Loss for Astro should Disney shut its TV channels in SEA

KUCHING: The potential loss of Disney channels without any immediate replacement could affect Astro Malaysia Holdings Bhd’s (Astro) earnings in Malaysia.

According to a news report, Disney is said to consider shutting down the majority of its TV channels in Southeast Asia and Hong Kong later this year as it plans to shift its focus to the direct-to-customer business model.

A total of 18 channels are expected to be closed by Disney and this decision could affect Astro if it is no longer able to offer Disney content to customers on its pay-TV platform.

The move is said to take effect from October 1, 2021.

Channels set to be shuttered include Fox, Fox Crime, Fox Life, FX, Fox Action Movies, Fox Family Movies, Fox Movies, Star Movies China, Fox Sports, Fox Sports 2, Fox Sports 3, Star Sports 1, Star Sports 2, Disney Channel, Disney Junior, Nat Geo People and SCM Legend.

“We note that Disney Channel and Disney Junior have already been pulled out from Astro early this year,” recapped researchers at Public Investment Bank Bhd (PublicInvest Research) commented yesteday.

“Only four Disney-owned linear channels will continue to be operational, which are Star Chinese Channel, Star Chinese Movies, National Geographic Channel and Nat Geo Wild. Should this be true, services offered by Disney’s broadcasting partners like Astro would be affected.

“The potential loss of Disney channels without any immediate replacement could affect Astro’s average revenue per user (ARPU) and hence earnings in its financial year 2023 (FY23).”

Based on PublicInvest’s estimate, every one reduction in its ARPU will lead to a 1.5 per cent decline in earnings. However, the research firm understood that Astro is looking to introduce new over-the-top (OTT) streaming service partnerships in the near term, apart from the existing HBO Go, iQiYi and Astro Go, with an aim to cater for the diverse Malaysian market.

“This may help to mitigate the impact of the change in Disney’s business model,” it said. “In addition, we opine that the home shopping segment will be one of the main drivers going forward, as the group is looking to leverage on the enlarged customer base via better product offerings.”

We note that Disney Channel and Disney Junior have already been pulled out from Astro early this year. PublicInvest Research

— AFP photo According to a news report, Disney is said to consider shutting down the majority of its TV channels in Southeast Asia and Hong Kong later this year as it plans to shift its focus to the direct-to-customer business model.