Asia's pay-TV industry is a ray of light in a media industry that is filled with tales of woe.
Schedule shake-ups - including an ongoing localisation drive across the region - are attracting viewers in droves, forcing advertisers to sit up and take notice.
And while networks are having to give clients added "extras to win their advertising dollars, rate cards for the major channels are holding firm, so much so that there is now talk of the Asian pay-TV market attracting several big new players before the year is out.
"We remain in an uncertain economic climate, but it's fair to say we're seeing little green shoots of growth, which is good news all round," says Simon Twiston Davies, chief executive officer of the Cable and Satellite Broadcasting Association of Asia (Casbaa).
Mark Froude, CNBC's vice-president of international sales and marketing, Asia-Pacific, agrees that recent times have been difficult, but says that they have not been as damaging to the cabsat scene as they have been in other media sectors.
"Obviously from a media industry perspective it's not been a perfect year. There's been a lot of challenges which have primarily been a result of the global environment, he says.
"But pay-TV distributors have been able to rise to the instability pretty well compared to some of the more secondary media, particularly some of the print publications and online media."
Football madness across the region in June helped the number of Asian pay-TV subscribers to soar, especially in World Cup host nation Korea as well as Hong Kong. Penetration rates for pay-TV now hover at about 30 per cent of households Asia-wide, and Twiston Davies says research shows that in households with cable, about half of the time spent watching television is spent watching cable.
"The advertising climate is tough, there's no doubt about it, but cable is beginning to make more inroads into the terrestrial advertising market because we have the right numbers to demonstrate to advertisers and agencies, he says.
The Casbaa chief estimates that there are 165 million pay-TV subscribers around Asia. Casbaa says the proportion of TV adspend going to pay-TV has shot up from about nine per cent two years ago to 15 per cent today.
Caroline Wong, marketing communications director at movie channel HBO Asia, believes greater money worries have made cable viewing attractive as an entertainment option. "If you go out for the night you probably end up splashing US$50 to $60, but if you stay at home you cook at home and you save a lot, she says.
To keep these budget-conscious consumers tuned in, HBO has strengthened its line-up of Hollywood blockbusters with a growing number of series, including the popular Sex and the City, aimed at women, Band of Brothers, targeting male viewers, and Six Feet Under, a family comedy series that is new to Asia.
Other efforts to capture viewers' attention include the development of different "strands at Discovery, focusing on children and travel.
Rival National Geographic is promoting programmes that marketing vice-president Pauline Goh says are "not typical documentaries". These are designed to lure younger viewers, and the channel is also working with schools, providing educational teasers for upcoming programmes.
ESPN Star Sports, meanwhile, is going into mainland China with live coverage of the English Premier League football for more than 100 million homes.
Like many cabsat channels, business news channel CNBC is focusing its programming efforts in the region. It's injecting ever-greater levels of local content, produced in and for the market country.
"Localisation is the key focus for us, CNBC's Froude says.
A localisation drive in Korea recently boosted subscriber numbers there from two million to 4.5 million, according to Froude. CNBC now has about 26 million subscribers around Asia, and has its sights set on targeting Australia and China with more local content in the near future.
CNN already has strong morning and evening blocks filled with segments produced within Asia.
"Localisation is a constant theme because people like to watch themselves, Twiston Davies says.
But improved schedules and growing viewership figures are not always enough to convince recession-weary advertisers to part with their cash.
Although the industry has held up, not everyone in pay-TV can be a winner in such harsh economic conditions.
"This year, overall, is going to be either flat or down on 2001, says Tess Caven, general manager of CIA International Asia.
When the purse strings are tightened, Caven says many advertisers feel forced to choose only one channel in each major category, such as news, sport and lifestyle. So the biggest names do well and the smaller ones struggle.
"Those people who are at the top of the tree in terms of their respective fields have done well, Caven says. "Some of the stronger channels have done very well this year, like Discovery, CNN and MTV. Star has done well because of the football - that's really boosted them.
"TV is naturally eroding print's share. It's taking more; the problem is that international and pan-regional budgets are always the most vulnerable and clients generally try to safeguard their local budgets at the expense of regional budgets when times are tough."
It is not easy money even for the channels which still see advertisers queuing up. They are being made to earn every advertising dollar that comes their way, "although there's no evidence that they've been throwing it away", Caven says. "What we're seeing is people working harder and putting more integrated packages together to get the deals. They're offering more value, which means not just bonus spots.
"They're being prepared to work with other media owners, they're working with online, and doing production - it's quite a big thing."
Froude says this is the case at CNBC. "What we've been able to do is broaden our advertising base and get more aggressive in terms of attracting new categories, such as travel and tourism, he says.
"But a significant number of clients are no longer spending anything like they used to ... overall it's evening out.
"What we've been required to do by clients is be more creative in terms of what we offer them, and add more value so they feel they're getting more for their money. It's become a lot more complicated and there's a lot more involved; there's more complicated sponsorship or creative executions or vignettes targeted for client needs."
CNN's new sports segment on its morning News Biz Today programme shows similar strategy in play. The segment airs three times during the broadcast and is sponsored exclusively by Volvo. Its billboards air after each segment, and the carmaker also sponsors the CNN news ticker that rolls across the screen during morning and evening prime-time around Asia.
At National Geographic, managing director Ward Platt says it has been difficult to maintain or raise advertising rates, especially in local markets that have been hit particularly hard economically. "In Taiwan last year there was a definite decline; prices were dropping, but I think in the other local markets we've been able to hold our prices and raise them a little bit, he says.
"With regional advertising, last year we definitely dropped rates, and we've been forced traditionally to sell at a fairly decent discount to the rate card anyway."
But the strategy this year is to charge advertisers the same rate, but give them that bit more for their money to convince them to sign a deal.
"This year we're doing more vignettes or one-minute stories that some how tie in with the brand - it's more throwing in something extra and preserving the rates, Platt says.
The broadcaster's Supercroc exhibition is an example of the station throwing in extra value. Federal Express sponsored the exhibition, transporting a 40-foot replica of a prehistoric reptile around the region for school children to see.
While the past year has certainly been a testing one for the pay-TV industry, insiders forecast some sunshine over the horizon. "Certainly in the last three to six months we've seen quite a pick-up in activity," says Platt.
He says revenue in the year to June was uninspiring, but he is optimistic about the year ahead after seeing the money start to come back in July and August, particularly in markets such as India, Taiwan and China.
"I feel that we'll probably have as much as 30 to 40 per cent increase at least, at the present run rate, over the previous year, Platt says.
Froude at CNBC is more cautious with his prediction: "We're always optimistic but by no means is it clear-cut, and people who say it is are probably kidding themselves. I think 2003 will see a continued recovery to some degree, but it won't be huge."
Perhaps the greatest signal that greener pastures lie ahead is the belief that the market is attracting new players. "We're potentially going to see at least one if not three new regional networks in the last quarter of this year. That's a serious investment and it's good news," Twiston Davies says. He is reluctant to give any detail, but says the newcomers would offer a similar mix of channels and content to that already being offered.
"We may only see one of them actually come to fruition but there are serious investment decisions going on, whereas I think six months ago there wasn't that much enthusiasm."
Observers point out that the cable and satellite industry in Asia is still in its infancy, having been in the region for only 10 years. Given its youth, and the testing economic times, the medium has done well to expand at the rate it has been.
"It's growing steadily right now, says HBO's Wong. "People are beginning to understand what cable TV is about, and acceptance is half the battle, so it's going in the right direction."
