s virtual TV alerts will cowl by using April 2015.
The discern money owed represents eighty five% of the full envisioned TV households of 6.7 million in Malaysia. It have to also be referred to that covering 85% of TV families with digital TV signals isn't the same as actually having Puncak Semangat’s STBs in the ones houses as its customers.
As a yardstick, it has taken pay TV operator, Astro, 20 years to reach a purchaser base of 3.five million residential TV clients or round 52% penetration of TV families.
Puncak Semangat is hoping that if it could fast reach a big patron base with its STBs, numerous content companies will need to attain this patron base to deliver their interactive and virtual offerings.
“More eyeballs will ensure that viewership critical mass is achieved and could allow different new operators [content providers] to use the DTTB platform,” explains Nik Aziz even as emphasising that Puncak Semangat is the infrastructure issuer and does no longer get involved in presenting the real services.
The business enterprise will even not get into the retail area itself, a circumstance of the contract it won.
Monetizing person information
Aside from hitting scale as fast as feasible, Puncak Semangat is also hoping with the intention to capture the viewing behavior of the families that use its STBs. It feels that it could sell this facts to advertisers to present them a much extra accurate knowledge of client viewing behaviour.
“We hope to influence the marketing companies to apply our records for his or her program scores as we would have greater ‘accurate statistics’ in preference to via sampling as practised with the aid of the mounted rating employer.
“The current sampling size is handiest 1,500 houses. But on DTTB we shall be capable of offer extra statistics which we feel is more reflective of the visitors viewing conduct,” explains Nik Aziz.
Its STBs can have sensors that could stumble on if viewers are looking a program or advertisement.
According to an industry participant familiar with how this works, Puncak Semangat has the capability to establish this sort of relationship with media organizations but there has to be a clear and unbiased third birthday party to validate the information it has gathered. HyppTV already practises this version.
“But you want scale,” notes the government. Which method, for Puncak Semangat to have any threat of assembly its revenue targets, it wishes to get its STBs into as many houses as feasible and as quickly as possible.
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