Astro sees 1% dip in revenue, to invest more in vernacular and regional content

Astro Malaysia Holdings has recorded a revenue of RM5.53 billion for the year ended 31 January 2018 (FY2018), a 1% drop year-on-year (yoy).The company saw a 2% yoy increase in ad expenditure to RM722 million for FY2018, including digital ad expenditure which jumped by 17% to RM35 million. This resulted in TV and radio forming 44% and 74% of the ad expenditure respectively. According to the financial statement, Astro expects this trajectory to continue with focused efforts on offering solutions to both agencies and advertisers alike, driven increasingly by customer personal data.Astro's content cost for FY2018 was RM1.6 billion, forming 33% of its TV revenue. In light of global competition, Astro renegotiated key international content to ensure it aggregates choice content for consumers to ensure savings, the report said. At the same time, it reinvested the savings by deepening its commitment to vernacular and regional content, particularly in signature, premium local and Nusantara intellectual properties (IPs). This is because these products help Astro "clearly differentiate" its product proposition against global competitors.It boost its content, Astro has partnered with local and regional companies such as Grup Majalah Karangkraf and Emtek, as well as award-winning directors and producers, including Ifa Isfansyah and Salman Aristo from Indonesia. This resulted in the production of key original content for IPs for ASEAN viewers such as 3 A.M. Bangkok Ghost Stories, Gantung, Do[s]a and DoorsIn 2018, Astro will further strengthen its position as the home of sports with the live broadcast of the 2018 FIFA World Cup Russia, Gold Coast 2018 Commonwealth Games, Jakarta 2018 Asian Games and the 2018/2019 Premier League season in August. To amplify live sports conversation among Malaysian fans on social media, Astro has collaborated with Twitter to provide sports clips and content on Stadium Astro’s twitter account.Dato’ Rohana Rozhan (pictured), Astro's group CEO, said the media landscape is undergoing an "aggressive shift" towards digitalisation. In FY2018, Astro accelerated its transformation to complement and enhance its skills, agility and capabilities as a consumer and content company.She added that Astro "executed strongly" on key imperatives to transform the company into a digital and data-driven company. This is in a bid to optimally invest and monetise Astro's media assets, to achieve cost efficiencies through scale and best practices, to build on customer engagement by deepening its strengths in vernacular verticals, as well as to build a robust innovation pipeline."Last year’s results were a culmination of this focus, delivering record profitability, even as revenue came under pressure given soft consumer sentiments and competitive headwinds," she said.Meanwhile, Astro witnessed a 7% yoy increase in customers to RM5.5 million for FY2018, with an increased TV household reach from 71% to 75%. This was primarily driven by Astro's satellite TV service NJOI. At the same time, NJOI's revenue grew by 21% yoy to RM100 million, as skinny bundles and a la carte prepaid choices gained traction.Rohana Rozhan said that contrary to expectations in the era of cord-cutting, Astro is witnessing "deeper engagement" with customers across all media assets, from TV and radio to digital properties. She added that the number of households with personal video recorders increased by 59% yoy to about 804,000, and they are watching an average of 50 hours of content weekly. Those consumers have also downloaded 23 million on Demand programmes in FY2018.As Astro GO and NJOI Now apps provide consumers with content mobility, the number of registered users for Astro GO increased by 45% yoy to 1.6 million. According to Rohana, this gives Astro the ability to "optimally market" and monetise innovative products and services personalised for households, individual customer personas and advertisers.Meanwhile, Astro's regional online video streaming service, Tribe, witnessed a 312% growth in total installs yoy to 3.1 million in Singapore, Indonesia, the Philippines and Thailand by forging complementary win-win partnerships in the region. To accelerate scaling up its user base, Tribe collaborated with Indonesian mobile operator Telkomsel to offer Tribe as a bundled product to its VideoMax subscriber base. The partnership will give Tribe the opportunity to tap into Telkomsel’s user base of over 170 million, with 60 million mobile data users.Additionally, Astro's home shopping channel Go Shop grew 11% in revenue to RM290 million, with the number of registered customers increase by 38% yoy to 1.3 million in Malaysia and Singapore. This was predominantly driven by marketing campaigns across digital and social media platforms.Go Shop also introduced innovative programme formats such as live demo shows by celebrities and short-form digital content, to widen its appeal to more audience segments. It will also launch more premium curated products, exciting new programmes and partnerships to further spur growth.Talent management at AstroAstro will continue to hire talent with requisite skillsets in focus areas such as data science, analytics and cloud computing. This is in a bid to address the need to boost the process of upskilling, reskilling and retooling its human capital.The company is reinvesting in its people, where over 1,200 of its talents have undergone the Certified Innovator Programme, run in conjunction with Amazon, to inculcate a culture of agility and reinvention.Astro also aims to fully capture the potential of social influencer talent through its influencer marketing arm, Rocketfuel Entertainment, which manages over 100 influential personalities in beauty, fashion, lifestyle, automotive and parenting across ASEAN. Rocketfuel aims to leverage on Astro’s talent pool and expertise in content creation to meet advertisers’ growing demand for talent-driven digital content regionally.Plans for 2018Astro aims to deliver growth by seizing opportunities to enhance its customer experiences whilst aligning its investments and media assets to optimise resources. Its key focus will be in reclaiming the premium experience for customers at home and seamlessly on the move, a push for commerce, as well as a focus on signature vernaculars in particular Malay and Nusantara."There will be a renewed obsession on the different customer personas backed by investments and skills, we aspire to serve, backed by dynamic data and analytics," Rohana said, adding that all these will be the focal point of all teams from customer to technology and content.