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Pay TV operators target low-end markets with Prepaid TV Services

Oct. 21, 2013, 9:41 p.m.
Khin Sandi Lynn, Industry Analyst

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The pay TV market has been witnessing growing competition over the past few years, especially in markets with a higher pay TV penetration, which have experienced a slower growth in subscriber base. Market maturity, increasing competition from alternative online TV services and uncertain economic situations are among the factors contributing to the slow subscriber growth. Pay TV operators have been finding ways to maintain the subscriber growth. Recently, pay TV operators such as TrueVisions from Thailand, Comcast from the U.S. have announced prepaid TV services as one of the churn reducing strategies. Prepaid TV customers will need to buy a set-top box and the basic package upon subscription for the first time. At the end of initial subscription period which is normally one month, customers are can decide to continue or stop the service.

TrueVisions and Comcast are not the first operators which offer prepaid TV services. DTH operators such as Airtel from India, TopTV from South Africa, Cignal and Sky Cable from the Philippines and DirecTV in Latin America have been offering prepaid TV services. The operators are currently targeting low-end income segment of the markets.

No long term commitment, flexibility, and the ability to manage the monthly cost are the key factors of a prepaid TV service in attracting customers. Prepaid TV service gives options to customers who would otherwise leave for higher cost, post-paid services. Besides, customers can get the services only for the period they need, for example, sports seasons or other periods of special events. ABI Research expects that prepaid TV services are likely to help traditional pay TV operators to expand their market penetration and revenue generation.