Astro Malaysia's queen drives ASEAN digital expansion
CHING YEE CHOO, Nikkei staff writer
KUALA LUMPUR -- Amid intensifying competition, changing consumer habits and new digital technologies, Rohana Rozhan, the chief executive of Astro Malaysia Holdings, believes that diversity in both product offerings and management holds the key to success.
On March 18, Astro Malaysia announced Tribe, the pay TV operator's latest digital offering. "Tribe is going to differentiate [us] because it's going to cater to fan bases," said Rohana.
Tribe is an over-the-top service, that allows consumers to download digital content without any viewing restraints from content aggregators or distributors. It debuted in Indonesia in partnership with Axiata Digital Services, a unit of Axiata Group, the Malaysian telecommunications group. It is expected to be launched in up to three Southeast Asian countries.
Tribe allows viewers to watch content anytime on smartphones or other devices. Tribe will offer live events such as sport matches as well as South Korean TV dramas and Asian films.
"I think we have slowly evolved," Rohana told the Nikkei Asian Review at her office in Astro's headquarters in the suburbs of Kuala Lumpur. The 53 year-old Rohana has seen the growth of Astro since its early days.
Dressed in pink and carrying a glittering pink smartphone, she is a striking figure in her black-paneled office decorated with an eye-catching caricature of her as a Game of Thrones-like character with a dragon perched on her left shoulder.
Nicknamed "Rohana the Piranha," a title bestowed on her by the neighborhood boys when she was a feisty young girl, she is one of Malaysia's top female corporate leaders, whose ranks also include Aireen Omar, the chief executive of AirAsia, and Nur Qamarina Chew Abdullah, the managing director of the local unit of Japanese retail giant Aeon.
Astro started as a direct-to-home pay TV service in 1996 and has since grown into owning radio stations, magazines, and film production companies. A year ago, the company added a home shopping business in partnership with South Korea's multimedia retailer, GS Home Shopping.
Before joining Astro, she worked for a decade at Unilever, the international consumer goods company, in the U.K. and Malaysia. Before that, she studied accounting and economics at the University of Kent, and later completed an Advanced Management Program at the Harvard Business School in 2006.
Although normally a fiercely private person, she gave a glimpse of what drives her in a speech accepting the Toastmaster's Golden Gavel Award in 2014.
She described how she fought as a child to stand equal among the boys in her hometown in Sabah state on the island of Borneo. "When you are young, you are quite arrogant. Thinking arrogantly that I am as good as any boy and as good as my brothers, I couldn't appreciate that they were sent to the U.K. at the age of 13 to pursue their studies whilst I was actively encouraged to stay at home to look after everyone and to consider becoming a teacher." She eventually succeeded in gaining a scholarship to study in the U.K.
She was the chief financial officer at Astro when the company was listed in 2003 as Astro All Asia Networks. In 2006, she was promoted to become chief executive at the media group's satellite division, MEASAT Broadcast Network Systems.
For the fiscal year ended January, Astro's revenue was 5.47 billion ringgit ($1.4 billion), up 5% on the year, and net profit was 615 million ringgit, up 18%.
The company delisted in 2010 following a buyout by reclusive Malaysian billionaire Ananda Krishnan and Malaysian sovereign fund Khazanah Nasional, but it was relisted at $1.5 billion in 2012 as Astro Malaysia Holdings. Today, Astro has a market capitalization of 15 billion ringgit.
Astro is now watched in 67% of Malaysian households. "In terms of pay TV market share, we have about a 95% to 96% market share so we are in a very strong position at the moment. In a couple of years, it wouldn't be a stretch to say that we will be at 80% [of household penetration]."
With traditional pay TV business seeing market saturation, Rohana expects Astro's free satellite TV service will play an important role to bolster domestic business. Astro has been offering free TV service since 2011 via a different set top box from its regular services. She estimated that the bulk of future revenue growth will come from it, as consumers evolve with the company and opt to consume content piecemeal or on a per program basis.
"We have every intention of growing the traditional business. But it's so much harder now to sustain our share of the customer wallet [and] most importantly, our share [of] our customers' time," Rohana said. Since the emergence of Internet services available on smartphones, TV's position as king of media has been significantly eroded. Tribe will allow Rohana to go head to head with new internet players.
In addition to dealing with increased domestic market saturation, Astro also must compete against other players using digital and internet technologies.
In Malaysia, other providers of OTT services include Telekom Malaysia's HyppTV, local startup iflix, global player Netflix and PCCW-backed Viu. iflix has expanded to Thailand and the Philippines. Meanwhile, Singapore-based HOOQ, which already operates in the Philippines, India, Thailand and Indonesia, is planning to enter Malaysia after it launches services in Singapore this year. India-based TV channel and content producer Zee Entertainment Enterprises has established itself in Indonesia and Thailand, soon to be joined by Philippines as part of an Asian expansion strategy.
McKinsey, the management consultancy, said that the availability of OTT often results in consumers cancelling their pay TV subscriptions, known as cord-cutting, or else subscribing to a smaller and cheaper bundle of personalized services, or cord-shaving. Both of these developments spell trouble for a traditional pay TV operator like Astro.
Rohana, who has been Astro's chief executive since 2011, is confident that Astro still has room to grow as it celebrates its 20th anniversary in September. Tribe is seen as a way to compete against OTT competitors while helping Astro grow in the region. "If you look [beyond] Malaysia, if we are going to make it, we have to do original local language differentiated programming, and we are going to have to do more of it. If we are going to do more of it, we need to find bigger scale."
She said that understanding shifts in technology and media consumption behavior is crucial to planning a future strategy. "All I need to do is to watch my son. By watching him, you can see how kids move away from that living room experience [of watching TV] with their parents."
She believes that tailored content is important to gaining local audiences. "If you take the Malaysian market, our view is Netflix is a complementary service to us. It is not in direct competition." She explained that Netflix's library largely consists of international programming, Astro offers programs in the languages spoken in Malaysia -- Malay, Chinese and Tamil -- as well as showing domestic live events such as sports. It plans to produce local language content for Tribe in other regional markets.
Astro estimates that its viewers spend five hours daily watching its programming, with 80% of that time spent on local language offerings. The company produces dramas, reality television shows and films in-house or in cooperation with local vendors. It is these existing capabilities and infrastructure that it is planning to use in expanding into other regional markets in cooperation with telecommunication providers. "If we do our jobs right, we will not have and pay for the content that Netflix has and paid for. We will focus on what they are not offering."
Even in the digital age, Rohana's approach remains the same. She emphasizes three factors: customers, content, and experience. She explained that her time spent at Unilever has helped her in understanding consumers in-depth. "We're no longer that young and with that realization comes a lot of things [like] consumption and how that shifts, we've seen [its] evolution." "We believe that in order for us to be sustainable, [and] to continue resonating with our customers, the best way is to simply reflect the customer base," she added.
The profile of the company's 4,700 employees reflects the ethnic make-up of Malaysia, with nearly half of the workers being Malay, 25% Chinese and 21% Indians. Almost half of them are under the age of 30 and workforce is almost evenly divided between men and women, with nearly 40% of the board of directors being female.
Rohana has sought to make Astro a diverse organization in order to become competitive in the region. "We are quite proud of the fact that it's not only about gender. We call it diversity and complementarity. Ultimately, my dream for Astro, is to basically respect the fact that each of us can bring something to the table."
For the Southeast Asian market, the test is to understand the needs of each local market and for Astro to differentiate itself in each one. "It is not a static one size fits all proposition at all. The reality is we [ask] what do we need to do [and] how do we reinvent ourselves to be part of that conversation [for the future] generation."