Peter Bithos, the CEO of HOOQ, discusses how the service—which operates in Southeast Asia and India—is responding to changes in the landscape, investing in originals and cultivating talent through the HOOQ Filmmakers Guild.
TV ASIA: How has your strategy evolved since launch?
BITHOS: We were the first regional service to get started. I remember very clearly knowing that the way things were being set up was going to have to change, but not knowing 100 percent how. By the end of the first year, we realized that the monthly recurring subscription model that you see in North America or Europe, not only was that not going to get to scale, it was not going to work in Southeast Asia. So 2015 was setup and rollout, 2016 was rethinking the business model. What does it need to look like? How does it work? What does the customer experience need to be? What content value proposition sits where? Building it internally was the easy part; convincing the ecosystem was a whole different kettle of fish. Take one thing that we’ve announced: HOOQ for a day. I was passionate about this from the beginning. To do it, you have to convince every single one of your [content partners] to agree to it. If you have one content provider holdout, it doesn’t make sense to the consumer. What are you going to tell the customer? Here’s HOOQ for a day, except for these users or for these titles. So we had to spend most of 2017 working through all our partners, rebuilding our tech stack and building new partners. And then relaunching HOOQ for what we think scales to 50 million to 100 million users as opposed to 5 million.
TV ASIA: Tell us about the new skinny bundle you’ve just introduced in Indonesia.
BITHOS: Except for Singapore, the Southeast Asian market never got to scale for premium content. Pay-TV penetration is very, very low in almost every country in Southeast Asia. As a result of that, great brands that most people would be familiar with aren’t accessible to the everyday person. In a place like Indonesia, with 260 million people, 90 million to 100 million households, only 10 percent have pay TV. And we have noted across multiple geographies, including India, that the mix of a linear experience with an on-demand experience is still a very relevant engagement vehicle. We’ve seen data from other platforms that have blended linear and on-demand and the linear experience plays a significant role. And then monthly pricing and accessibility is a hindrance. People do not commit to subscription at scale for almost anything in their lives. They don’t do it for packs of cigarettes—they buy one cigarette. They don’t buy bottles of shampoo—they buy little sachets. The average cost of a pay-TV package in Indonesia can be up to $20 to $30. That’s not affordable for everyone with a smartphone. [With the skinny bundle] we’re bringing an entire platform of premium content, linear and on-demand, to everybody with a smartphone, priced at a level everyone can afford. It’s taken a lot of effort pulling together a lot of different companies, breaking a bunch of rules that have never been broken before to create a skinny bundle inside an OTT service. And it’s not only for a monthly subscription—we’re doing it by the week or the day. So in Indonesia, when you buy HOOQ for a day, a week or a month, it will not only come with all the on-demand content, but with 20 to 25 premium channels from brands you know and love, with both the linear and catch-up experiences. That gives smartphone users in Indonesia the ability to get pay TV for the very first time. And to do that on their phone or their PC or even if they have a TV that is capable of it. It is taking the pay-TV world in emerging markets into the OTT world.
TV ASIA: And there’s the free layer of terrestrial channels as well.
BITHOS: That’s right. The free-to-air channels are in a free layer. We’ve announced four more Indonesian channels for the free bundle, bringing our total free channel offering to 13.
TV ASIA: Are you looking to expand this throughout the HOOQ footprint?
BITHOS: HOOQ today is in Indonesia, Thailand, the Philippines, Singapore and India. Southeast Asia is the focus for this particular play, and we’re starting with Indonesia. In Southeast Asia, you see us positioning ourselves and moving boldly to be the platform of choice for consumers and the ecosystem. In India, it’s the opposite. In India, there are platforms that are already doing fantastic jobs. We are positioning ourselves as the Hollywood channel of choice on multiple platforms. So we’re on Airtel and Vodafone as an OTT “channel.”
TV ASIA: We first spoke just as HOOQ was launching. I’m curious if, back then, you had an inkling that live, linear channels would end up being part of your business model?
BITHOS: I didn’t anticipate that there would be the flexibility in the industry for us to be able to do it. The industry has changed to the point that people are willing to do new things. You can get access to an amazing premium video platform that includes the best local and Hollywood on-demand content, together with a skinny bundle, for 25 cents, for one day. That’s unheard of. I don’t know if anyone else in the world has done that. It’s a sign that people recognize that innovation is critical right now in the ecosystem.
TV ASIA: Tell us about the importance of the Indonesian market for HOOQ.
BITHOS: Indonesia is by far the largest market in Southeast Asia. There is no such thing as winning in Southeast Asia and losing Indonesia. So we are in it to win it. We see a lot of people coming to Indonesia and are thinking about this space very aggressively. And we decided to move first. We’re investing on the content side and the people side. We have almost as many people in Indonesia as we have in our headquarters. We have a development center in Bandung; we have a large office at scale in Jakarta. And we’re investing on the partner side. We have more partners in Indonesia than any other country. So it’s a full-on sprint. And we believe there’s an open opportunity to be a really good platform, going deep into the customer base.
TV ASIA: What have been the key lessons you have learned from the first edition of the HOOQ Filmmakers Guild?
BITHOS: Everyone in the ecosystem—young talent and experienced screenwriters—is learning how to produce quality episodic for OTT. In North America and Europe, this golden age of television is unbelievable. But people in this part of the world are still understanding what it means to write edgy, ten-episode series. They’re used to 100 episodes or a two-hour movie, and there’s very little in between. The screenwriters are trying to learn how to deal with it; the directors are learning how to deal with it. It’s great that the ecosystem is pushing hard to develop that over time. I wish it were easy.
TV ASIA: You’ve gone big on original movies in Indonesia. What was the thinking behind that?
BITHOS: As an OTT provider, our preference is great episodic. But in Southeast Asia, great episodic doesn’t exist at scale. It’s very thin on the ground. So you get tons of telenovelas that are well suited to the free layer of the service, and you’re going to see that on HOOQ, but for premium content that people want to pay for, [there isn’t much being produced in the region]. I would love to put up 50 box sets of great, edgy, Indonesian episodic—it doesn’t exist. So we have to make it, and that takes time. Movies keep a pipeline of hot and fresh stuff coming in for a period of time, and it is premium. The other thing about Indonesia, in particular, is that it is way underpenetrated for movie cinemas per person. There are only 1,500 screens or so for the entire country of 260 million people. Some towns don’t have a movie cinema. Often in Indonesia, the very first time people can see a movie is on HOOQ. So it was a no-brainer that for this year and the next few years, movies are going to be a big part of what we offer.
TV ASIA: Given that a lot of these markets are heavily mobile, and people are mainly watching on smaller screens, how does that impact your content strategy?
BITHOS: From the premium side, not much. If you’re paying for something, you want good-quality premium content, and that tends to be long-form. Now with the freemium layer, we’re going to be experimenting with all different types—short-form, snackable, mobile-focused. Having a free layer opens up the horizon of innovation on the content programming side. And the great thing about that part of the ecosystem is there’s much more of a win-win attitude on the content-supply side of the equation. On the premium side, it’s sometimes a bit one-way.
TV ASIA: Does local or regional content travel well within the HOOQ footprint?
BITHOS: I don’t think that part has happened well yet. Korea is an amazing factory for that—you have to give the creative community in Korea an immense amount of credit. It’s not easy. You see some movies, like Bad Genius from Thailand, build an audience around the region. But they tend to be one-off and genre-based. It’s something we’re toying around with and we’re trying to promote. But it’s early days, and no one has proven it yet.