Watch This Space


NEW YORK: Mansha Daswani looks at how amid market disruption and economic concerns, Asia’s leading multichannel brands are charting new success strategies.

Fragmentation. Disruption. Opportunity. Change. Talk to anyone involved in the multichannel business in Asia (or anywhere, for that matter) and you’ll hear those words time and again. After years of surging growth in the pay-TV ecosystem, speed bumps have popped up across the region, prompting Asia’s leading pay-TV brands to rethink how they produce, program, schedule and distribute their services.

The good news is that the forecasts are still upbeat—albeit far more measured than they were in the past. A study last summer from Media Partners Asia—which stages the Asia Pacific Video Operators Summit in Bali this April—found that subscriber and revenue growth is slowing across the Asia Pacific pay-TV business. Nevertheless, the sector is still expected to increase by a compound annual growth rate of 6.6 percent from 2014 to 2019. The Asia Pacific Pay-TV & Broadband Markets report projects a “robust future” for the business, with revenues rising from $52 billion last year to $72 billion in 2019 and $84 billion in 2023.

The leaders of Asia’s biggest pan-regional groups concede, however, that it’s not going to be easy. “The market has changed,” observes Zubin Gandevia, the president of FOX Networks Group Asia. “It continues to evolve with the entry of new players—both in the new OTT space we all know about and in the traditional space.”

The arrival over the last year or so of regional, low-cost over-the-top streaming services, and the wide rollout of Netflix this year, have made it clear that the market is shifting. The key, executives agree, is having a comprehensive strategy to respond to those changes.

“The disruptions in the short term by the OTT entrants can be viewed as challenges,” notes Hui Keng (HK) Ang, the senior VP and general manager of Sony Pictures Television (SPT) Networks, Asia. “The question is how fast we can turn this into an opportunity.”

Gandevia says that one knock-on effect of OTT’s arrival is a short-term escalation in content prices, given the newly competitive environment. “But the good thing is there’s more dynamism in the market. A good OTT offering leads to less piracy, which is good for all of us. A lot of these territories are still at low pay-TV penetration. We include OTT in pay TV—it’s the same thing, it’s just another way to get video out there. It effectively increases the penetration of pay TV.”

Ricky Ow, the president of Turner International Asia Pacific, says that the rise of SVOD services in Asia reflects not only changing consumer trends but also a willingness on the part of audiences to spend money on the shows they want. OTT services in Asia, he says, “will help the pay-TV market redesign the current offering and its proposition—in particular, the way it programs and sells its products to the consumer.”

Ow predicts that “traditional media will reshape its offerings in a very short space of time and become more like these disrupters with a hybrid model. SVOD and OTT providers will co-exist, but the products from the incumbent players, having learnt a lot from these new players and each other, will all start to look very similar in terms of what they offer and how they operate.”

Christine Fellowes, the managing director for the Asia Pacific at Universal Networks International (UNI), agrees that the arrival of new competition, linear and digital, means that pay-TV chiefs will have to adjust their programming and scheduling approaches. “We’re making sure we’ve got unique offerings and we’re aligning ourselves very strongly with our platforms,” Fellowes says.

At Viacom International Media Networks (VIMN), Mark Whitehead, the executive VP and managing director for Asia, observes that online viewing trends have prompted programmers to ask questions like, “How do you curate the programming on the linear channel? [Do you use] thematic time bands and thematic days? How do you deal with marathon scheduling? How do you keep discovery in the schedule? And then, What’s the windowing strategy across various linear and digital platforms?”

Rewind Networks made strategic scheduling a priority for HITS, a channel that was launched in part to respond to the fragmentation in the market. Avi Himatsinghani, the founder and CEO of Rewind, has positioned the fairly new channel as the home for classic American dramas and comedies—a key differentiator when most major pan-regional entertainment brands are battling it out for the latest hot show out of the U.S. When there are so many brands with a similar proposition, “that leads to confusion and sometimes alienation—you don’t know what to watch, when,” he says. “Our strategy is to build a habit among our viewers. I was sick of seeing fragmented schedules and [broadcast] times that were difficult to remember. We went back to the basics. Watch the show at the same time every weeknight or binge-view and catch up on the weekends.”

“It will always remain about content,” says FOX’s Gandevia about how to succeed in the evolving multichannel business. “The changing landscape is mostly on a distribution front. A good story is still a good story. Our number one endeavor is to ensure that we continue to have the best possible content, have it first on our brands—we don’t look at our business as a channel business anymore—have it exclusively as much as possible, and increasingly control all rights by making it ourselves. That’s our mantra: best, first, exclusive and our own.”

Being “first” has been a lead strategy for a number of Asia’s top general-entertainment channels, which have made day-and-date premieres business as usual.

“We live in a connected world and it is important for us to provide audiences in the region the best and the latest, otherwise we’d lose them to other sources of entertainment,” says Jonas Engwall, the CEO of RTL CBS Asia Entertainment Network. “From day one we focused on bringing our key shows to Asia day and date with the U.S.”

SPT has shortened the windows on its U.S. and Korean content for AXN and ONE, respectively, in large part to combat the piracy threat in the region. “You cannot fight pirates, but you can offer as compelling a service or better so that people can find a legitimate way to enjoy the programs,” Ang says.

Innovating their delivery methods is top of mind for Asia’s pay-TV channel execs as they come to grips with how consumers’ viewing habits are evolving. As such, being flexible with affiliate partners is paramount in order to cater to whatever a platform’s needs may be.

“We were lucky with the timing of our launch,” Himatsinghani at Rewind says. “Even though we were a latecomer in the linear pay-TV business, from day one we were able to secure live simulcast, streaming and catch-up on-demand rights on set-top boxes and OTT.”

The full suite of HITS’s nonlinear services is available on some of its most technologically sophisticated affiliate partners, including StarHub and Singtel in Singapore and Astro in Malaysia.

The prospect of losing customers to OTT should provide pay-TV platforms with the impetus to “buckle up and start moving very aggressively on ramping up TV Everywhere, on-demand and catch-up services,” Himatsinghani says, particularly when it comes to making “the user interface, the experience, as solid as ever.”

“We work with all our partners to try to make sure we’re giving them, obviously, the best linear channels, and to see what we can do as they develop and move forward into TV Everywhere,” says VIMN’s Whitehead.

That thinking prompted the creation of Viacom’s Play Plex mobile apps, which are coming to Asia this year. “We understand our affiliate partners want more from us [than the linear channel] and the Play Plex model works really well. It unlocks great value for the partners in giving the fans easy access to our curated content, at their convenience.”

SPT’s Ang says that nonlinear services are always on the table in negotiations with its affiliate partners. “We always ask what their plans are, so we can tailor [what we offer] to whether they just have linear TV Everywhere, which is a multiscreen solution, or they have very robust VOD catch-up services. Every platform has its own roadmap into TV Everywhere. There’s no uniform offering in this part of the world. Some [platforms] are very advanced and some are still in the feasibility study stage. Every country has different broadband infrastructure. Our basic operating principle is, we have the rights, and when the platform is ready, we find a solution to service them.”

Ow says that Turner has two ways it usually works with its affiliate partners. “If they already have a great user interface, we can help them further enhance their integrated experience by providing content for their catch-up services. Compared to some of the disrupter options out there, these options are really just as good, if not better; that is something that perhaps consumers don’t fully realize yet. Alternatively, we can provide a safe, fully-branded and curated environment such as the Cartoon Network Watch and Play app. We work with affiliates in Thailand and Australia to authenticate the app and offer subscribers a genuine TV Everywhere product with live streaming and a lot more, including games and exclusive content.”

Engwall notes that RTL CBS is “100 percent focused on a 360-degree content approach” that includes linear and VOD access on set-top boxes and on mobile and online. “We are still one of the few international channels that offers all content on all platforms,” he says.

It’s not just viewing that is shifting online—ad dollars are, too. “The ad market is an exciting one for us, but it has its fair share of challenges,” SPT’s Ang says. “There is disruption from all the digital outlets. Our solution has been to provide not just spot campaigns. We have strengthened our in-house resources in terms of original-production capabilities and we built upon our sales team. They are able to provide branded entertainment and partnership opportunities. It’s about how you integrate the client’s brand into content.”

“If you’re dependent on advertising sales for your revenue line, it’s not an easy environment,” says FOX’s Gandevia. “The good thing for us is, we’re not overly dependent on it. And because of our scale, we now have advertising operations in 11 of our 14 markets. So we are able to continue to grow. For some players it might be more difficult.”

“Money is shifting to digital in a fairly big way,” Gandevia continues. As such, FOX has made a foray into the digital advertising space with a FOX Sports website and app that have both free and authenticated sections. “If you’re just a consumer who doesn’t have our channels, you can get a rich offering of up-to-date news, highlights and some video,” Gandevia explains. “If you’re a pay-TV customer then you can log in and watch everything live. That should result in us being able to go after the ad money that is shifting from traditional, and also build the brand in this new medium.”

Last year was a positive one for Turner’s ad-sales business in AsiaPac, Ow says, with results beating the company’s expectations. “Our biggest successes were client solutions that went beyond the ordinary and demonstrated our advantages. This momentum will undoubtedly continue in the coming months.”

Key examples of Turner’s approach include Cartoon Network’s partnership with Prudential on the financial literacy program Cha-Ching and an animated brand-integration campaign with Unilever.

VIMN is also looking well beyond the traditional 30-second spot and, in stepping up its live-events business, has created a raft of new sponsorship opportunities for its ad clients. “We’re very good at driving engagement on the ground with these events,” Whitehead says.

Examples include MTV Music Evolution in Manila, a live event that attracted 22,000 people and was broadcast on MTV around the world under the MTV World Stage banner.

Fellowes at UNI acknowledges that the ad market in Asia for subscription television is “inconsistent,” with slow growth in pan-regional spend and challenges in the local ad-sales space as a result of economic pressures and unfavorable currency fluctuations.

In response, Fellowes says that UNI has been exploring more “creative solutions and building big campaigns with sponsors and local production,” including, for example, product integration in its original series How Do I Look? Asia.

HITS has also been looking at innovative models for the portion of ad time it sells on its own.

“Because we’re a basic-tier channel, in the entry level, we give away a big chunk of our airtime to our local affiliates to sell,” Himatsinghani says. “We’re focused on some of the residual airtime to reach the pan-regional advertisers. We’ve had some really fantastic partners come on board, including Disney and Subaru. In partnership with Subaru we expanded our marketing venture by working with our affiliates Astro in Malaysia and SKYcable in the Philippines to give away two cars [in a promotional campaign]. We continue to pursue iconic brands that would benefit from the halo effect of being associated with our hit shows.”

Perhaps the biggest challenge for channels looking for new ways to monetize viewing is that audience measurement in pay TV is inconsistent.

“Viewership data is lacking in most of the pay-TV markets,” SPT’s Ang says. “That’s why we continue to invest in our own research. We’ve just done some recently in Indonesia and Vietnam to supplement the data [we receive], so we have a better understanding of the profile [of the audience] and the viewership patterns.”

Turner, too, is upping its investment into research. Ow mentions regular surveys on demonstrating “how important and influential kids are in terms of household purchasing power.”

Having better data, execs agree, is crucial in this evolving landscape where the only constant is change. And in responding to change, many channel chiefs note that the most important strategy may simply be going back to the basics: making sure you’re delivering a service that audiences want to engage with, and that they know where to find you.

“What the consumer wants is changing—they’re looking for more personalized, social, shareable content,” says VIMN’s Whitehead. “We have challenges. And we’ve had significant growth in all of our markets across the core channels business. What’s driving that is great international and local content that really resonates with the marketplace.”

“In a world that is more fragmented, we believe that brands are more important than ever and we’re investing quite heavily in that,” says UNI’s Fellowes. “As there are more and more viewing choices, as people have a proliferation of apps and SVOD services and free video online and free to air and digital channels and the subscription-TV ecosystem, our belief is that for an audience, it is going to become more challenging to find something to watch! With all that choice it sometimes feels like an endless click-through on the remote control to find something. Our view is that curation will remain important in the future. We’re focused on taking our brands across multiple audience touch points.”

“In general, I believe that people make money in times of change,” says FOX’s Gandevia. “You’ve got to batten down the hatches. There’s a lot of tackling and blocking to be done over the next few years. If you can come out stronger you can be even more successful than you are today. That’s the way we see it. To do that we keep making the best product possible, continue to leverage our scale in order to get as much market share as possible and help the market grow, explore new areas and have a digital approach. The business is changing but in some ways it’s exactly the same. It’s the marriage of great content and great brands delivered in the most consumer-friendly manner possible.”