Adds Netflix; new packages

  • From 9 Nov 2021, Astro Malaysia’s pay-TV subscribers can start streaming Netflix on their Internet-enabled set-top boxes. More will follow suit.
  • Astro also launched new subscription packages that give subscribers the option to subscribe with no tenure commitment.
  • We believe it would take time for Astro to restore goodwill among cordcutters; reiterate Add on its CY21-22F yields of 8.9-9.2%.

Enjoy Netflix and more from Astro’s decoders and Astro GO

On 9 Nov 2021, Netflix’s (NFLX US; Not Rated) eponymous streaming service was finally integrated into Astro Malaysia pay television service’s Internet-enabled set-top boxes and replica application Astro GO. Astro hinted that more apps will be included into Astro’s Ultra, Ulti, and Plug & Play Boxes and Astro GO over the next 12-24 months — from third-party subscription-based video-on-demand (SVOD) services to lifestyle and health related apps. Disney+ Hotstar will be made available through Astro’s Internet-enabled decoders sometime before year-end.


New subscription packages also announced

Also at the Netflix on Astro launch party, the group announced its new channel and streaming service packages. Astro’s legacy subscription packages were essentially built from a dizzying array of smaller packages that grouped channels of similar genres. The new packages are priced higher as they have more channels built in from the lowest tier, and Astro upsells them with streaming services — which is what it says consumers are demanding for these days. The higher the package tier a subscriber signs up for, the more streaming services will be available. Subscribers will get to merge their existing Netflix accounts with Astro’s to enjoy a lower total subscription price. The new subscription packages come with options for no tenure commitment or a one-year contract period, whereas the legacy ones came with a standard two-year contract. However, Astro will entice its subscribers to sign the contract by offering rebates.


Reiterate Add

Astro said many of the new initiatives were made to address feedback from an exhaustive amount of focus group discussions. The group already said it would rejig its subscription plans at its 2QFY1/21 results call. While we did not know how the new plans
would be like then, we had already imputed higher average revenue per user (ARPU) assumptions for FY1/22-24F, which translates into a 2.8-13.6% yoy growth in FY1/22- 24F subscription revenue. We anticipate that the average subscription would be higher with new streaming services coming in. Astro had already said it would bring in 15-or-so SVOD services by end-FY1/23F. Even when this exercise is completed, we believe it will take time for lapsed subscribers to realise Astro’s value proposition. As such, the stronger subscription revenue growth may only come after our prevailing forecast period, which ends in FY1/24F. For now, Add Astro for its CY21-22F yields of 8.9-9.2%. Downside risk: lapsed subscribers obstinately sticking to piracy.