Lands of Promise

October 2008

Executives from cable and satellite channels and pay-TV platforms from across Asia are heading to Hong Kong this October for the annual CASBAA Convention, where this year’s theme is “Subscribe to the Future—All Eyes Are on Asia”. The phrase reflects a prevalent sentiment in the entertainment business today—that the Asia Pacific is expected to be the focal point for significant gains in the years ahead.

According to a recent PricewaterhouseCoopers report, the media-and-entertainment market in Asia Pacific will total $508 billion in 2012, a 52-percent gain on last year. ZenithOptimedia, meanwhile, has forecast an 8.5-percent growth rate for advertising in the region this year, with revenues expected to reach $111.5 billion. By 2010, Japan will be the second-largest advertising market in the world, and China the fifth.

In line with these trends, the CASBAA Convention is moving to a larger location this year, to accommodate the wealth of new interest in the pay-TV industry. “We’ve outgrown [the previous] venue,” says Simon Twiston Davies, the CEO of the Cable & Satellite Broadcasting Association of Asia, which organizes the annual event. “Our industry is growing, our market is still very strong, and we’re getting very good take-up from outside of Asia by those who are looking beyond their own domestic markets for growth.”

BUILDING BOUQUETS

The last 12 months have seen a number of global brands expand their presence in Asia. Sony Pictures Television International (SPTI), for example, has doubled the size of its channel bouquet, adding AXN Beyond and Sony Entertainment Television (SET) to its established offerings, AXN and Animax. AXN Beyond, an English-language general-entertainment proposition, has rolled out in the Philippines, Hong Kong and Singapore, and the female-targeting SET is available on systems in Hong Kong and Singapore. “The response from both cable operators and from viewers has been extremely positive and encouraging,” says Todd Miller, the executive VP and managing director of SPTI in Asia. “These channels were both conceived in Asia and have been tailor-made for viewers in Asia. That really sets us apart. Over an 18- to 24-month period, we fully expect to be rounding out our distribution across the region.”

BBC Global Channels is now offering a five-channel bouquet, following the launch of BBC Entertainment and CBeebies in India. Rounding out the offerings are BBC Knowledge, BBC Lifestyle and BBC World News.

National Geographic Channel Asia, meanwhile, has expanded beyond the factual arena, bringing the Fox International Channels (FIC) portfolio to the region. FoxCrime and FX have already made their way into Hong Kong and Singapore, and FoxCrime has also closed carriage deals in Indonesia and the Philippines. “We think that the Asian audience will adopt [FoxCrime and FX] very quickly,” says David Gunson, the senior VP of broadcasting and programming for the NGC and FIC portfolio in Asia, which also includes the Adventure and Wild brands.

Comcast International Media Group (CIMG) is another entity that is beefing up its presence. It launched The Style Network in Asia on October 1. Christine Fellowes, the managing director for Asia Pacific at CIMG, is expecting a strong response from platforms. “Young Asian women look to international fashion magazines and home magazines, and there’s a growing appetite for programming that is lifestyle related.”

CIMG also operates The Golf Channel, with localized services for Japan, Korea, China, Singapore, Hong Kong, Malaysia and Indonesia. “We’re developing partnerships in a number of new markets for 2009,” she says. There is also potential to bring G4, the video gaming and technology network targeted to men, to the region via branded blocks, Fellowes adds.

AETN International has ramped up its Asian activities, last year creating a joint venture with Malaysia’s Astro All Asia Entertainment Networks to further expand the reach of the AETN bouquet in Southeast Asia. AETN All Asia Networks (AAAN) has reached deals on History, Crime & Investigation Network and The Biography Channel in such markets as
Singapore, Thailand and Hong Kong. This builds on AETN’s existing carriage deals in other parts of the Asia Pacific, including Japan, Korea, India and Australia.

New to the landscape this year is SCI FI Channel, which NBC Universal Global Networks first launched in Japan in April. That was followed by the rollouts of SCI FI and Universal Channel in Singapore and Cambodia. Raymund Miranda, the managing director of NBC Universal Global Networks in Asia, notes that there will be further opportunities to expand the reach of the bouquet as operators transition to digital. Ultimately, however, “It is still going to be about very strong brands and access to good content. Our advantage is that NBC Universal is one of the biggest content creators in the world.”

ITV Global Entertainment is also looking to exploit the deep wells of its programming catalogue. The company is rebranding its current offering in the Middle East, UKTV, and is planning to expand the service across Asia as a general-entertainment channel. “We already license a lot of programming to other stations,” states James Ross, the regional director, “but it’s still only a fairly small proportion of what we have. There is an audience for high-quality drama, entertainment and reality across the region. We feel that we can deliver an excellent channel with programming that probably hasn’t been seen in Asia and the Middle East before, but it’s complementary and in addition to what we already syndicate to other stations.”

In the next 12 to 18 months, Ross says, “We would like to see the service on all the major cable, satellite and IPTV platforms in Asia, and we see no reason why it shouldn’t be. The programming quality is very high. The variety of programs is good. It offers something different from what’s out there. We feel the mix of programming is right for the audience we’re targeting, which is people who speak English in Asia.”

CREATING DESTINATIONS

The growth in the industry, however, is not limited to new channel launches; established brands are using a variety of strategies to expand their businesses, most notably beefing up their original programming initiatives and seeking out exclusive, first-run content. SPTI, for example, is on season three of The Amazing Race Asia for AXN and has embarked on its first local production for Animax, LaMB. “As the channel landscape becomes more cluttered, having destination, iconic programming becomes critical for us to deliver value to our platforms, advertisers and viewers,” says Miller.

Discovery Networks Asia has been investing in creative talent through its First Time Filmmakers initiative, with those projects airing on Discovery Channels across the region and, in some cases, on sister channels worldwide.

National Geographic Channel Asia, too, has been mentoring local talent for content to air on its flagship service. The network has alliances in place with Singapore’s Economic Development Board and Media Development Authority, Malaysia’s FINAS and Taiwan’s GIO. The results of those tie-ups “don’t just work in their own country,” Gunson notes. “These programs are also performing well in our other markets. We have fantastic international content, from Europe, Latin America, Australia, North America, and then we have this wonderful Asian flavor, which is taking a local angle but then giving it an international perspective.”

In the animation sector, Cartoon Network continues to run SnapToons, “an initiative to develop original content by collaborating with talent across key markets in Asia in the creation of high-quality cartoons,” says Soumitra Saha, the senior VP and general manager of Turner Entertainment Networks Asia (TENA). “Through this initiative, the network is looking to invest in funding, backing and developing a new, original and groundbreaking idea that lends itself well to animation, is targeted to kids and has either a universal or regional appeal.”

Content that travels is certainly a boon for the region’s leading players, but country-specific fare is also crucial for many channel brands as they look to build their businesses in high-priority markets.

Cartoon Network in Taiwan, for example, has aligned with the Institute for Information Industry to allow local animators to create original shorts based on the characters in the hit series Ben 10. In India, the local feed of Cartoon Network supplements international hits with home-grown acquisitions like The Legend of Prince Ram, The Adventures of Tenali Raman, Bal Hanuman and the Krishna movie series. The sister service POGO, featuring live-action fare, has found success with the original commission M.A.D. (Music, Arts, Dance).

India has also proven to be a success story for Disney Channel. The Indian feed produced Break Time Masti Time, which was originally created as Quelli dell’Intervallo for Disney Channel Italy. High School Musical, however, has been Disney’s most lucrative franchise in India. When released in India, the soundtrack featured three locally produced songs, and My School Rocks chronicled a national school dance competition inspired by the film.

Viacom recently aligned with Network18 in India to create Viacom18, a joint venture that operates MTV, Nickelodeon, VH1 and Colors, a new general-entertainment service. “Given the complexities and the challenges of the Indian environment, having a local partner [provides] an uncommon competitive advantage,” says Amit Jain, the executive VP and managing director of MTV India, China and Southeast Asia. “Viacom does bring outstanding strengths in the areas of content, branding and creativity. However the key ingredients for success in India clearly lie in the areas of distribution, operations and understanding local consumers.”

RESPECTING DIFFERENCES

Moving more toward what Jain calls “intensely local” content is also part of MTV Networks’ strategy for Southeast Asia, where the company has traditionally operated a single, multimarket feed. “If you’re willing to be a small pay-TV player and have the one or two feeds which cut across all these markets, then you can have a pan-Southeast Asian strategy,” Jain says. “These are diverse audiences with unique cultures and unique languages, and you need to respect those differences and give them entertainment content that is relevant and engaging. We’ve set up local partnerships in Thailand, Taiwan, Philippines and Indonesia. These are made locally and reflect local youth passions.”

Discovery Networks Asia also realigned its operations this year, merging its Indian and pan-regional businesses. “Given the rapid growth and increasingly competitive environment in India, we decided it was the right time to acknowledge India’s close alignment to Asia,” says Tom Keaveny, the executive VP and managing director. “The integration provides the team in India with access to greater resources and expanded career opportunities and will help drive continued growth for our business by improving efficiencies.”

Discovery has applied to Indian media authorities for licenses to launch Discovery HD, Discovery Science
and Discovery Turbo—which is replacing Discovery Real Time in several markets across Asia. Elsewhere, Discovery is looking toward growth in Indonesia and Vietnam, Keaveny says.

For E!, which is well distributed with a pan-Asian feed, localization is the key to growth in markets that have strong indigenous entertainment industries, like Australia. CIMG has launched a separate feed, which is ad-supported, for that market. “We create relevance with a focus on Australian celebrities that are making their mark in Hollywood—and there are many of them,” Fellowes says.

In Korea, meanwhile, CIMG recently inked a deal to launch a branded E! block on free-to-air broadcaster SBS. Fellowes notes that Korea is one of the company’s top markets for program sales, creating a fertile environment to bring the channel to the market. Local regulations, however, had stymied the launch of a full E! channel. The block, launching early in 2009, will feature a mix of signature E! programming from the U.S. with content about Korean celebrities.

For MTV Networks’ Jain, expanding into the terrestrial landscape is a smart move in a landscape where confining your business to pay TV means that you’re “boxing yourself into a very small segment.” Jain has taken the free-to-air route with Nickelodeon in Malaysia, signing a deal for a branded block on terrestrial behemoth Media Prima. “That’s how we’re dealing with the challenges of content and relevance and reach in a fairly restricted pay-TV environment.”

In Japan, meanwhile, the sector that everyone wants to be a part of is the broadcast satellite [BS] market. MTV Networks Japan has a daily branded block on the BS platform. “That gives us a reach that’s in the order of 20 million homes, above and beyond the 7.5 million we have now in cable and satellite,” says Peter Bullard, the executive VP and managing director of MTV Networks Japan and Korea. “Cable and satellite continues to be a relatively static market. BS is the platform that is really growing. Every new television set sold in Japan now has a chip installed that allows it to receive BS signals. The feeling here is that the 20 to 25 million BS homes that already exist will continue to grow, and we will end up with a platform that is almost national in Japan.”

DEFINING THE FUTURE

High definition is expected to be the next great frontier for channel brands in Asia. Discovery has been among the pioneers in the space, offering up its high-definition service in Japan, South Korea, Singapore, Hong Kong and Australia. National Geographic, too, has established its HD feed in several markets.

“I don’t think you can [talk to] any operator in any major market in Asia today without HD being part of the conversation,” notes Alan Hodges, the managing director for AETN International’s operations in Asia.

History HD has launched in Singapore and Hong Kong. “From a consumer perspective, it’s clearly not at a critical mass. But any operator you talk to today thinks that they need HD within the next 12 months,” Hodges says.

While the pay-TV platforms may have been slow to upgrade their offerings, there is plenty of technological innovation taking place in the mobile and online sectors in Asia, so it’s no surprise that major brands are making a significant play for the new-media space. “The mobile-handset market presents an incredible challenge and incredible opportunity for those of us who own our content,” AETN’s Hodges notes.

“We’re partnering with major online players in Asia to give ourselves reach,” says MTV Networks’ Jain. “We’re partnered with Boonty, the largest online gaming platform in Asia, with somewhere in the region of 200 million page views. We’ve got the MTV video player embedded on some of their sites.”

For MTV Japan, meanwhile, mobile is the priority medium. Last year the company launched MyMTV, a mobile social-networking, blogging and entertainment service for Japanese consumers. “We now have about 325,000 registered users and about 4.5 million to 5 million page views a month,” Bullard states. “For a new launch in a cluttered, competitive world, that is pretty good.” Discussions are under way about the possibility of taking MyMTV to other international markets.

At CIMG, mobile and broadband offerings have rolled out
to Korea, Singapore, Malaysia, Australia, New Zealand and Sri Lanka, Fellowes says. “We’ve seen great success in mobile with the E! loop, 90 minutes of long- and short-format programming, which is refreshed daily. As the authority in Hollywood entertainment, we also license individual clips and programs, photo galleries and RSS feeds to many of the portals in the region.”

TENA has heavily invested in delivering content to cell phones as well as creating online destinations for Cartoon Network audiences, Saha says. As the market becomes increasingly crowded, creating “multiple touch points” for consumers is essential to remaining competitive. “The top priority for TENA is to aggressively leverage the power of our brands and our TV network reach and to make the most of the growing digital technologies and platforms.”

The big question mark in Asia, though, is still China. Despite years of effort, most channel brands remain locked out of this huge land of opportunity. “China is the big prize,” says MTV’s Jain. “All of us are standing in queue to set up something worthwhile in China. What one requires is an intensely localized business, predicated on understanding the culture, the complexity. We have to respect the fact that it is not only the most ancient, but one of the most evolved cultures in the world. It’s worth our while to build up something from scratch.”