Vietnam pay-TV in bloom

HONG KONG — With more than half of the 85 million strong population being under the age of 30 years, Vietnam’s subscription-TV business was given a boost at the CASBAA Vietnam’s Pay-TV Industry Seminar in Hanoi last week.

The seminar, themed “Pay-TV on the Rise”, brought together more than 200 Vietnamese government officials, international industry decision makers and media to have a 360-degree analysis of the Vietnam pay-TV sector, including business models; the channel licensing process; intellectual property rights; copyright challenges; the prospects for Cable, DTH, IPTV and content production.

Vietnam’s pay-TV sector is one of the fastest developing markets in the Asia Pacific. While it is a comparatively small market of just 4.2 million connections, including a two million strong DTT FTA platform; 2.1 million cable subscribers and just 200,000 DTH subscribers, the opportunities are immense as the industry focuses on the dual subscription and advertising revenue streams.

Certainly, with less than 10% cable-TV penetration, pay-TV operators must differentiate themselves from the 40 free-to-air terrestrial channels in order to gain more market share. This means offering more choices and premium content for the consumers, said Raymund Miranda, MD (APAC), Universal Networks International. “But we also have the chance to build a really firm base, not least in terms of audience measurement. If we can get that right today, we have so much to build upon.”

Of course, as in so many developing economies, pay-TV market development is being held back by signal piracy in Vietnam. According to CASBAA, the cost of pay-TV piracy in Vietnam in 2009 stood at US$15 million, up by 17%. For 2010 there is expected to be a substantial increase, at least in line with market growth.

During a panel session featuring Nguyen Hanh, President, Q.net; Annabel Archer, APAC Regional Counsel, Turner; Nguyen Thanh Lam, Head of the Editorial Board, VCTV and Manuel Rougeron, Executive Director, VSTV, the protection of intellectual property rights was highlighted as essential for a growth oriented pay-TV market, especially the need for clear legislation, transparent enforcement mechanisms, and finally, education for government, industry and consumers, all of these supported by the deployment of upgraded digital technology for content delivery.

According to Manuel Rougeron: “Regulators must ensure that the legal framework is truly robust supporting the 2009 copyright infringement legislation of 2009. It must also, most essentially, be transparent. Vietnam is now integrated into the world economy and the Vietnamese and international copyright regimes must be enforced together.”

According to several participants in the one-day meeting, with 70% of the population living outside urban areas, satellite services and DTH have a competitive advantage over other platforms in Vietnam. Le Thanh Nam, Vice Director of national satellite operator Vinasat, said the number of DTH channels in Vietnam has been growing rapidly from 20 to over 100, of which over 70% are transmitted by various platform operators via Vinasat.

However, other presenters such as Kevin Dickie, SVP, Discovery Networks AP; Gushi Sethi, Director of Affiliate Sales, Eurosport and Gregg Daffner, a Senior Advisor to EchoStar International, admitted that operating the DTH platforms would be expensive when driving Vietnam’s mass market. But just as importantly, as demonstrated by the hugely successful India market, digital DTH will be a genuine competitor for cable services, driving the digitization of cable systems.

Currently there are some 170 TV channels of all kinds in Vietnam, yet in the view of many industry players this is not sufficient to meet market demand, especially with audiences demanding a high level of content in their local language.

Thus investment in local language productions has been increased from hundreds of hours annually in 2006 to thousands of hours in 2009, according to Nguyen Hanh of Q.Net.

“Tapping into this opportunity, content producers should look for partnerships with international companies to increase value by offering more high-quality local films, creating a win-win situation,” said Ms. Hanh.

During a conference segment with Satpal Brainch, President, CNBC Asia Pacific; Chris Keely, VP, Distribution, MTV Networks Asia; Le Thi Phuong Thuy, Chairwoman, Tri Viet Media and Ngo Thi Bich Hanh, VP, Vietnam Media Corp., panelists noted there needs to be a significant improvement in industry skills, both technical and creative, if Vietnam is to fulfill its recent promise as a pay-TV market.

“This will be especially important if government moves to insist on full localization of international channels are to be even partially realized. We need realistic and viable financial models which work for a fully fledged partnership,” said Keely.

“The positive atmosphere throughout the CASBAA meetings with officials and the major industry players in Hanoi last week provided great hope for the future,” said Simon Twiston Davies, CEO, CASBAA.

“However such optimism must be tempered by a realistic view of the potential government restrictions on the number of international channels and the clear problems posed by the lack of intellectual property rights for both legitimate content owners and platforms,” said Twiston Davies. “Without a robust framework the years of domestic and international investment could be of little value.”