Discovery’s Simon Robinson, Netflix’s Tony Zameczkowski, Viu’s Helen Sou and WarnerMedia’s Clément Schwebig weighed in on the streaming wars and the impact of COVID-19 on the media business in a panel at the AVIA OTT Virtual Summit this week.
The session, Thought Leaders’ Talk: Setting the Stage for Streaming, was moderated by Louis Boswell, the CEO of AVIA.
“It’s a great time to be a customer in this part of the world,” said Zameczkowski, the VP of business development for AsiaPac at Netflix, on the growth of the region’s OTT landscape. The arrival of new players, global and local, “is great for the industry as a whole because it really helps to build the category. The other thing we see is Asian stories have been a domestic business for quite some time, and with the success of movies like Parasite, we see a tremendous demand for Asian content. I really feel that the streaming industry has a role to play in bringing Asian stories to the world. We have been heavily investing in local content. We see tremendous traction, not only in Asia but in other markets like Europe and the U.S.”
Robinson, president of AsiaPac and CFO at Discovery International, says the company is taking a multipronged approach to streaming. “We’ve always built our business in partnership with our traditional distributors. We think in different markets there is a wide range of different business models that can be developed. In some places you’ll see us going direct to consumer, in others you’ll see us heavily investing in partnerships with our traditional distribution partners, and in others, we’ll invest with new partners.”
Schwebig, managing director for Southeast Asia, Pacific and China at WarnerMedia Entertainment Networks, discussed the company’s experiences with HBO Go in the region. “We are at the beginning of our journey with HBO Go. We’re laying the foundation for what we believe is a great product. We are in direct-to-consumer, but also working with our affiliate partners and telcos in the main territories of Southeast Asia. We’ve seen a lot of traction for our product and we’re developing local stories which we believe appeal to the local audience. We also have, at the same time, a great library of content.”
Zameczkowski referenced Netflix’s growth in Asia since 2016 when the platform had just two offices in the region. “We quickly recognized that in order to succeed in Asia, you need to be hyper-local and you need to invest in Asian stories. That’s what we did. We’ve invested in 200 Netflix originals” in Asia, with about 50 of those coming from Korea. “We see that content really traveling well across the region. Kingdom did extremely well in Korea and Southeast Asia. Given that success, we decided to double down and this year we will release 25 more originals from Korea.”
Zameczkowski also pointed to the importance of partnerships with telcos and pay-TV operators in the region, such as PCCW in Hong Kong. “We’ve been working closely with operators in the region to learn about this part of the world.”
Sou, the chief business officer for Asia at Viu and senior VP of digital media at PCCW, talked about the success Viu has had with its dual subscription and ad-supported models. “From the beginning, our focus has been on building a dual revenue model. We believe there is great potential for SVOD, but the market is very diverse in terms of data charges, affordability and payment gateways. We see massive usage on mobile devices and video consumption online, so we need to capture this opportunity to support our advertising model as well for immediate monetization. We are very balanced at 50-50.”
Discovery’s Robinson, referencing the variety of business models in the OTT landscape, noted, “None of them produce long-term, sustainable, positive cash flows at the moment. That’s what needs to get resolved. This is a massive market, a massive group of markets with largely positive GDP outlooks, even despite the post-COVID recession, with ad markets that are likely to grow faster than any other markets in the world, a fast-emerging middle class, a more mobile community than anywhere else in the world, more active e-wallets. This is a set of markets that clearly strong storytellers will be able to monetize, from traditional subscription models, hybrids, pure ad-sales plays, and even more interesting an extended e-commerce slate build around some of our content. We’re confident there’s a wide range of profitable, long-term businesses to be built here, and scale is important.”
Going ad-supported is not part of Netflix’s strategy, Zameczkowski said, but the company is working on making pricing more accessible in the region, such as its mobile-only tier in India. “We also work on bundling so you pay one price and have access to multiple services.”
Subscription is also the sole emphasis at HBO Go, Schwebig said. “We are working to try to make it more available. We’re looking at data bundles, which help in a lot of the markets we’re operating in.”
There have already been casualties in the Asian streaming space (notably, the fall of Hooq earlier this year), but there remains room for new entries, Discovery’s Robinson said. “I think there will be more money from existing players, I think you will possibly see new entrants, and there will be some casualties. Ultimately, it’s about the consumer experience. The real winner is the consumer. They are getting access to better content than they’ve ever had, multiple platforms and incredible pricing. Because of the scale of the market, there’s room for us all to grow and succeed. For the consumer, the future is here, for us as an industry we’re still weeding our way through it.”