Perspective... Pay-TV still has work to do to convince brands it can be an ad medium

And it has good reason to be quietly satisfied with itself.

In a year that has seen most ‘traditional’ media in meltdown, pay-TV has been steadily going about its business. Channels such as HBO and Discovery have been rolling out HD and on-demand services around Asia. Pay-TV platforms have shown huge growth in India, and may finally be ready to take off in Indonesia.

As our feature points out, the expansion of pay-TV in Asia is now inextricably linked with the spread of digital. There is still huge potential around the region for the ‘triple play’ of telephony, broadband and pay-TV.

On one level that is heartening for content owners; they can count on a steadily expanding group of potential subscribers. On another level it is worrying. Online piracy remains a huge issue in Asia, and online video sites such as Tudou are now aggressively moving into content production to offer alternative TV services.

As pay-TV jumps on the digital bandwagon, one problem it will face is that people will use their lovely new broadband connections to access content that previously would have been available only on pay-TV. Basically, if you know what you’re doing,

the internet is like a giant TiVo - time-shifted viewing of pretty much anything you’d want to watch. And however much institutions such as Casbaa lobby, that is not going to change in a hurry.

That’s one of the reasons why the pay-TV industry keeps coming back to advertising as an extra revenue stream. Yet here there are huge challenges ahead. One of my favourite sessions at last year’s Casbaa Convention involved M&C Saatchi’s Chris Jaques haranguing a dumbfounded audience; pay-TV, he said bluntly, did not have the scale to be a mass medium or the targeting to be a niche medium.

So expect to see lots of demonstrations of technological marvels such as targeted advertising and audience tracking at this year’s Convention. While this is, of course, to be welcomed, it still doesn’t feel like the answer. Technology firms are not very good at giving advertisers what they want. Pay-TV is a bit like mobile; both have huge technological potential, and both can wheel out all sorts of data to support themselves, but both can leave advertisers cold. In Western markets, interactive TV via digital platforms was earlier this decade hailed as the future of TV advertising. It wasn’t.

At a time when marketers are homing in on buzzwords like ‘engagement’ and ‘participation’, bolting on a few extra metrics to television ads feels a little, well, quaint. Pay-TV has plenty to be proud of, but also plenty of work to do.

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This article was originally published in 5 November 2009 issue of Media.