Next Step diversifies to ride HD trend
With more television viewers switching to high-definition (HD) services in order to enhance their viwing experience, Next Step is diversifying its business from content provider into platform operator.
It has an ambitious plan to sell 2.25 million set-top boxes for the KU-band satellite-TV market in the next three years.
"HD satellite-TV technology was actually launched internationally seven years ago, but now it is worth it for us to jump into this business, as the prices of HD satellite boxes have become more affordable," Amornphat Chomrat, managing director of Next Step, said yesterday. Under its diversification strategy, the company is partnering with InfoSat – a local satellite-TV manufacturer and distributor – to supply satellite-TV set-top boxes.
The company is also investing Bt5 billion to hire 12 satellite transponders on the US Intelsat satellite under a 10-year contract, as well as spending on new content development and buying.
The project is run under a subsidiary named Freeview HD, which is overseen by Next Step’s Philip Heussen, who is assistant to Next Step’s managing director.
With a strong distribution network and InfoSat’s skilled installers, Next Step targets selling 500,000 Freeview HD set-top boxes in the first year of the venture’s operation, and 2.25 million within three years.
Heussen said that free-to-air satellite-based TV penetration in Thailand, mainly via the KU band, amounted to 5.1 million households, representing 23 per cent of the households around the country.
Currently, viewers watch free-TV channels, including digital terrestrial-TV channels, mainly via standard-definition satellite-TV set-top boxes.
"HD content is playing a key role in broadcasting business. Following this trend, the old-technology satellite-TV receivers should be replaced by HD set-top boxes, and this presents a huge opportunity for our company," Heussen explained.
On the Freeview HD platform, customers can watch up to 111 channels, including 40 HD channels, he added.
To comply with the "must-carry" rule, implemented by the National Broadcasting and Telecommunications Commission, the company will also provide 36 terrestrial-based digital-TV channels, including 10 HD channels as well as top-rated satellite-TV channels.
Next Step expects to break even on its diversification venture within five years. In terms of competition, there are only two key players, Thaicom’s DTV and IPM TV, said Heussen.
TrueVisions – the country’s leading pay-TV operator – CTH and GMM Z are not direct competitors, as the company is targeting middle-income earners wanting to watch free-TV channels, and not those seeking pay-TV service, he stressed.
In response to this development, Birathon Kasemsri Na Ayudhaya, the head of commercial and business development at TrueVisions, yesterday agreed that consumers needed to replace their old satellite set-top boxes with cutting-edge ones.
"Even though the market for satellite-TV receivers in the Kingdom reflects high competition, mainly thanks to the number of local manufacturers and distributors, there is still more room to grow, particularly in the replacement market," he added.
