Strategies for winning the battle for screen time and wallet share dominated the sessions at APOS in Bali last week, as 700-plus executives from across the Asian and global media landscapes convened to talk about what businesses need to do to remain relevant, and profitable, amid seismic shifts in consumption habits and revenue models.
Vivek Couto, executive director of Media Partners Asia (MPA), the organizer of APOS, laid out the major trends in the landscape is his packed opening session. “One of the biggest changes we’ve seen in our industry over the last few years is the transition from household-based consumption to individual usage-based consumption, driven by mobile and broadband connectivity and devices,” Couto said. That has impacted not only how content is consumed but also the “path to monetization,” he said. “The other big battle is the one for wallet share.”
He looked at how various digital platforms have fared in Asia. Of Amazon Prime’s 100 million global members, about 25 percent are in AsiaPac, Couto said. Hotstar will have a 20-percent share of India’s online video advertising market by year-end with about 5 million paid subs. About 10 percent of Netflix’s subs will be in this region by the end of 2018. Viu has 16 million monthly active users, 70 percent of which are in the region. And for YouTube, 35 percent of its 1.5 billion monthly users are from Asia. Pay-TV subscription revenues are in decline across Asia, while online video subscription revenues are rising from a small base. “2016 to 2018 has been pretty tough for television on the advertising side, but we expect it to rebound in certain Southeast Asian markets,” he said.
Over the next five years in Asia—excluding China—Facebook, Amazon, Netflix and Google (FANG) will retain more than 60 percent of online video revenues, MPA said in a report released on the eve of APOS. Nevertheless, the TV industry, which will record a slower pace of growth, will still have an 80 percent market share in 2022. Online video revenues outside of China will rise from 9 percent in 2017 to 20 percent by 2023, MPA said.
Couto also addressed the level of investment in content in Asia. Content spend on movies, entertainment and sports will rise from $23 billion in 2017 to $31 billion by 2023. “It’s largely anchored to new dollars being spent across digital video, which will account for 20 percent of content investment” in five years time. Sports rights have been key to that spend, “but a lot of the dollars on entertainment and originals are also going online,” Couto noted.
Investing in local content has been one of Viacom International Media Networks’ (VIMN) key strategies globally, including in Asia. The channels operator had a busy week at APOS, notably with David Lynn, president and CEO of VIMN, on-site to tout the company’s international gains. “We invest $4 billion a year in content. We have some of the strongest brands in the world. In that environment, the amount we’re investing in our business, particularly in international, is increasing. We still see a lot of headroom for growth. If you look at the pay-TV industry outside the U.S., it’s around 40 percent penetration, versus 80 percent in the U.S. There are a lot of consumers who aren’t taking services at the moment. There’s a big opportunity to go after those consumers.”
Growth still exists with traditional MVDP operators, Lynn noted—“we’re growing the footprint of our brands, and our audiences, in that area. On top of that, we’re reaching out with new partnerships with new entrants in the industry.” That dual strategy could be seen in VIMN’s deal announcements last week, including the launch of Nick Jr. in Hong Kong with pay-TV operator iCable and in Indonesia on telco Telkomsel.
Digital is also a key growth area for Discovery, Inc., JB Perrette, president and CEO of Discovery Networks International, said at APOS. For the next chapter of Discovery’s growth, a key strategy will be developing “more nonlinear products to super-serve fans” with multiplatform content from video to apps,” Perrette said. He cited the Eurosport Player and the Motor Trend streaming service around motoring content, which the company is looking to globalize beginning this year. At APOS, Discovery unveiled plans to launch Discovery Kids as a digital service in the Philippines. “Asia is a critical launch platform,” especially given mobile penetration rates in the region, Perrette explained. Those are the key digital projects at present, but the goal is to have five to ten mobile-led digital-first products in the next 12 to 18 months. “For us it’s about finding these sweet spots of passionate communities of fans, enthusiasts, who we can super-serve.”
Digital platforms had a significant presence on the conference agenda. James Farrell, Amazon Prime Video’s head of content for the Asia Pacific, took part in a panel with Ritesh Sidhwani of Excel Entertainment and Akihiko Okamoto of Yoshimoto Kogyo, two of its key production partners in the region. India and Japan have been the major areas for Amazon Prime Video’s originals strategy in the region, given the traction of the Prime offering in those markets. Its first original in India, Inside Edge, came from Excel Entertainment, and its most successful Japanese production to date, the comedy show Documental, hails from Yoshimoto Kogyo.
Netflix’s Tony Zameczkowski and Vincent Tauzia discussed the streaming platform’s Asian progress and the importance of partnerships with telco and pay-TV operators, such as the newly unveiled one with India’s Tata Sky. Zameczkowski noted, “We are accelerating investment in this part of the world. A good example is Sacred Games, our first original in India. We are doing more in Korea as well. You will see 15-plus originals coming from Asia to the platform in the [next] few months.”
VICE has planted a major stake in the ground in Asia, regional CEO Hosi Simon said in his keynote session. “Being here isn’t about bringing VICE to Asia; it’s about creating something that is native, distinct for each local culture, each local media market, each local youth culture. The VICE brand can be very elastic. It doesn’t have to mean the exact same thing as it does in the rest of the world. It should speak to young people right now finding their voice, distributing their own stories, making themselves heard. We stand for that generational shift, that moment when young people take control of their cultures.
“We’re here for the long term,” Simon said. “We believe the cultural center of gravity of the world is moving to this part of the world.”
While there were plenty of senior executives from global businesses at APOS, the conference agenda was largely dominated by the local and regional companies reshaping the content ecosystem.
In Japan, having a good balance of local and international content has been key to Hulu Japan’s success, Kazufumi Nagasawa, chief content officer, said, noting that the platform has licensed a diverse array of imported dramas, many of which would have been unlikely to find a Japanese home on any other service. A case in point: the Australian prison drama Wentworth.
APOS delegates heard from Ajit Mohan, CEO of Star India-owned Hotstar, about how it has taken the lead in India’s online video space. While sports do drive big viewing numbers for Hotstar, “most of our consumption is on TV shows and movies,” Mohan said. “Over a year, 75 to 80 percent of all of our watch time comes from outside sports.” Hotstar’s early days saw it being used primarily as a catch-up service, Mohan continued. “More and more, people introduced to the platform start looking at it as a primary play. For many people it is the primary screen.” Further, what works well on television works well on Hotstar, he noted. “It’s about great stories. We’re not seeing that people are consuming only one set of content. Consumers are watching Homeland and Hindi TV shows. Those boundaries don’t exist, those stereotypes don’t exist.” Average watch time is 45 minutes to 60 minutes a day.
The pan-regional streamers also made lots of noise at APOS. Shifting away from the SVOD model that it has operated under since launch, iflix is revamping its offering with a new free tier, live linear channels and sports and advertising opportunities. “We massively overestimated the importance of Western content,” iflix CEO Mark Britt said in his session on Thursday on one of the key learnings that led to the platform’s repositioning. “Payments need to be much more flexible, much more consumer-oriented, and we need to invest more and more into amazing local content.” That will include adaptations of global formats, Britt noted.
HOOQ announced a ramping up of its Indonesian presence, as well as a deal with BBC Studios for a slate of dramas for its Indian service. It also gave the greenlight to Bhak, an India pilot funded by the inaugural HOOQ Filmmakers Guild, which was launched to back new scripted originals out of Asia. On HOOQ’s path over the last four years, CEO Peter Bithos said, “figuring out how to get to those 50, 60, 70 million smartphone users has been an iterative journey that no single player can solve by themselves. It’s taken the ecosystem a while to get there.” He added, “We want and need to do everything twice as fast. We are constantly challenging ourselves to go faster. Because it’s a high-stakes game.”
Viu has been stepping up its volume of originals, which is set to reach 70 titles, across more than 900 episodes, in Indian, Chinese, Indonesian and Arabic languages, by year-end. Ahead of APOS, the service revealed a Singapore/Malay version of The Bridge, the first adaptation of Endemol Shine’s acclaimed scripted format in the region.
A new SVOD service is being rolled out in the region this year by Singapore-based iwonder, led by iflix alum James Bridges. It will offer up doc films and TV series, plus up-to-date current affairs shows curated around key themes, trends and people, including Kim Jong-un, the Rohingya crisis, Russia, Bitcoin and #MeToo. Stay tuned for news on iwonder’s content slate in the next few weeks. The new platform is partnering with iflix for its initial rollout in some markets.
Esther Nguyen, founder and CEO of POPS Worldwide, shared with APOS delegates her company’s success strategy in Vietnam. At the market last week, NBCUniversal International Networks unveiled a partnership to bring E! Zone, which delivers on-demand access to content from the pop culture channel, to POPS Worldwide’s YouTube channels.
Astro-backed Tribe announced at APOS that it has expanded its reach in Indonesia, working with Telkomsel. Meanwhile, Indonesia is set to have its own new content player in Go-Jek. The company originated as a ride-hailing app but has evolved into food delivery, mobile payments and logistics. Content is its next expansion point, Michy Gustavia, senior VP of acquisition and development, discussed last week. There have been 88 million downloads of the Go-Jek app, Gustavia said, with more than 3 million transactions daily. “Go-Jek has become Indonesia’s operating system,” she said. On its content ambitions, which have kicked off with Go-Studios and will later include a subscription service, Go-Play, Gustavia said the emphasis would be on distinctive Indonesian voices. “We want to nurture Indonesian talent and promote Indonesian content.” Feature films and docs will be key areas for the company. The company is already working with VICE on an Indonesian feature film.
Partnerships are key for new platforms in the region, particularly with the telcos, which were a dominant presence at APOS this year. However, telcos redirecting their spending into infrastructure upgrades could impact how much they shell out for content deals across the Asia Pacific, Aravind Venugopal, VP of MPA, told delegates.
The final word on the future of Asia’s shifting dynamics goes to MPA’s Couto, who said in his opening session that consolidation is key for scale, regionally and globally. Internet TV will continue to drive incremental growth in the business, he added. And while there will be fewer investments in pure-play video, Couto noted, “companies with local scale that can withstand disruption are going to be strong drivers of change in the future, particularly in a more consolidated market.”