AsiaPac Streamers Chart New Paths Amid Intense Competition


Local and regional OTT platforms in Asia are seeing gains as they face off against the global giants for a share of consumer time and spend; Viu’s Janice Lee, iQIYI’s Yang Xianghua, Hulu Japan’s Kazufumi Nagasawa and U-NEXT’s Tenshin Tsutsumi shared their content and expansion strategies at APOS this week.

Viu has built up a significant base of users across Asia with its pay and free tiers. Korean content has been key to its success, with Q1 seeing the arrival of its first original from that market, River Where the Moon Rises. It has also been building its slate of Chinese-language shows and anime, said Janice Lee, CEO of the service and managing director of PCCW Media Group. “The strategy is to provide more of what the consumers want in the markets we operate.”

Lee said Viu has the “widest selection, most comprehensive library,” of Korean shows. “At the same time, with the many years of learnings, we also want to start investing into IPs as well. With regards to anime, we have experimented in various markets and we’ve seen very consistent usage. We now have a significant user base and are comfortable expanding that part of our portfolio as well.” In terms of Chinese content, The Long Ballad arrived on Viu this quarter. “The overall content strategy will also include bringing our own ViuTV content from Hong Kong and distributing that across the platforms we operate.”

She added, “We’ve always stayed true to being a pan-regional, Asian-content-centric proposition. Korean content continues to be popular. There is increased competition and interest in that area. We’ve always set out to balance the portfolio. As we’ve gathered more data and analytics, we’ve been tapping into that knowledge to fine-tune our proposition, including Viu originals in local markets. In 2020 you saw us increasing our investment into Viu originals in Indonesia, Thailand. We’re developing original content that is even more locally relevant to them.”

Despite the increasing originals slate, “partnerships are still critical,” Lee said.

“Having a bigger portfolio allows us to create more distinctive layers of our service that drive people to subscribe,” Lee added. “We have been putting more content behind a paywall. We can only do this when we expand our content portfolio. We still believe in AVOD, we tap into both markets, but with more content, we can make a clearer distinction” between the free and pay tiers.

“We are looking to see if we can pull together the budgets from various markets’ local productions to create something much more impactful on an original basis as well.”

Giving low ARPU rates across the Viu footprint, having an AVOD offering is essential, Lee explained. “Against the premium content, we maintain a premium CPM. For us, AVOD is not just about the CPM; it’s about the formats we can create that are relevant to our platform.” Lee referenced a campaign with Coca-Cola that included a watch party with the stars of the Indonesian original comedy Star Stealer, which emerged from Viu’s own pitching forums for local content.

Yang Xianghua is the president of membership and overseas business group at iQIYI, overseeing the expansion of the entertainment service outside of China. The platform has been steadily picking up traction in Southeast Asia. “We had quick growth in 2020,” he said, “largely due to expanding our premium Asian content. We have Chinese dramas, we also launched several Korean contents.” In the second half, the platform also rolled out local shows from Malaysia and Thailand, Yang noted.

iQIYI raised its SVOD prices in China last year, Yang said, raising the Gold VIP rate by 26 percent. “This is the first time in China anyone has adjusted the price in the last ten years,” he said. While new additions slowed, the platform saw good subscriber retention rates, he said. Increasing smart TV penetration rates is creating opportunities for subscriber additions, Yang continued. The platform is also using new technologies to improve the customer experience, such as extended reality (XR) live concerts.

On the overall content strategy at iQIYI, Yang said: “The goal is to be the home of great Asian content. Our first focus is on building a great slate of content, both original and licensed. Other than Chinese content, we are committed to bringing to the users high-quality Korean dramas, animation and other local-language content.” The original content team in China is making dramas, variety shows, animation and films. There’s a team in South Korea to produce dramas and one in Japan to acquire more local anime. Yang said iQIYI is teaming with a Singaporean company to set up a talent management firm “to find local talents in Southeast Asia and give them the platform to access the market in China. We believe the talent pool in Southeast Asia has great potential to succeed in the international space.”

He added, “We hope to strengthen our cooperation with the production companies in the region and also with the creative talent in the region to create great content that will be accepted across the region.”

On iQIYI’s international expansion, Yang said the service is up and running in Malaysia, Thailand, Indonesia, the Philippines, Singapore and Vietnam. In the key markets of Malaysia, Thailand and Indonesia, usage and subs numbers are growing quickly, he said, with the platform using a freemium model. “It’s easy to access our service,” he said. “If they want some extra service like better quality, better sound effects and early watching advantage, they can be a subscriber and pay a very small fee.” Both free and pay are seeing gains.

Going forward, the platform plans more local content, including originals in Malaysia, Thailand and Indonesia. “And we will keep upgrading our tech to enhance the user experience and the content creation cycle to save money in production costs. Third, we will invest more in the marketing side to promote the content to attract more users.”

The Japanese OTT market includes 20-plus players, including the global giants, broadcaster-backed platforms, telco services, niche genre platforms and AVOD operators. Among the key local players are U-NEXT and Hulu Japan.

Kazufumi Nagasawa is the managing director and chief content officer of HJ Holdings, which operates the Hulu service in Japan. Growth in the sector and at the platform was significant in Q1 and Q2 last year, slowing in the second half, Nagasawa said. Gains in the first quarter were due to Covid-19, while the second was boosted by key shows like the co-pro The Head and reality series Nizi Project.

In terms of what’s driving viewership, the biggest consumption is coming from anime, local drama series and variety shows and imported scripted, Nagasawa said. A breakout hit last year was Nizi Project, about the creation of a new girl group, NiziU, which drove new subscriptions.

Addressing Hulu Japan’s anime lineup, Nagasawa said the company uses a revenue-sharing model. “Most of the anime producers in Japan are willing to put the content on our service. As viewers watch, [the content owners] get paid.” Most of the slate is non-exclusive, “as a result, our lineup is one of the biggest in Japan.”

On the originals front, Nagasawa noted, “We’re not producing that many shows yet every year. That being said, the importance of original content is increasing year by year and will increase going forward. We foresee our focus will shift to originals gradually in terms of the budgets.” Hit originals have included Miss Sherlock with HBO Asia and, more recently, The Head, with The Mediapro Studio and HBO Asia. Several new co-pros are in the works, he added.

More than 70 percent of the Hulu Japan slate comes from the local market. “We foresee this will increase going forward. That being said, a good selection of international programs is what differentiates us from other services, especially the ones owned by broadcasters.”

The Nippon TV shows available for catch-up on Hulu Japan help to drive new subs. “But people tend to unsubscribe easily when they finish watching what they want to watch. Typically it’s ten episodes. But if they’re engaged with [long-running] foreign TV shows, once they start watching those, they will keep watching for hundreds of hours. That helps to maintain the subscription.”

Asked about device partnerships, Nagasawa said the platform invested in getting Hulu added as a button to remote controls for a range of TV sets. That move did not boost new subscriptions but did raise engagement.

On the Japanese landscape in the years ahead, Nagasawa said two or more broadcasters working together on a joint service would be a “game-changer.”

The Japanese OTT market expanded to $3.9 billion in 2020, according to Tenshin Tsutsumi, president and representative director of U-NEXT, driven by Covid-19. For the first time last year, OTT eclipsed theatrical and home-entertainment revenues in Japan. The OTT market is expected to hit $6.6 billion in 2025. Tsutsumi said there’s a tremendous growth opportunity, given that only 28 percent of the Japanese population currently uses video streaming services.

U-NEXT is Japan’s only wholly independent OTT operator, he continued, and is the third-largest service in the market after Netflix and Amazon Prime and the leading domestic one with a share of more than 10 percent. Its success is derived from its broad mix of domestic (movies, series, variety and anime) and international (U.S. and European movies and series and Korean dramas) content. The offering is currently 60 percent domestic—acquired and original—and 40 percent international. “There are not so many players who are good at both worlds,” Tsutsumi said. “U-NEXT is one of the few players who have strengths in both.”

Last month, the platform secured a deal to bring HBO Max content to its lineup. “We have exclusive rights to distribute their content.”

U-NEXT’s app also delivers live concerts, music and graphic novels. “Users can read novels or manga that inspired a movie or anime they watched, listen to music from an artist featured in the theme song of a series and seamlessly transition between video streaming, e-publications and music.”

On the crowded Japanese landscape, Tsutsumi observed: “Market consolidation is inevitable.”