Market Insight

Hong Kong's TVB launches OTT service, myTV SUPER

April 18, 2016  | Subscribers Only

Kia Ling Teoh Kia Ling Teoh Analyst, Advertising & Television Media
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Hong Kong’s leading free-to-air broadcaster TVB has launched a subscription-based over-the-top (OTT) service, offering live streaming of 20 channels and an 11,000-hour library of content including classic dramas from TVB and acquired programming from South Korea and Japan. Branded as myTV SUPER, the new service launched on 18 April and will be available on TV set-top boxes and mobile devices. The basic rental fee for the set top box is HK$68 ($8.80), and the minimum monthly charge for the mobile app is HK$38 ($4.90). It is also available via a bundling deal by subscribing to the broadband internet services provided by Hong Kong Broadband Network; set top box and mobile app are offered under a single package with three pricing structures for different speeds of broadband. 

TVB has made a nine-digit investment in the new service, which it hopes will break even in two to three years. If the service succeeds in its home market, it will expand to other parts of Southeast Asia, where there is a large Chinese-speaking community.  

Our analysis

TVB has launched myTV SUPER to counter declining TV viewing and fierce competition from OTT services available in Hong Kong. The broadcaster is also facing a new rival in the TV market in the form of Viu TV (owned by telecom giant PCCW), which replaced  ATV, which lost its licence. The fledgling broadcaster took the market by storm when it introduced an OTT platform in October 2015, before its free TV went on air. The service was subsequently rolled out to Singapore, Malaysia and India. Also under the PCCW Media’s umbrella, mobile video platform Vuclip had already garnered more than eight million subscribers in 10 markets and pay TV arm NowTV had more than 1.3 million subscribers as of March 2016.

Decades long of battles with the struggling ATV resulted in TVB controlling 70% of total TV advertising revenues in Hong Kong, according to IHS. However, there are no grounds for complacency as the broadcaster reported a 9% drop in TV advertising revenue in 2015, estimated to be HK$3.1 billion ($400 million). IHS believes that it is crucial for TVB to revise its content strategy, to either continue what it is good at - drama series - or to reinvent (and diversify) its library.

TVB’s massive programming library consists mostly of drama series, some of them evergreen programming which are familiar to most of the Chinese-speaking community in Asia. Conversely, young and ambitious Viu TV has plans to diversify content offering by showing sports (including coverage of Spain's La Liga), news and variety programming

Sports programming is offered by competitors including China-based online video platform LeEco and Hong Kong-based sports programmer All Sports Network (ASN). LeEco (formerly LeTV) has invested heftily in rights to English Premier League and World Cup football. All Sports Network whose sports channels are carried by NowTV, recently inked a deal with Time Inc.’s Sports Illustrated to develop a sports broadcasting and digital network across Asia this spring. Netflix was made available in Hong Kong in January this year, though the company is still trying to tackle programme rights barrier in the country.  

The biggest worry for TVB is not the loss of eyeballs from its terrestrial TV channel, but its leadership in the content market. Viu TV is reported to be planning to spend HK$2.7 billion ($348 million) on original programming over the next decade. In order to retain its audience, TVB must now create compelling programme and compete with rivals on both linear TV and new platforms.  

Organization
Netflix PCCW TVB
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