TVB officially launches its myTV SUPER on 18 April
It is an OTT service to win viewership and ratings with a target of achieving1.4m screens by November 2017. The services are offered through 2 ISPplayers namely Hutchison and Hong Kong Broadband. According to HKBroadband (1310.HK NR), it has signed up over 30,000 subscribers and itexpects a similar rate every month. The box is also available on sale atconsumer electronics retailers in HK. The myTV SUPER box and app offer abasic package and premium offers with a bundle of 31 linear channels,including playback of content broadcast within three hours. The VOD serviceprovides over 11,000 hours of programmes ranging from premieres to classictitles including TVB’s self-produced shows, Asian dramas (including some fromATV) and a variety of American dramas and cartoons, etc.
ViuTV – reaches highest rating of 8 points on debut
Meanwhile, Viu TV (PCCW 0008.HK NR) was officially launched on 6 April. Itannounced that on its first day, it had an average TV rating (7:30 pm -12:30pm) of 5 points (each point is around 65,000 viewers) with the highest being 8points. This is based on preliminary data from Nielsen. It will release official TVratings from 4 May.
Based on the TV rating data from the press, TVB’s TV rating declined by ~1-2points last week during prime time (when it shows its 3 home-made dramas).
Deutsche Bank’s view
In our view, we believe advertisers will need a longer series of TV rating databefore placing higher advertisement budget for new free TV channels. Inaddition, as audience also watches programmes through apps, we believethere is a need for rating agency to provide a more sophisticated ratingsystem. Currently, it seems ViuTV has gained TV rating in its initial round fromTVB as well as the new audience. Whether it can keep these audiences and TVrating at a stable rate will determine its rate card.
ViuTV’s programmes have certainly created “topics” for discussion (some arepositive, while some are complaints) in social media and the press. By having anew player in the market, we notice free TV players are more active in bothexploring new business model and new themes/ideas for its programmes. Forreference, a third free TV player will offer its services in 1Q17.
We believe that the initial hit for TVB will be more competition, resulting inhigher operating costs with more content and technology investments (vs. costsavings in a tough market as in the past). We maintain Hold as we believe thatthe share price will be supported by its commitment to pay absolute dividend.