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Pay-TV competition heats up as royalties rise

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SCTV and K+ are planning to stop broadcasting foreign TV channels and replace them with cheaper ones. The move has faced strong opposition from subscribers.

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Nguyen Thanh Luong, deputy general director of national television VTV, told the press that television companies have had to cut off foreign TV channels as a last resort.

VTVcab, NextTV, SCTV and others, including K+, HTVC, MyTV (VNPT), OneTV (FPT), MobiTV (AVG), VTC and Hanoicab all had bought the right to broadcast international TV channels from Q.net. 

As the relations between Q.net and television companies worsen as the parties could not reach agreements on price, some television companies decided to say goodbye to Q.net.

The senior executive of a television company revealed that the royalties, including the pay for international sports tournaments, TV channels and programs alone amount to 80 percent of the total budget of the company. 

The expense has been increasing as the TV channel distributor has raised prices, about 30 percent per annum. 

Meanwhile, the number of subscribers and revenue of television companies has not increased. This has put a heavy burden on the companies, and they believe they need to cooperate to fight against the distributor’s monopoly.

Of 10 agents that distribute international TV channels, Q.net has the biggest influence. It distributes nearly 30 out of 58 foreign channels which are licensed to be edited and broadcasted in Vietnam. 

As every international TV channel is distributed by only one distribution agent, Q.net is the ‘godfather’ in the field.

Q.net now sells international TV channels in packages of 23 channels. As a result, television companies have to buy less-known channels they do not want.

The other nine distribution agents, including Thao Le, BHD and Fox, distribute remaining channels, but they are inferior to Q.net. When television companies terminate the contracts with Q.net, their clients will no longer be able to watch well-known channels such as HBO, MAX, AXN, Warner TV, Discovery, Fox Sports, Cartoon Network, Disney Channel and CNN.

Subscribers, who were angry as they could not continue watching favorite channels, have called for a ‘boycott’ of television companies which have cut off the services. 

If subscribers leave, the pay-TV market will see big changes in market share. 

Two years ago, SCTV led the market with 29 percent of market share as reported by Media Partners, followed by VTVcab with 24 percent. 

K+, MyTV and NextV each held 8-11 percent in a market with 12.5 million subscribers.

According to the Ministry of Information and Communication, the number of pay-TV subscribers increased to 14 million by the end of 2017. However, the revenue had decreased from VND12 trillion to VND7.5 trillion.

 

 

Source: VietNamNet

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