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December 10, 2009

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Revenue Loss and Opportunities in Asia

Mark Holmes of ViaSatellite recently tackled the latest issues around content piracy and theft of service in Asia. While analog cable systems are the biggest target for piracy, satellite pay-TV operators are certainly feeling the impact of service theft. Quoting the deputy CEO of CASBAA, “The nature of the satellite business is that it doesn’t respect national boarders, so one broken satellite system in one market can impact markets around it.”  Without dwelling on the negative impression given by statistics, Mark underscored the promise of a more comprehensive transition to digital distribution where operators across the region can recapture a significant revenue base. The potential is even more dramatic when the new opportunity for Internet distribution makes content available to those subscribers who live away from their home country. This hits a trend that we’ve been observing– Internet video is completely changing the way expats consume pay TV. Operators see an opportunity to broadcast local programming to expats all over the world. As you can imagine, this is both a huge revenue opportunity and potentially a devastating piracy challenge.

While some of these operators are rebroadcasting signals illegally, legitimate operators have the opportunity to enhance the subscriber experience with better quality and better selections of content. Asian operators have a special opportunity to service migrant populations and communities of temporary workers. To reinforce another point in the article, Asia represents a lucrative market for content security providers. Cost is clearly an issue in this often low ARPU region; however technology and rising awareness of service theft are changing security dynamics. Operators upgrading to digital have a more compelling desire to protect their programming assets, and more advanced layered security approaches are making revenue protection way more cost effective. Software-based content security is catching the attention of operators that are weary of the millions of cloned smart cards in the region. Software provides the flexibility to stay ahead of the hackers with renewable security and layered techniques like watermarking or fingerprinting. Even legacy smart card vendors are getting serious about software-based security. We are certainly excited about the opportunities in Asia as hybrid networks, enabled by IP technologies, are on the agenda of most major operators.

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