Marcos Milanez on Rakuten TV’s Programming Strategy

Marcos Milanez, chief content officer at Rakuten TV, showcased the platform’s programming strategy across FAST, on-demand and TVOD at the FAST Festival today.

Milanez, in his keynote conversation with World Screen’s Mansha Daswani that you can watch here, discussed curation, the importance of local content and the crucial role of data and analytics for the well-distributed European platform.

“FAST has become a critical pillar in our business,” Milanez said on how the platform has evolved over the last few years. “It’s an area that we put a lot of focus on. We’ve now reached a position where we’ve established pretty good landmarks within our FAST lineups across our key markets in Europe. So it really comes down now to advancing in terms of the localization of that lineup and making sure that we have relevant channels with recognizable IPs for each of those local audiences. Back in the day, it was getting off the ground with a volume of channels coming from the U.S. with known IPs, but maybe not locally relevant to each of those markets.”

Rakuten TV was among the first platforms in Europe to get into the FAST game in 2019. Now available across 43 countries, the level of localization varies from country to country, he said. “It’s been an ongoing process of expanding that level of quality and localization. Particularly in the key Western European markets and Nordic markets for us, it really comes down to strengthening that relationship with broadcasters, with local rights holders, making sure that we either acquire third-party channels coming from them or content syndication from these companies, which we can then feed into our O&O channels. We’re trying to balance that content acquisition strategy of having a healthy mix of these existing third-party FAST channels but also launching our own and operated channels, both on the Rakuten TV platform but also on third-party FAST platforms.”

FAST is just part of the Rakuten TV offer, Milanez said, highlighting its multiple models as a key differentiator. “One of our USPs is that we are agnostic and ubiquitous. Our app, our platform, is not limited to a certain device manufacturer model. We are across all key leading smart TV devices, among other types of devices as well, not just smart TVs. We’re not owned by a particular studio, so we also have complete freedom in terms of content acquisition strategy with other major Hollywood studios. But then also the plurality we have in our product portfolio is super useful for us in not just being a FAST channel provider, but also offering AVOD and TVOD as well. All of these business lines feed into our overall business, as intel and insights. But also bringing in customers that wouldn’t have been in our platform and then converting them to registered accounts, then transact on our TVOD business or vice versa. At the same time, we’re also not overcomplicating. You don’t want to have too many different business lines. All of these are no subscriptions, no strings attached. That brings that simpler communication proposition to the customer.”

Rakuten TV has also been investing in originals, brand-funded and not. Projects need to align with the company’s key values. “It comes down to that message of optimism and empowerment. These are the type of storylines that we try to go after. Is it also a story that fits within the type of content that we know our audience is after and would bring engagement to the platform and have PR and marketing buzz. And then lastly, you have the brands and sponsorship appeal. It’s important that we do have a brand that also identifies itself with that project that we’ve created.”

Milanez does not have a set number of originals he’s working towards; unlike acquisitions and the FAST channel slate, volume is not the end game with originals. “It comes down to projects that fit in those three verticals that I mentioned, the values, the content strategy, and the sponsorship appeal. I’d rather have one project that delivers within those three criteria boxes than five projects that I know won’t have the same effects that we need.”

Data is a huge advantage, Milanez, both from its own AVOD platform and from the owned and operated channels it makes available to rival services. “It helps curate our acquisition strategy. What subgenres are working, from both a viewership and ad monetization perspective, helping upcoming acquisition strategy in terms of categories that we need to focus more or less on. It helps our own and operated channels strategy as well as, if we were to build new channels owned by us, what segments do we want to invest in.”

Milanez then discussed differences in how Rakuten TV audiences are engaging with content on FAST versus on-demand. “It’s a different audience. Typically, in the on-demand section within our store, you have a customer who pretty much has an idea of what they want to watch, as opposed to on linear, where it’s more laid-back and passive viewing. We have a really healthy balance of what is on demand and linear within our UI. That translates as well to the business size and viewership within the Rakuten TV app. On other platforms, there’s a massive majority of viewership and engagement happening only on FAST or only in AVOD.”

Snackable content that audiences can dip in and out of fares better in FAST, whereas movies and serialized content are more popular on-demand. “In AVOD, movies drive traffic, followed by kids and lifestyle/reality.”

The FAST lineup varies from country, but Rakuten is working with an average of 120 to 150 channels. “Even though we’re continuously adding more channels to our lineup—there’s always new content, new IPs, new companies coming through— we are spending more time in terms of withdrawals. Channels that are underperforming or that we think aren’t adding that much value. Three or four years ago, we didn’t put that much emphasis on that. But now we really don’t want to be in a position where suddenly we have 200, 300 channels on the lineup because we know it just generates noise and it will distract the customer and dilute the viewership and monetization across our key partners.”

Rakuten TV has been improving its UX to promote discoverability, Milanez noted, and working closely with smart TV manufacturers. “The fact that Rakuten TV has a branded remote control button in various models, plus the app being pre-installed on those smart TVs, plus banners and other placements within the UI that either drive traffic to our own app or our O&O channels on these TV manufacturers’ FAST platforms, it really brings a huge value. Once they’re in comes another challenge, which is explaining what we offer. Being able to offer not just FAST but also AVOD and TVOD is a strong USP, but it comes with a challenge of explaining why this movie is just available for buy or rent. The average consumer has no idea in terms of the windowing as well.  The layout of the UI, there’s a clear distinction of what is available for transaction VOD or what is available for free. When you come into our app, if you’re already a registered user, the UI will automatically adapt to that account and showcase more transactional VOD because you need to be registered to buy or rent. If you’re coming as an unregistered, then it’s configured in a way where it showcases more the AVOD and FAST content. But there’s always snippets and an angle to try to convert that unregistered to registered and vice versa. All of those tweaks have improved the communication and the discoverability of the three pillars of FAST, AVOD and TVOD.”

In the year ahead, a core priority for the FAST channels is investing in sub-genres, Milanez said. “We’ve done a good job in establishing key verticals in the lineup—movies, news, kids, sports. We’ve noticed when you focus on these sub-genres that have hardcore fan bases, it really boosts viewership and engagement. That’s the kind of channels and themes that you need to go after.”

The TVOD slate is growing in terms of volume and quality. On the on-demand side, the movies lineup is significant, with Milanez now looking to expand the series lineup.

Netflix, Disney+ and others adding ad tiers has helped the overall CTV opportunity in Europe, Milanez said, but they are now new competitors for those ad dollars. “CTV advertising is growing. I don’t think it’s at the same growth rate as the actual viewership and inventory growth. The CTV advertising budget will pick up.”