Highlights

Prologue… In order to grasp a better insight of TV’s future technology and gauge how this will influence eyeball behaviour, we had the privilege of having representatives from TM, Media Prima, Google Malaysia and Perception Media to share their valuable insights. Also present was Samsung with their latest Smart TV product showcase.

How Smart is it?… Smart TV today can be viewed as a Smartphone, but with a larger screen and resolution, minus the mobility function, while retaining the same embedded Internet connectivity features and computing ability.

Everybody can Broadcast… In the past, online video has been largely confined at the computer desktop. However, with the high speed Internet connection and Smart TV, online video streaming can now take place in the living room and also allow global reach for any producers.

Not Rocking the Boat… It is an open secret that content aggregators benefit from bundling cheaper content with those popular ones. Hence, we have been seeing content collaborations between producers, online aggregators and traditional broadcasters to avoid crossing into each other’s turf.

STB still Relevant?... STBs are proprietary hardware and control the availability of contents. It is usually perceived as the major entry barrier for new entrants into the Pay TV segment. With the computing abilities of the Smart TV, there is a likelihood for viewers to shy away from STBs and more competition from the online content aggregators.

DNA Elements… The “selfie” trend had the Device, Network, Application (DNA) print to become a worldwide phenomenon with the built-in Smartphone camera, mobile broadband, and Instagram. Hence, with Smart TV, high speed broadband, the question is whether Smart TV has the right application or services for online content streaming.

Content is King… Falling back to the basics, content is king. However, for Malaysia’s environment, the question is whether we can create a content that can cater for the global audience and ultimately monetise it.

Rating/ Valuation

Telecommunications (NEUTRAL)

The trend is inevitable towards online streaming and in the midst of the change and tussle between media owners and producers; the biggest winners are the fixed telco players.

We maintain BUY on TM with unchanged TP of RM5.82 while HOLD call on TdC with unchanged TP of RM4.03.

We are optimistic that both Astro and Media Prima are developing and localising their own content while embarking on various platforms to remain “technology agnostic” to retain existing viewers and capture new eyeballs.

Media (NEUTRAL)

We maintain our HOLD call for both Astro and Media Prima with a TP of RM3.02 and RM2.58 respectively.

Source:Hong Leong Investment Bank Research - 17 Dec 2013