Astro to defend pay-TV subscriber base

KUALA LUMPUR: Astro Malaysia Holdings Bhd, which saw its net profit for the fourth quarter ended Jan 31, 2017 (Q4) fall 29.5% year-on-year, is set to defend its 3.47 million pay-TV customers by growing its value proposition following a soft FY17.

Astro is targeting a 6-8% jump in revenue for FY18, which group CEO Datuk Rohana Rozhan said will be driven by an increase in average revenue per user (arpu), surge in subscription-free TV service NJOI, higher prepaid products, higher advertising expenditure (adex) and its home shopping network Go Shop.

“We will defend our 3.4-3.5 million pay-households and sell more value-added products to premium households. That is predominantly going to drive the arpu this year from RM100.4 to RM103, driven by premium customers buying more products like Astro First, Astro Best and Astro On Demand products,” she told a press conference after announcing the group’s FY17 financial results yesterday.

In FY17, Astro’s subscription revenue dropped RM5.1 million due to a decrease in pay-TV subscribers, offset by an increase in arpu.

She said premium pay-TV customers are expected to increase their spend, while growth from the NJOI base will also see more spending via impulse prepaid services, resulting in Astro getting a bigger share of the adex market.

“We’ll aggressively defend our pay customers and we will also make a concerted decision not to over invest in subsidies for (set-top) boxes in a soft consumer year. There is no point in us seeing new customers if they cannot sustain the subscription.

“We’re happy with the 3.4 million household level for pay customers and all other customers will come in via NJOI,” explained Rohana.

She added that in Malaysia and the region, Netflix and iflix are less of a threat to Astro than pirated aggregators of content.

“Netflix and iflix are helping us condition the customers to understand that content is premium. When you aggregate a good experience and put through premium content, it’s worth a pay model,” said Rohana.

Astro’s Q4 net profit fell 29.5% to RM145.08 million from RM203.77 million a year ago mainly due to higher net finance cost and decrease in earnings before interest, tax, depreciation and amortisation (ebitda). Revenue was flat at RM1.4 billion mainly due to a decrease in subscription, home-shopping and other revenue.

For FY17, its net profit rose 1.5% to RM623.68 million from RM615.32 a year ago, mainly due to lower depreciation of property, plant and equipment, and lower net finance cost.

Revenue jumped 2.5% to RM5.61 billion compared with RM5.48 billion in the previous year due to an increase in advertising home-shopping and other revenue.