Astro’s new subscription packages seen as positive

PETALING JAYA: Astro Malaysia Holdings Bhd’s new subscription packages that provide greater flexibility for customers would help reduce subscriber churn and draw in new customers.

RHB Research said the addition of Netflix streaming services on Astro would drive value proposition and support the group’s pivot into on-demand viewing.

“We see the new simplified plans as bolstering Astro’s overall content value proposition, with greater flexibility accorded to customers, via a mix of combo and standalone movie and sports packages.

“This should help reduce churn,” it said in a report yesterday.

Netflix joins the line-up of streaming video-on-demand (SVOD) services that include iQiYi, HBO GO, Disney+Hotstar (D+H) and TVB Anywhere+.

On Nov 9, Astro unveiled nine new subscription plans, including three bundled packages alongside the launch of Netflix on its platform.

The research firm noted that Netflix is available on Astro as default for packages priced RM129.99 and higher, which would appeal to a more premium market segment.

“There is no outright rebate combining a standalone Netflix subscription with Astro’s packages.

“Instead, customers are offered RM10 to RM25 discounts on their monthly subscriptions upon signing up for 12- or 24-month contracts, with additional rebates being doled out if a fiber broadband bundle is included,” it said.

Moreover, Astro’s existing subscribers with standalone Netflix subscriptions can access the app via Astro without re-contracting.

It is important to note that D+H was introduced via an opt-out feature for Movie Pack customers with an incremental RM5 per month subscription.

RHB Research said this would provide customers with a single billing platform and seamless viewing experience, specifically for customers accessing multiple over-the-top platforms.

Moving forward, Astro expects to launch more lifestyle-centric services over the next 12 months.

“An upgrade of its technology stack and higher penetration of its cloud-based 4K set-top boxes should drive stronger customer engagement and yield positive subs growth in the longer term, in our view,” said the research firm, which is keeping a “buy” call on the stock with a target price of RM1.45.

However, it said that Astro’s financial year 2023 ending Jan 31 (FY23) core earnings are adjusted for around 10% impact from the prosperity tax, with an 5.3% year-on-year decline projected before staging a 13.3% rebound in forecast FY24.