ContentAsia June 2017 by ContentAsia

ISSUE THREE 2017

NTENT

The big stuff $$ + sense in Asia’s video industry

Balance of power Hollywood vs Asia

PLUS Drama rules & crime pays in Asia, and other video consumption insights

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contents...

what’s inside...

Dissolve/[resolve] Asia’s SVOD subscriber landgrab is in full swing, playing out against a wild background where “everything is dissolving”. Guardian The Lonely and Great God, CJ E&M

We launched GEM channel to respond to shifts in viewership towards Asian content.

Balance of power The balance of power on Asia’s streaming platforms is shifting, pushing Hollywood content from

Sue Fujimoto, Nippon TV

page 10

80% of viewing to about 50%. ContentAsia asked rights holders how they’re dealing with the shift. Encantadia, GMA Philippines

Streaming platforms ... have an amazing ability to determine the value of various types of content.” Ken Lo Sony Pictures Television Asia Pacific, page 10

Taboo, Sonar Entertainment

Asia will bring a lot of new storytelling trends to the drama landscape.” Sonia Fleck Bomanbridge Media

Page 10

Crime pays Crime drama is killing it in Asia, topping the list of the region’s most in-demand categories for the first quarter of the year, Parrot Analytics’ data shows.

contentasia issue three, june 2017 Oddbods, Bomanbridge Media

editor’snote

Passion killers Of all the sexy video things going on right now, any talk of minimum guar-

bring great content to that market,” Johnston says.

antees for content is a passion killer for the industry’s latest heartthrobs –

Programmers, many of which are being squeezed on linear carriage

telcos. And telcos, however much they are loving the attention, are not

discussions with long-time traditional partners, know they need new best

being coy about their support for revenue share models instead of MGs

friends. But they’re wary of negotiating positions that commoditises or

and sharing the risks of experimentation and innovation.

devalues their content in any way.

All of which is something of a freak-out for rights holders/channels, who

“Ultimately, this is a pay business and we have to make sure there is

say they need a certain level of security in order to invest so heavily in

a perceived value in the product by the consumer,” says FOX Networks

high-end content that drives video subscription and, ultimately, data

Group Asia president Zubin Gandevia. “We are very clear that we will establish a real value in the consumer’s

take up. Who’s right. Or wrong? Neither. Possibly both. New world. New mod-

mind for this product. We are not in the business of

els. New arguments, some based on early first-hand experience of forays

giving away for free... We want to build a real

into on-demand that went badly. Between now and a final answer, de-

ecosystem that is sustainable and the only way

bate is hot and heavy.

we can do that is by consumers seeing real val-

“Everyone wants an MG,” says Globe Telecom (Philippines) president and CEO, Ernest Cu. “We said maybe, but nowadays remember that we are all building a market together. We have to work together and edu-

ue and engaging with our product and being willing to pay for it,” he says. Gandevia sees periodic heated discussion –

cate people on online streaming. We believe the market will turn…. MG

new and old – as part and parcel of doing

[for content] is not the right model,” Cu told delegates at the Asia Pacific

business. “Of course a platform says these

Video Operators Summit (APOS) in Bali at the end of April.

are our subscribers and we are giving you

Indonesian telco Telkomsel’s director/chief marketing officer, Alistair

the privilege of accessing them. And we

Johnston, echoes the sentiment, adding that the company invests US$1.2

look at it and say it’s our content and you

billion a year in its network. “The traditional model of subscription pack-

are building your business on the back of

ages for content with a big MG, I really think this has to be revised,” John-

that,” he says.

ston says, outlining the possibility of co-mingling products to allow sub-

“The truth is it’s a bit of both,” he adds,

scribers to cherry-pick the content they want no matter where it comes

highlighting something more important:

from, and at the same time managing data.

“That we don’t take our eye off the long-

Telcos like Telkomsel are not, they stress, advocating free program-

term goal of building a real business”.

ming. All they’re doing, they say, is pushing for a model that maximises the value of premium content. “Indonesia has 265 million people. Half of them have access to broadband devices in their palm of their hands. The vast majority of them are not paying a penny for content today. They are watching either pirated content or not watching video at all and I think there is an opportunity to

C Editorial Director Janine Stein Assistant Editor Malena Amzah malena@contentasia.tv Research & Production CJ Yong cj@contentasia.tv Editorial Aqilah Yunus aqilah@contentasia.tv Design Rae Yong

NTENT ASIA

INTERNATIONAL Associate Publisher (Americas, Europe) and VP, International Business Development Leah Gordon leah@contentasia.tv ASIA Sales and Marketing Manager Masliana Masron mas@contentasia.tv

What is ContentAsia?

ContentAsia is an Asia-based information resource that refines today’s info-deluge into usable, digestible, and reliable intelligence about entertainment content creation, funding, financing, licensing, distribution, design and branding and technology across the Asia-Pacific region. ContentAsia’s range of products include electronic, print and online publications.

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contentasia issue three, june 2017

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who’swatching

Changing Dynamics: Industry Revenue Share 2017

2012

2022

15%

30%

28%

38% 47% 50%

CAGR 6.2%

CAGR 7.3%

47% Copyright: Media Partners Asia (MPA)

42% US$83 bil.

US$118 bil. Free-To-Air

Pay-TV

US$160 bil. Online Video

Dissolve/[resolve] Asia’s SVOD subscriber landgrab is in full swing, playing out against a wild

Video Industry Incremental Share: APAC ex-China

background where, in the words of Media Partners Asia (MPA) executive director and co-founder, Vivek Couto, “everything is dissolving”. Delivering his signature opening keynote at this year’s Asia Paciﬁc Video Operators Summit (APOS) in Bali at the end of April, Couto outlined

India

Free-To-Air 6%

20%

Digital

Pay-TV 54%

40%

a re-tooled video distribution environment of realigned operations and

Korea

30%

SE Asia

35%

costs. “Fixed cost businesses will have to grow revenues or reduce costs to remain viable,” he said. The future, he added, was all about replacing today’s content, programming, distribution, acquisition and servicing habits with new prac-

Incremental Revenue

US$13 bil. (2017-22)

tises. The 24/7 content cycle, for instance, would be replaced with an in-

Japan

100%

Australia

100% TV

Digital Video

creased emphasis on quality over quantity. Programming would evolve from asking audiences to adapt to pre-set schedules to using recom-

Video Industry Incremental Share: APAC

mendations. Distribution would shift from capital intensive ﬁxed costs to variable opex. Acquisition would switch from a customer acquisition team to subscriber acquisition driven by programmatic advertising. And, ﬁnally, customer servicing teams would be replaced by chat bots.

Free-To-Air 1%

Digital

Pay-TV 32%

67%

MPA expects a full transition to IP-delivered video and the emergence of IP-enabled boxes as an alternative platform. Data presented at APOS showed digital pay-TV subscribers rising from 176 million in 2016 (ex China) to 215 million in 2022. Of these digital subs, IP-enabled box penetration (17% in 2016) is forecast to rise to 32% – 68.8 million subscribers – by 2022. It’s only a question of how soon, Couto said, adding that the traditional

Incremental Revenue

US$42 bil. (2017-22)

ecosystem is being replaced or augmented by a new “ecosystem” with 3

contentasia issue three, june 2017

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who’swatching

Southeast Local & AsianCreators content creators should beneﬁt SE Asia: Local Asia: & Asian Content Should Benefit Indonesia

Now

Future

30%

40% 60%

70%

ased on hours streamed

Asian

Hollywood

* based on hours streamed

a competitive landscape featuring players with no legacy costs. He also highlighted the rise of local-language online video platforms, which he said had only just begun. Online video’s share of revenue in the Asia-Paciﬁc region is forecast to double from this year’s 15% (US$17.7 billion) of the total US$118 billion to 30% (US$48 billion) of US$160 billion in 2022. Pay-TV will drop from a 38% share (US$44.8 billion) of this year’s US$118 billion to a 28% share (US$44.8 billion) of US$160 billion in 2022. Of the video industry’s incremental revenue of US$42 billion between 2017 and 2022 (including China), 67% (US$28 billion) will go to digital, 32% (US$13.4 billion) will be from pay TV and 1% (US$0.42 billion) from freeto-air. Excluding China, pay-TV takes the lion’s share of the video industry’s US$13 billion incremental revenue, with 54% (US$7 billion), digital 40% (US$5 billion) and free to air 6% (US$0.8 billion). In Japan/Australia, 100%

…But Revenue Growth Will Be More Moderate

of the incremental revenue will be from digital, dropping to 20% in India, Behind this change is “rapid transformational growth in wireless broadband”, from 32% penetration (excluding China) of the Asia Paciﬁc population of 2.3 billion in 2016 to 63% of the 2.4 billion population in the region in 2022. Fixed broadband will grow more slowly, from 22% penetration of 555 million households in the region (excluding China) to 25% of 598 million homes in 2022. “The subscription ecosystem is changing rapidly,” Couto said, adding that SVOD reach would continue to grow substantially to 80 million subscribers in

1200 SVOD revenues in US$ mil.

30% in Korea and 35% in Southeast Asia.

1000 800 600 400 200 0 2016

2017 India

2018 SE Asia

2019

2020 Australasia

2021

2022

Japan

2022 from less than 30 million last year. Revenue growth, he added, would be more moderate. And, he warned, a “hard reset” was on the way for SVOD platforms with churn at 70% in year two and 60% in year three.

Source: Media Partners Asia

contentasia issue three, june 2017

Where time and fate traverse Tunnel 60 min x 16 episodes / HD / Crime Series

CJ E&M

Kill Me Heal Me, MBC Korea

Balance of power The balance of power on Asia’s streaming platforms is shifting. While Hollywood still commands a signiﬁcant viewership share, local content – particularly Korean – is rolling back studio dominance. ContentAsia asked international & local rights holders how they’re dealing with the shift. at least not to us.

Asian content consumption on streaming platforms in Asia has risen dramatically, pushing Hollywood

“U.S. content may be representing a smaller per-

content from 80% of viewing to about 50%. The re-

centage of the overall content mix, but in absolute

maining half is split between Korean (30%) and a mix

volume terms is still very signiﬁcant,” says Brendan

of other content from across Asia (20%), according

Zauner, 20th Century Fox Television Distribution’s se-

to research from Media Partners Asia (MPA).

nior vice president, Asia Paciﬁc.

The swing towards Asian content differs across

Ken Lo, Sony Pictures Television’s Hong Kong-

markets. Among the sharpest shift is in Indonesia,

based senior vice president, international distribu-

where 70% of the content streamed today is from

tion for Asia Paciﬁc, says Hollywood movies, par-

Hollywood. This is forecast to drop to 40%. Viewer

ticularly action, thrillers, suspense and animation,

migration is less dramatic in Thailand and the Philip-

continue to do well in Asia. The sentiment is echoed up and down the cor-

pines, where Asian content consumption is expected to rise from today’s 30% to 40% in future, with

Ken Lo, Sony Pictures Television

Hollywood still commanding more than half of the hours streamed.

ridors of Hollywood blockbuster power in Asia. “Great stories and characters will always ﬁnd their way into the hearts

How are rights holders dealing with this shift in fortunes?

and homes of consumers everywhere,” says Mark Chan, The Walt Disney

With a sense of inevitability, a positive spin, a focus on (and, for some,

Company Southeast Asia’s head of Disney Media Distribution.

a pivot towards) local production and experimentation, and by point-

20th Century Fox’s Zauner adds that recognisable brands remain “the

ing out that a smaller share of a larger pie still makes for a very signiﬁ-

key to the subscriber door” for many OTT services... and will continue to

cant business. There is almost universal recognition that platforms and

do so. “Good operators realise that recognisable brands bring people

programmers are on the hunt for unique selling points and they see Asian

in,” Zauner says.

content as a signiﬁcant differentiator. If U.S. distributors are concerned, they’re not talking about it in public –

Disney’s Chan says the studio’s movies and series “still occupy the highest share of viewing on streaming and continue to be a great opportu-

contentasia issue three, june 2017

Turner We Share Stories Ben 10 Grizzy & The Lemmings Quest Express CNN With the World Saimgdang Seoulmates Across Time Oh!K Impractical Jokers TruTV DC’ Legends of Tomorrow WBTV News – Entertainment - Kids

Tokyo Tarareba Girls, Nippon TV

Don Kang, CJ E&M

Sue Fujimoto, Nippon TV

nity for us in this region”. Meanwhile, the love for Asian content comes in different shapes and sizes, and is newer for some than others.

David Ellender, Sonar Entertainment

Manuel Paolo J. Laurena, GMA

television producer Deepak Nayer and the Reliance Group. So far, the alliance has yielded three drama projects based on local IP with Indian creative talent attached and aimed at domestic OTT and premium players.

Lo points out that Sony Pictures has, since the 1990s, acquired rights to

“We want to broaden our scripted portfolio and creative relationships

Asian content, including Stephen Chow’s Mermaid in 2016 and Journey

to take advantage of regional growth in local production,” says David

to the West 2 this year. The studio has also begun production on a three-

Ellender, Sonar Entertainment’s president, global distribution and co-pro-

part, big-budget action-series, based on U.S. action series Chosen, with

duction.

mainland Chinese streaming platform, iQiyi, and is “in active discussions

Disney is also working with partners across Asia to create more local

in other parts of Asia on acquiring and producing both local features

content and experiences for consumers, Chan says. This includes a broad

and series”. No further details have been released.

parternship with Globe Telecom in the Philippines for, among other initia-

Zauner points to 20th Century Fox’s scripted format strategy to address market changes. The poster-production is last year’s Hindi version of U.S.

tives, two-minute tearjeker I Dare to Dream, around Rogue One: A Star Wars Story.

crime thriller, 24, on Viacom’s joint-venture Hindi general entertainment

Disney’s original content strategy in Asia is perhaps most advanced in

channel Colors. “A good story travels across borders and attracts people

India, where the experimentation involves creating series – such as The

to the platforms that acquire or produce them,” he says.

Trip and Girl in the City – that permiere on Facebook, then YouTube, with

India is a co-production/development hotspot. U.S.-based indie en-

a third window on traditional television. Walt Disney International chair-

tertainment studio, Sonar Entertainment, is already some way down the

man, Andy Bird, says 12 projects are currently in development. Speaking

local co-production path here in a creative partnership with ﬁlm and

during the Asia Paciﬁc Video Operators Summit (APOS) in Bali at end

contentasia issue three, june 2017

JULY 4-6, 2017 CONRAD, HONG KONG

As the worlds of broadband and video collide and converge, the future of media & telecommunications is at stake. Technology is playing a critical role in unlocking value from consumer eyeballs and wallets. Media and telecom operators are at a crossroads amidst changes in hardware and software, the evolution of broadband, sector consolidation and the rise of online video. APOStech, hosted by Media Partners Asia (MPA), will discuss, debate and address key drivers and challenges anchored to technological innovation and integration, while focusing on new investment opportunities for operators.

Apply for invitation: lavina@media-partners-asia.com Sponsorship inquiries: jeffrey@media-partners-asia.com

Summit Sponsors

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Associate Sponsors

Start Up, Sony Pictures Television

Haewon Chin, MBC Korea

Sonia Fleck, Bomanbridge Media

April, Bird said the goal was to “create a digital ecosystem where our brands are front and foremost”.

Taka Hayakawa, Fuji TV Japan

Archana Anand, Zee Digital

At the same time, he points out, the balance between local and foreign content on streaming platforms is neither static nor guaranteed. “As

Turner, which has for years operated low-key Asian properties like Ja-

the streaming/on-demand platforms accumulate more data, we be-

pan’s Mondo TV, is taking a diverse approach to evolving its content

lieve the balance between Hollywood and Korean content will continu-

business in Asia. Initiatives include acquiring distribution rights to high-pro-

ously change back and forth,” Kang says.

file Korean properties, experimenting with developing its wholly owned

Expectations are that increased activity in the production space will

property, Tuzki, in China, and adding locally produced content to gen-

change the landscape for everyone. Kang says CJ E&M’s bid for a bigger

eral entertainment channel Warner TV in partnership with Malaysian plat-

viewing share will drive genre diversity and creative experimentation.

form Astro. Most recently, a newly minted partnership with Singapore-

Bomanbridge Media’s founder and chief executive, Sonia Fleck, also

listed production house, mm2 Entertainment, involves Turner Asia Pacific

expects a creative evolution driven by international exchanges of talent

in five theatrical movie projects over the next three years.

and scriptwriting. “Asia will bring a lot of new storytelling trends to the dra-

While they’re loving the attention, Asian producers and content rights holders are pushing an expansion agenda that includes a higher profile

ma landscape… Hollywood studios will of course take part in this evolution and I expect to see some very interesting collaborations,” she says.

on the international stage and more international co-operation, particu-

Asian rights holders appreciate the boom as consumers embrace

larly with the U.S. And the U.S. is clearly, for better or worse, loving them

home-grown content on-demand. But they’re also aware of the pitfalls.

right back with co-production/co-development ambitions that runs from drama co-creation to scripted formats adaptations.

Fuji Television Network’s director, worldwide production and sales, international department, Taka Hayakawa, points to the “paradox of choice”

“Considering the popularity of Korean content in the region, we see this as

that has given rise to audience frustration. “Too much choice and too

a natural shift,” says Don Kang, CJ E&M Korea’s head of international sales.

many options cause confusion and create anxiety to the individual,” he

contentasia issue three, june 2017

says. “Once the choice is made, there is often a feeling of a sense of

GEM. Nippon TV’s Sue Fujimoto, executive vice

loss, the individual feels that they have given up something of

president, international business development,

equal value. This ultimately leads to dissatisfaction with the

says GEM was a response to viewing shifts in Asia.

final choice the individual makes,” he adds.

The channel is currently available in six countries

A few Asian markets – particularly those with drama

and regions in Asia.

production capabilities and libraries – are reaping bet-

India’s Zee TV, meanwhile, is driving a dual distri-

ter rewards than others.

bution strategy, running an aggressive inter-

“More and more buyers who were not previously

national expansion campaign alongside

sourcing at our content are inquiring about titles for their

a commitment to deepening reach

programming needs,” says Manuel Paolo J. Laure-

across India across multiple platforms,

na, GMA Worldwide’s senior sales manager.

including OTT service dittoTV.

Given its audience and provided there’s suf-

“Between 2015 to 2020, viewership

ficient language customisation, global kids

of Hindi and other regional language

properties look like they are reaping the big-

content is predicted to grow five times

gest benefits of exploding distribution options.