Piracy the major threat for Vietnam pay TV industry as tumbling revenues put quality at risk

Piracy remains the greatest threat to pay TV operators in Vietnam amid concerns that tumbling revenues are putting the production of quality content at risk.While international giants Netflix and Amazon are often portrayed as the major issue facing the sector, “rampant piracy” is the real danger, according to local pay TV services and the production industry.

In addition to the piracy concerns, the market has experienced a “race to the bottom” on pricing, with average revenue per user (ARPU) falling sharply.

The findings were contained in a report into the Vietnam pay TV sector issued by the Asia Video Industry Association (AVIA), formerly CASBAA.

AVIA said the industry is “deeply concerned about whether current revenues are adequate to sustain quality production”.

The reported depicted an industry that is fiercely competitive, but one struggling to deal with piracy. With the exception of FPT Play, the top five most watched over-the-top services in Vietnam are free, with “many of them known for offering pirated content”.

Far from getting on top of the issue, pirate OTT services “seem to be growing rapidly”, it said.

Furthermore, legitimate domestic OTT operators have “relatively thin legal offerings” and are “without strong commercial cases”.

“According to a local industry source, 95% of content on Vietnamese OTT services are pirated,” AVIA said in the Vietnam in View report. “Revenue for pirated OTT services comes from both pre-paid subscriptions and advertisements.

“While the Vietnam pay TV Association (VNPAYTV) plays up competition from foreign pay OTT services, legitimate local pay TV services and production industry are actually more concerned about rampant piracy in the OTT space.”

The director general of Vietnam’s Authority of Broadcasting and Electronic Information, Nguyen Thanh Lam, said it was the most important issue the industry and government needs to tackle. It was, he said, “determined to work with the industry to clamp down on egregious piracy website operators”.

Concern is also deepening over average revenues which have plummeted over the past two years. From a high of $44 in 2016, ARPU almost halved in 2017 to $24.17 before dipping further this year to $22.37.

The decline was a result of aggressive growth strategies “by every player” where subscriptions were subsidised, the report said.

Subscriptions climbed from 12.5m in 216 to 14m this year but total revenues fell from a peak of US$550m in 2016 to US$338 million, a 38% decline.

Rising costs of premium content coupled with falling consumer ARPU’s are “creating severe tensions”, the report added.

Meanwhile, despite concerns of the Vietnam pay TV Association, international OTT services have a “statistically insignificant share”, in addition to “facing regulatory uncertainty with the government floating proposals for licensing, and censorship of international services”.


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