TV Asia MIPTV 2017

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TVASIA

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APRIL 2017

MIPTV & APOS EDITION

OTT Platforms / ZEE’s Amit Goenka / MNC’s David Audy

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CONTENTS FEATURE

Art or Science?

It’s not an easy time to be a programmer.

That job—figuring out what shows are going to deliver audiences, and loyalty— has never been easy, but these days, all your old guideposts may no longer apply.

Ricardo Seguin Guise Publisher Anna Carugati Group Editorial Director Mansha Daswani Editor Kristin Brzoznowski Executive Editor Joanna Padovano Tong Managing Editor Sara Alessi Associate Editor Victor L. Cuevas Production & Design Director Phyllis Q. Busell Art Director Simon Weaver Online Director Dana Mattison Senior Sales & Marketing Manager Nathalia Lopez Sales & Marketing Assistant Andrea Moreno Business Affairs Manager

Ricardo Seguin Guise President Anna Carugati Executive VP Mansha Daswani Associate Publisher & VP of Strategic Development TV Asia © 2017 WSN INC. 1123 Broadway, #1207 New York, NY 10010 Phone: (212) 924-7620 Fax: (212) 924-6940 Website: www.tvasia.ws

If you’re a big, terrestrial broadcaster, you’re still going for mass appeal, so-called “general entertainment” (whatever that means in a super-fragmented media world). If you’re a pay-TV service eager for engagement, and you need to prove to your affiliate partners that they should absolutely keep you as part of their offering, the science of scheduling becomes a bit more complicated. For one, it’s rough out there, as operators see greater and greater value in skinny bundles, culling their packages to those must-have brands. So how do you determine what your must-have content is, especially when audience measurement is increasingly lagging behind audience consumption trends? On that front, the OTT services have an edge—they can track exactly what shows drive subscriptions and viewership. But if you’re asking your consumer to pay a monthly fee, you need to have enough great content that makes it worth their while. What are your musthave exclusives? How much do you need day and date?

What’s your mix of international and local?

Media Partners Asia (MPA) recently released some fascinating data on content trends in Asia. The Asia Video Content Dynamics report found that improving economies and changes in the distribution ecosystem are creating a more competitive landscape that is giving rise to a demand for better shows and innovative formats. And OTT platforms are helping to drive those gains. According to MPA, by the end of this year, in Southeast Asia outside of Singapore, and excluding sports, OTT platforms will be spending 35 percent to 40 percent of what all the pay-TV platforms in those markets spend. Some of these services are barely two years old! This APOS and MIPTV edition of TV Asia includes an in-depth look at the OTT landscape across the region.

One market that has become an intense OTT battleground is Indonesia—yet free TV still dominates there.

And the largest player in Indonesian TV, free and pay, is MNC. Its president director, David Audy, shares the unique challenges in this large market of some 260 million people—like having the region’s lowest TV rate cards— and how MNC is positioned for future growth. We also hear from Amit Goenka, CEO of the international broadcast business at Indian media powerhouse Zee Entertainment Enterprises (ZEE). Goenka shares how the popularity of the company’s serials are helping to grow ZEE’s business in the Middle East and the U.S. Hispanic market.

—Mansha Daswani

10 OTT BLOSSOMS A new crop of streaming platforms is rapidly transforming the region’s media business.

INTERVIEWS

18 ZEE’s Amit Goenka

21 MNC’s David Audy

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ABS-CBN Corporation The Better Half /A Love to Last / Wildflower The suspense thriller The Better Half tells a story of love and obsession, centered on the lives of two couples. A Love to Last, on the other hand, is a family drama about a woman who falls in love with a much older man and finds herself caught in the middle of his complicated life, dealing with an ex-wife and seeking acceptance from his kids.

Wildflower is a story of vengeance and redemption.

“Romance and family values continue to be strong [themes] among our viewers,” says Carlo Katigbak, the president and CEO of ABS-CBN Corporation. “That is why ABS-CBN continues to produce dramas with strong narratives about love and family, compelling storytelling and top-caliber production values, and that are top billed by the best actors and actresses in the country.”

“Our 2017 television programs are top-raters in the Philippines.”

—Carlo Katigbak Wildflower

Astro Gegar Vaganza / Astro GO Astro COO Henry Tan declares: “Local is the new premium.”

The broadcaster has been delivering audiences a nice batch of local programming, including the singing competition Gegar Vaganza, the reality comedy show Maharaja Lawak Mega and the entertainment awards show Anugerah MeleTOP Era. Astro has also ramped up its animation IP and has a slate of Islamic content for kids. There is also new programming that targets parents, including Lara Oh Lara.

“We’ve recently rebranded our OTT service for Astro customers, and Astro GO will include a more intuitive user interface as well as exclusive channels,” says Tan. He also highlights Astro’s wealth of Chinese content, including Classic Golden Melody, International Hua Hee Karaoke and Asian Battleground.

“We look forward to making more shows that resonate with our audiences this year.”

—Henry Tan Classic Golden Melody on Astro AEC

Bomanbridge Media Rooftop Culture / Matt Hatter Chronicles / From Above… series Seven elite urban athletes jump from rooftop to rooftop across Asia’s megacities in the factual-entertainment show Rooftop Culture. Sonia Fleck, the CEO of Bomanbridge Media, calls Rooftop Culture an “edgy and extraordinary visual experience” of Asian cities such as Tokyo, Seoul and Hong Kong. Another highlight for Bomanbridge is Matt Hatter Chronicles, a highstakes kids’ adventure comedy that “showcases a new viewing experience called Multivision—3D without the need to wear 3D glasses,” says Fleck. The From Above… titles are a series of 4K factual programs from award-winning producer Yann Arthus-Bertrand, who uses “high-end technology with skillfully crafted and expensive production budgets to capture beautiful natural landscapes with extremely complex aerial shots,” Fleck says.

“We are aggressively acquiring content, and our catalog offers a healthy mix of factual, lifestyle, formats and animation titles.”

—Sonia Fleck Matt Hatter Chronicles 412 WORLD SCREEN 4/17

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FremantleMedia International Jamie’s Quick and Easy Food / The Chef’s Line /American Gods In the new show Jamie’s Quick and Easy Food, chef Jamie Oliver teaches viewers how to prepare meals using only five ingredients per recipe. Another food-themed series, The Chef’s Line looks on as home cooks compete against professionals for the chance to win a cash prize. “FremantleMedia is serving up two incredible culinary shows: The Chef’s Line, a first-of-its-kind competitive face-off between home cooks and professionals, and Jamie’s Quick and Easy Food, which sees the globally popular chef combat the daily struggle of getting dinner on the table with simple, innovative solutions and minimal fuss,” says Ganesh Rajaram, the general manager and executive VP of sales and distribution for Asia at FremantleMedia International. The company is also offering up the highly anticipated drama series American Gods.

“FremantleMedia International has such a diverse slate, and this MIPTV we are bringing AsiaPac buyers a fresh crop of incredible programming.”

—Ganesh Rajaram American Gods

Rewind Networks HITS Over the last few months, Rewind Networks has expanded the distribution of its HITS channel in the Philippines with a launch on Cignal and recently extended its OTT reach in Malaysia via tonton’s VIP service. “HITS launched as a branded destination to strengthen basic-tier services and entry-level packs in the pay-TV ecosystem,” says Avi Himatsinghani, the CEO of Rewind Networks. “That has not changed. We remain committed to delivering superbly on our promise of ‘the best TV—all in one place’ as we continue our awesome journey into more basic pay-TV homes and subscription video services in the region.” HITS’ programming mix features iconic and classic series, from sitcoms to dramas, including ER, 3rd Rock from the Sun and The Fresh Prince of Bel-Air.

“We continue to expand our studio and distribution partnerships, curating more great shows and reaching more homes and screens.”

—Avi Himatsinghani ER on HITS

Sony Pictures Television Networks, Asia AXN Under the bouquet of Sony Pictures Television Networks, Asia, AXN has added to its lineup the high-octane reality series Team Ninja Warrior, the crime drama Criminal Minds: Beyond Borders season two and the newly launched U.S. hit MacGyver. “AXN is Asia’s top destination for pan-regional original productions,” says Virginia Lim, the senior VP and head of content, production and marketing at Sony Pictures Television Networks, Asia. “We’re building a robust pipeline of original series for both AXN and its sister channel, Sony Channel, and we welcome creative ideas and fresh concepts for new, original series that truly reflect our channel brands. They should also be locally relevant, highly engaging and thoroughly entertaining for our Asian audiences so that they keep returning to AXN and Sony Channel for more.”

“AXN continues to deliver programming that is smart, intriguing and unexpected and delivered close to U.S. telecasts.”

—Virginia Lim Team Ninja Warrior on AXN 414 WORLD SCREEN 4/17

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Turner Asia Pacific Cartoon Network / Warner TV / Oh!K Turner Asia Pacific will have a strong presence at both APOS and MIPTV, from a distribution, syndication and acquisitions standpoint. “We’ve already had a pretty impressive start to 2017,” says Vishal Dembla, the VP and general manager of Turner Southeast Asia. “Across the whole region, Turner’s kids’ channels began the year as the number one international portfolio, while Warner TV is currently the number one and two general-entertainment channel in Singapore and the Philippines, respectively. Oh!K is also showing great promise in Malaysia, Singapore, Indonesia and Hong Kong on the back of two recent blockbuster Korean drama hits: Saimdang and Goblin.” TNT recently launched in 15 million homes across Thailand, and CNN International also continues to thrive across the Asia Pacific.

“More than any other year, Turner is on the lookout for great content across a wider range of genres.”

—Vishal Dembla Goblin on Oh!K

Vietnam Media Corp.

Tam Cam: The Untold / Victory / Sai Gon I Love You BHD|Vietnam Media Corp. produces hundreds of hours a year in the TV arena, including such high-profile local shows as Vietnam Idol, MasterChef Vietnam and The Amazing Race Vietnam. The Vietnamese company also has a slate of movies to offer that includes some of the biggest box-office hits in the country. “We represent the best movies from the growing [Vietnamese cinema] industry and believe that we can provide great diversified and exotic content to international broadcasters around the world,” says Bich Hanh, the company’s VP of sales and acquisitions. Highlights for MIPTV include Tam Cam: The Untold, a local Cinderella story that was a smash hit at the box office in 2016; Victory, about two brothers from a poor background with a passion for football; and Sai Gon I Love You, a romantic dramedy. There’s also The Lost Dragon.

“Vietnam’s cinema industry has been growing very fast recently.”

—Bich Hanh The Lost Dragon

VR Educate VR Room / VR Lab / VR Content Platform Through its immersive virtual-reality educational experiences, VR Educate aims to enrich the learning of students across Asia. VR Educate provides the foundation to do so with VR Room, VR Lab and VR Content Platform for schools and other educational institutions. “VR Educate is requesting all worldwide producers and content creators to contribute to the Asian VR content platform,” says Lanny Huang, the chairman and CEO of VR Educate. There are 21 genres that the VR Content Platform covers, from history to science, literature to sports, nature to art. Users can also explore landmarks, space, world restaurants and museums all in virtual reality.

VR Educate believes that totally immersive VR experiences have the ability to encourage open imagination, self-motivation and out-of-the-box thinking among students.

“Educational content is important, and VR content is definitely the king!”

—Lanny Huang VR experiences 416 WORLD SCREEN 4/17

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Mansha Daswani explores how a new crop of streaming platforms is rapidly transforming the media business across Asia. he battle lines are being drawn fast and furious as digital upstarts compete for the disposable income and spare time of consumers. From partnerships with telcos to exclusive content deals to alignments with top-end talent, the OTT landscape has become fiercely competitive very quickly.

“The pace of change is rapid,” observes Vivek Couto, cofounder and executive director of the research firm and consultancy Media Partners Asia (MPA). “This is a business that changes every two to three quarters in terms of content consumption, market share and competitive dynamics.”

Couto notes that it took years for pay TV to reach a level of maturity in the region, both regarding infrastructure and content. In the last few years, however, “apart from India, most of the investment hasn’t gone into satellite-based television distribution or even legacy cable; it’s gone into people building broadband businesses, particularly across mobile. As those businesses grow and they look to sell more products, the role of video has become huge.”

T

CALLING IT IN Telecommunications companies are indeed betting big on video as a subscription driver. Singtel partnered with Sony Pictures Television and Warner Bros. Entertainment to roll out HOOQ. A raft of providers have inked deals with iflix (which recently received a $90 million financing injection to fund expansion), among them PLDT in the Philippines and Telekom Malaysia. Globe in the Philippines is working with Netflix. Pay-TV operators are also getting in on the OTT action.

Malaysia’s Astro, for example, has Tribe. And Hong Kong’s PCCW Media, owner of Hong Kong’s now TV IPTV platform,

has been rolling out Viu, a service that has emerged as one of the most successful competitors to global giants Netflix and Amazon, which are now almost everywhere across Asia.

“Viu was launched to capitalize on the growing demand for flexible entertainment services on the go, especially among the millennials,” says Janice Lee, the managing director of PCCW Media Group. In operation for about 18 months, Viu is now available in Hong Kong, Singapore, Malaysia, India, Indonesia and the Philippines, with a Thailand launch slated for later this year. According to Lee, Viu has more than 4 million unique users across the region.

Partnerships with mobile phone operators have been central to the Viu strategy, as they “resolve any potential problem with payment, for example, lack of credit-card usage, as well as ensure a good content delivery network,” Lee reports. Partnerships are in place with Singtel in Singapore, Telkom Indonesia and Vodafone in India, among others.

“Access is one of the biggest barriers to entry for a digital product such as HOOQ,” says Krishnan Rajagopalan, chief content and distribution officer and co-founder of the HOOQ platform. “Particularly in the emerging markets, credit-card penetration rates are relatively [low], thus hindering access.

Partnering with telcos allows a big part of the population to have access to a payment option where they already have an existing relationship.”

“You’re almost asking telecom operators to subsidize your entry into the market,” says MPA’s Couto on the role telcos are playing for online services. “Particularly in markets like Indonesia, the Philippines and Thailand, you’re getting a reach from these telco operators you could never get with pay TV.” It is indeed in those Southeast Asian markets mentioned

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Among the top shows on Hulu Japan are Nippon TV dramas such as Tokyo Tarareba Girls.

given the sheer number of competitors. HOOQ, iflix, Viu and now Tribe are all either established in those markets or are arriving soon. Netflix is widely there too. It’s in the content offering, the user experience, and price, where these services are looking to carve out a niche for themselves.

HEADED SOUTHEAST

says. “And then we’ll expand beyond those three markets.”

HOOQ has also started producing locally with OTJ: The Series, based on the Filipino movie On the Job. For now, though, the bulk of its content falls under three pillars, Rajagopalan says: Hollywood series and movies, kids’ content, and local fare licensed from key suppliers in the region. On the U.S. imports front, “we go after mass-market exclusives, things that work well with audiences who are not very comfortable with English,” he says. This includes the Warner Bros. DC titles, which are exclusive to HOOQ. At Viu, Korean dramas have been a core driver of consumption, PCCW’s Lee observes. “Research we conducted on online viewing of drama across multiple Asian markets has shown Korean content to be among the most popular content categories for Asian viewers,” Lee says, noting that a majority of respondents said they watched Korean series on a regular basis. “Speed is essential; for the popular titles, for example, Descendants of the Sun and Goblin, we see a ten-times growth of viewership at midnight [the night of the original linear broadcast in Korea], which reveals that quick content delivery is beloved by K-drama fans.”

Lee says that Viu is the “leading provider of Korean content, as we have partnerships with the top four Korean broadcasters for series that are broadcast four to eight hours after telecast with local-language subtitling in selected markets. We can use the content on multiple platforms in multiple countries.”

Tribe, the new OTT offering from Malaysia’s Astro, has also made Korean content a lead offering. The platform first

Leading the space in terms of buzz is iflix, which counts European giants Liberty Global and Sky among its investors.

Like Viu, iflix is faring particularly well among millennial audiences. “A lot of the Western shows that target that sort of audience are doing well,” says James Bridges, global head of content partnerships at iflix. “Initially we found high English-literate, tech-savvy, young male early adopters driving [usage]. Now we’ve had a couple of massive successes with Korean dramas. That’s the sweet spot we were hoping to be in—a great core of Western content that is subtitled in all the local languages we’re in, and then a couple of really strong early-window, straight-after-broadcast local TV series from say the Philippines, Indonesia and Thailand, and a regional underpinning of great Korean content. We think the split will be about 40 percent Western, 20 to 30 percent Korean and the balance local over time. So we will shift to a more Asian focus, a more Asian balance, but only very slightly. We know the Western content is very important.”

Key Hollywood imports include Mr. Robot and The Magicians, from iflix’s first-run, exclusive pact with NBCUniversal. Locally, a key growth area is Filipino content, Bridges says, mentioning the GMA hit Encantadia. “We get it the day after broadcast,” Bridges notes. “It’s been a massive hit for us. There’s no sophisticated catch-up service in the Philippines, so they can now see the show in great quality the next day on their phone. We’re trying to get into the exclusive space across all local and regional acquisitions.”

Next up for the platform is original production, Bridges says. “We have a terrific head of commissioning, Mark Francis, and he is about to announce three to four productions across Indonesia, Malaysia and the Philippines,” Bridges Netflix has a global streaming deal for several Shah Rukh Khan movies, including Dilwale.

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The GMA drama Encantadia has been one of the most popular local shows on iflix.

launched in Indonesia, a small pay-TV market with high mobile internet usage. As of mid-February, the Tribe app had about 700,000 downloads in Indonesia, delivering Korean drama, anime and live sports. In December 2016, the service partnered with Globe to expand to the Philippines.

Coming soon to the Southeast Asia region, meanwhile, is TVING, an on-demand platform run by CJ E&M in Korea. In its home market, CJ E&M delivers streaming access to 150-plus channels and reported a 177-percent increase in unique visitors from January 2016 to 2017. Bolstered by the huge Asian demand for Korean series, TVING is targeting rollout to Japan, Vietnam and Thailand, followed by Europe, Latin America and the U.S. And yet another competitor joins the fray this month: FOX+. Delivering high-end Hollywood fare, sports and more, FOX+ launches first in the Philippines, followed by Singapore and other Asian markets.

is rated as number one in terms of the content lineup.”

Movies, drama series and anime are all resonating with Hulu’s users, with a fifty-fifty split between Japanese and international when it comes to consumption. “That said, catch-up content from Nippon TV is always dominating the top ten ranking in terms of the number of unique viewers. The Walking Dead and Game of Thrones are the most important U.S. shows. We also understand that our original series are really appreciated by many subscribers, while the number of shows is still small.”

Hulu has content deals with suppliers like BBC Worldwide, A+E Networks, National Geographic and others, including an exclusive SVOD alliance with HBO. On the originals front, Hulu is making about ten shows a year, about half co-produced with Nippon TV. “In that case, Nippon TV tends to air the first episode to entice viewers to come to Hulu to watch the rest,” Nagasawa says.

The relationship with Nippon TV has been highly beneficial, Nagasawa reports. “First of all, Nippon TV provides catch-up content to us on an exclusive basis, which is extremely important to differentiate ourselves. Exposure on Nippon TV is also very important. They also help us to promote our key exclusive (or semi-exclusive) titles, such as The Walking Dead and Game of Thrones.”

Another market to watch is India, where the loudest players at present are global heavyweights Netflix and Amazon. Both have been very busy making high-profile content deals. Indeed,

RISING SUN There is, of course, plenty of activity taking place outside of Southeast Asia, where the dynamics, and the route to market, are radically different.

Like their counterparts in the U.S. or Europe, Japan’s SVOD players largely have a direct relationship with the consumer, rather than operating through a telco. One of the leading services is Hulu Japan, which has been owned by commercial terrestrial group Nippon TV since 2014. In the time since that transaction, Hulu Japan’s paying subscriber base has risen from about 600,000 to 1.5 million as of the end of January 2017.

“The SVOD market in Japan is very crowded, with over ten platforms competing with each other,” says Kazufumi Nagasawa, chief content officer at the platform. “To be honest, the biggest threat (I hesitate to use the word competitor, though) is Amazon Prime, as they provide the service including Prime Video and Music (on top of early delivery and free shipping) at the annual fee of ¥3,900. It is much less than half of our price. Based on multiple surveys conducted by third parties, we know Hulu is the second mostused SVOD service after Amazon, although Hulu

iQiyi in China has begun investing in original drama, with a slate that includes The Journey.

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they’d buy,” Rajaram explains.

“OTTs are willing to take a punt, try new genres. Today I’ve got guys in Korea on an OTT platform lapping up foreign-language drama because they want to give some differentiation to the audience. I would have never thought that in Asia I’d be successful in selling shows like Deutschland 83 and Modus.

Once you get a couple of these shows onto their platforms, they begin to gain traction.”

LOST & FOUND

The tvN drama Goblin was a huge success for pan-regional player Viu.

just a day after Amazon announced the arrival of its Prime Video service in 200-plus countries across the globe, including India, Netflix unveiled a landmark deal with the world’s most recognizable Bollywood star, Shah Rukh Khan. The multiyear global streaming deal with Khan and his Red Chillies Entertainment outfit includes releases like Dear Zindagi and Dilwale. Amazon, meanwhile, has been on an acquisitions tear, most recently inking an extensive deal with Lionsgate that includes La La Land. In India, Amazon and Netflix are facing off against local heavyweights Hotstar—owned by Star—and Voot, operated by Viacom18.

The Chinese landscape, meanwhile, is entirely dominated by local players such as Youku Tudou, Tencent and iQiyi.

“There’s been lots of regulatory action with day and date Hollywood and Korean content,” says MPA’s Couto on challenges in China. “SVOD is growing and being driven by Tencent, iQiyi and Youku Tudou. It’s an ecosystem of their own, related to e-commerce and instant messaging.”

PATH TO CHINA Stringent regulations aside, content providers are finding plenty of opportunities in China. FremantleMedia International recently renewed its alliance with Youku. The company has seen “exponential” growth in its digital business across Asia, reports Ganesh Rajaram, the company’s general manager and executive VP for sales and distribution in Asia. In China, Youku is beginning to license lifestyle content, Rajaram observes.

“Because they’re owned by Alibaba, that e-commerce factor comes into play, so they’re looking to do lifestyle and see how they can link it with their e-commerce in terms of selling product. For us, it means that the kinds of genres we’re selling into China have changed. Because of OTT, all of our entertainment shows are in China. Beyond that, there’s a new factual platform in China called Bilibili. Usually, factual is confined to linear channels, but now audiences have access to this content in the online space. That was another significant deal we did last year.”

FremantleMedia’s OTT business in Asia is certainly not confined to China. Indeed, Rajaram is finding a wealth of opportunities for many of the company’s brands.

“Before the OTTs were securing content, we had linear channels that were very set in their ways about the kinds of shows

Of course, getting content onto a platform is only half the battle—as OTT subscribers are discovering everywhere, user interfaces can be troublesome. MPA’s Couto says that in an increasingly competitive environment, perfecting the platform experience is essential. “Am I providing a content catch-up experience, a content consumption experience, or a whole platform experience?” is a question providers need to be asking themselves, Couto says.

“This is certainly a space where we’re doing some things I’m super excited about,” iflix’s Bridges says. “Obviously, if you get content and no one can find it, or they find things they like and you don’t present them with other things on the platform they would like, you’re failing your customer. We’re going to be talking about getting back to brands as a way of curating discovery. We’re not just a wall of posters. There are obvious brands that do resonate. It’s a step back towards this idea of linear channel brands. As we move further away from shows being identified with their channels, there’s a role for an OTT service like ours that can help extend those channel brands beyond the traditional pay-TV audience, which is not the audience iflix is going for. We’re going for the pay-TV-never audience that may not have been exposed to these brands. It’s part of a big overhaul of our curation. The other part of it is, as we onboard new subscribers, there will be a whole selection journey of genres and even celebrities you might want to follow. Once you select those, those genres and celebrities and their playlists will be presented to you on your landing page.

Each subscriber will have tailored collections on their landing page that are just for them.”

That personalized experience, and understanding what each subscriber wants, will be central to the growth of OTT platforms as they vie to sign on, and hold on to, new customers. And big data is crucial—but you can’t make all your decisions based on your analytics, HOOQ’s Rajagopalan says. “We’ve got indicators, but I wouldn’t bet our content strategy on them. With blockbuster movies in Indonesia, having the hottest titles can, for short periods of time, provide very strong lifts. But that means you need a movie hitting every month—that’s not sustainable!

There are content categories that are obvious hits. I know that if I put The Flash up on the homepage, people are going to watch. Friends is a top-ten title in Asia, which is why we got it exclusively for India. It’s an art. The science piece will help us test, but the art is in the selection.”

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By Mansha Daswani

Founded by Subhash Chandra more than two decades ago with a single channel in India, Zee Entertainment Enterprises (ZEE) today encompasses a wide portfolio of brands domestically, and an increasingly broad global footprint. As CEO of the international broadcast business at ZEE, Amit Goenka is driving gains around the world with a mix of services, some targeted at the global Indian diaspora and others reaching out to general audiences with both movies and series.

TV ASIA: Tell us about how your North American business has evolved over the last few years.

GOENKA: The U.S. business is one of the most important markets for us. It is growing year on year. We are the largest multicultural broadcaster in the U.S. and have an exclusive relationship with Sling TV. We launched Zee Mundo, our Spanish channel that is targeted at the U.S. Hispanic market, in October 2016 on DishLATINO and we will soon expand this channel to other markets. We have noticed that the Arabic and Hispanic cultures share a close affinity with Indian and Bollywood content. In these markets, there is very little global content coming in besides Hollywood. That is what we are trying to build and capitalize on.

Canada is another big area that we are looking at as South Asians consist of nearly 8 percent of the total population. We will focus on mainstream content targeted at English- and Spanish-speaking audiences. Pay TV is currently a small space, but the advertising space has huge potential for us in Canada.

TV ASIA: Tell us about your new Latin American business.

GOENKA: Zee Mundo gives us a bigger opportunity to exploit some of our existing shows for a completely new market. It’s not just a movie channel. Wherever we’ve entered globally, we done so with a movies offering and then quickly converted it to a more general entertainment series, telenovela kind of format.

TV ASIA: You’ve had a lot of activity in the Middle East and Africa lately.

GOENKA: The Middle East has been a good market for us. Indian content resonates very well with the Arabic people, from a cultural and family point of view. That was the first market where we started experimenting with original shows that are locally produced. We did one in 2014, Parwaaz, and another last year, Khwaabon Ke Darmiyaan, which is doing phenomenally well—it’s beaten all ratings records in the Middle East. We also recently launched an FM radio station. That positions us as one of the only broadcasters who has both television as well as radio, and soon to also be in the digital space. It’s a big market, and it’s been growing for us over the last four years. We intend to continue to invest there. In fact this year we have plans to do an original Arabic series as well, which would be another first for us—producing in the local language for the local audience.

TV ASIA: How is your European business?

GOENKA: Leaving out the U.K., which has a higher concentration [of South Asians], the rest of Europe is very fragmented. There may be 10,000 families in one country, 20,000 in another—it’s difficult to consolidate that. But for Europe, we’ve taken a mainstream strategy. We launched

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Zee.One [a free-to-air channel for Bollywood films] in Germany. As we did in the U.S. Hispanic market, we conducted research and found they were craving Indian series. We just started to launch our Indian series. I am surprised to find that the series are rating higher than the movies. Germany is a market that has always been exposed to Bollywood to some extent, but never to the series. I’m really happy that our series are being well received and we’re getting daily repeat viewership.

TV ASIA: What gains are you seeing in your program-sales business? And how are you windowing your content in those markets where you also have a channel presence?

GOENKA: Our program-licensing business gave us insight into how well our content does in certain markets. That’s what has helped us to identify markets where we should enter [with our channels]. In terms of windowing, in the markets where we are currently present, we obviously would look at a first window on our platforms before we would syndicate or license to other platforms. In markets that are regulated, like Indonesia or Thailand or China, we syndicate to the main platforms. We have platforms in Indonesia, but we are only on pay; we’re not on FTA because of regulations. So we license our content to the FTA broadcasters before we put it on our own pay platform. It depends on the market. There is no general rule of thumb; it’s market to market.

TV ASIA: How has the ad market been for your channels?

GOENKA: It’s been fairly good. For the South Asian business, our advertising business is growing at about 3 to 5 percent annually. We have seen good growth coming from the AsiaPacific business because of markets like Bangladesh, Sri Lanka and Myanmar, which have been doing very well in the last few months. That’s been driving our advertising business on the South Asian side. On the mainstream side, we have seen good growth on the Arabic platforms. The U.S. Hispanic, Latin American and German businesses are fairly new, so those will take time. But yes, we’ve seen healthy ad revenues as we launch our series in these markets.

TV ASIA: What are the major challenges facing ZEE’s international business over the next 12 to 18 months? And your greatest opportunities?

GOENKA: I will start with the opportunities. We are looking at new markets. In Europe, we are concentrating very heavily on Poland and France. These two are definitely on our horizon in the next 12 to 18 months. In the Middle East, we’re looking at Egypt, which is potentially a big market. We have already seen good traction on our existing Arabic channels there. We’re looking at a dedicated platform for Egypt in the next 12 to 18 months. If I look at Asia Pacific, we are going with a free-to-air strategy for Thailand and Vietnam in the next three months. For Zee Mundo, we’re looking at Latin America, which is a big push this year. I think we should be distributed in at least four or five of the

smaller to medium-size markets in the next 18 months [including Mexico]. And hopefully Brazil in the next 24 to 30 months. Canada is a big focus on the FTA side for the South Asian business. We’re trying to work with the government and the ratings agencies to see how we can get that going. That’s a big opportunity. Of course on the radio side, we started in the Middle East and we’re looking at the U.K. and the U.S. as well. These are some of the immediate opportunities on the horizon.

China, Japan and Indonesia are key markets where regulatory hurdles exist, and we’re trying to see how we can find other ways to enter them with our content. Those challenges will remain. If I look at the Middle East, the market has been down for the last few months and going forward, it may still be down in the coming 9 to 12 months. So it is going to be a challenge for us there, but then I have hopes for markets like Egypt and Morocco. It’s both a hurdle and an opportunity to look at territories beyond Saudi Arabia and some of the other Arabic markets we’ve been focusing on.

TV ASIA: Tell us about your digital strategy. You’re aligned with Sling TV in the U.S. What’s your general approach to direct-toconsumer OTT models internationally?

GOENKA: On the digital side, we have a presence in India and we are looking to take those platforms beyond India in the fourth quarter of this calendar year, around October. That’s when we’ll see our OTT strategy playing out in the global markets, leaving out the U.S., where we have an exclusive relationship with Sling. We have plans to look at an AVOD or freemium kind of model that provides a certain amount of content free of cost, and then some premium content that is not going on our broadcast channels in those markets.

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Boosting its presence in the Middle East, ZEE has begun producing Hindi-language series locally, such as Parwaaz.

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platform to reach the whole country. But in the future, broadband will play a key role, especially in the big cities. So this is one of the reasons why we launched Play Media. It’s one of the only pure fiber to the home services delivering high-speed internet. But that is not the key selling point.

The key selling point is that people love the catch-up TV features. Of course, these features are not new in the United States or in Europe, but in Indonesia this is new. And we are the only company that can deliver seven days of catch-up TV. The best thing is it’s in the cloud. Unlike our competitor, which can only go two days back, and only for ten channels, for us, it’s seven days, 134 channels, and it’s all in the cloud.

It’s amazing. People love this.

TV ASIA: Indonesia has the lowest TV ad rate card in the region at just $5,000 for a 30-second spot. How do you get those prices up in a market as crowded as Indonesia is?

AUDY: Negotiations. The number of clients is growing. Not only in the number of companies but SKUs as well. Everybody is launching more products. FMCG [fast-moving consumer goods] players that used to be small have become medium sized. They are all local and they advertise a lot. Going forward, we have to negotiate [higher prices]. But in our business, relationships are very important and it’s a double-edged sword.

Sometimes relationships can protect you, but we cannot just go to our clients and say, I want to double the price. They will be offended. We have to do it without disrupting the great relationships that we have. And we have to make our clients understand that we also need to grow. Our clients are growing, 10 to 20 percent every year. But they are not giving us rate card increases of 10 or 20 percent! So we have to negotiate, nicely.

TV ASIA: What are the macroeconomic trends in Indonesia at present?

By Mansha Daswani

In Indonesia’s sprawling free-TV landscape—where there are 11 freeto-air stations competing for the time and spending power of 260million plus people—Media Nusantara Citra (MNC) is by far the leading player. Southeast Asia’s largest media company, MNC operates four terrestrial networks, including RCTI, MNCTV and GlobalTV, for which it produces 15,000 hours of content a year. It also operates pay-TV services under the Indovision, OkeVision and TopTV brands, commanding a 74-percent share of that small, but growing, sector.

And since 2013, MNC Play has been giving Indonesians a quad-play package delivering telephony, broadband, cable and online catch-up TV. Overseeing those businesses is David Fernando Audy, the president director of MNC Media. He tells TV Asia about the growth prospects and challenges in one of the region’s largest countries.

TV ASIA: Tell me about MNC Play. What are the prospects for that platform given the challenge of bringing broadband access to large sections of the country?

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AUDY: We are the biggest player in Indonesia, and about 45 percent of the FMCG and consumer ads go to us. So we are pretty affected by what’s going on with the economy. 2015 was not a very good year for the industry.

There was a lot of instability. The China devaluation triggered a surge in the U.S. dollar appreciating against emerging market currencies, and then there was the commodities crash. This affected the bargaining power of Indonesians and inflation. And business sentiment: people were worried, companies started cutting budgets.

But the good news is that in 2016 things started to improve. I believe the industry grew by 4 percent, compared with minus 7 the year before. 2016 was the recovery year. Going forward, I think things look much better.

We have commodities improving, the U.S. dollar stabilizing, emerging market currencies, especially the Indonesian rupiah and the Malaysian ringgit, may be flat or appreciate. And business sentiment, the most important thing, is improving significantly.

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TV ASIA: Tell me about your recent $250 million capital expenditure on new facilities.

AUDY: Before, we had multiple studios scattered all over the city [of Jakarta]. If you’ve been to Jakarta, you know the traffic is very bad. It’ll take two hours for a 10-kilometer trip! So that created a lot of headaches for us. That is why we wanted to be stationed in one location. So we built these four buildings over 10 hectares of land. It comes with 48 studios, the latest state-of-the-art equipment. In terms of the on-screen quality, it will help us to maintain our superior position for the next few years. For example, when we did The Voice, the on-screen quality was much, much better than The Voice in any other country. The studio is amazing. And it delivered an average 21-percent audience share for season two. Season one was not done by MNC, it was done by a competitor.

They averaged a 6.7-percent share. So clearly on-screen quality has done something to the ratings. And we’re all in the same location. Internal coordination and communication is the most important thing because we are a 24-hour operation. If we can be in one location, that saves not only costs but time as well.

TV ASIA: How are you monetizing the MNC library outside of your own platforms?

AUDY: We have deals with iflix and HOOQ and various other OTT platforms. The deals are currently still small. I’m talking to iflix about doing a bigger deal with local content. We’re not targeting other countries for program distribution, but we can talk to them if they’re interested. The biggest value will be [on OTT] in Indonesia. Our strategy is that we want to maximize the value of the library. If we have this content library sitting there, it can produce revenue for us if we utilize it.

MNC produces a wealth of local content for its free-TV stations, such as the comedy Apa Aja Di Candain on GlobalTV.

TV ASIA: How do you keep your four channels from cannibalizing each other?

AUDY: RCTI only does drama; if they want to do non-drama, they need approval from the holding company. GlobalTV does movies. If they want to do drama, they have to ask our approval. Usually, they will not move out of their genres, unless there is a significant drop in ratings and they need to think of something else. Then we will sit together with the business units and think, Are movies no longer favored?

Should we do Korean movies or Indian movies? Usually, we work together with them.

TV ASIA: Eleven free-to-air channels is a lot for any one market. Why do you think there are so many?

AUDY: It’s 11 owned by four groups. The government in the past gave a lot of licenses. I hope they don’t do what they did in Thailand if they roll out to digital terrestrial. In Thailand, it went from 3 to 60 channels. That was a disaster. If they want to kill the industry, that would be the easiest way to do it. But I think the current government understands. Ten years ago people probably didn’t realize [how best to manage DTT expansion], that’s why the case of Thailand or Italy happens.

Now people have a good idea of what’s going to happen.

TV ASIA: How is your pay-TV business performing?

AUDY: Pay TV, like free to air, was tough in 2015. It was negative growth, single-digit percentage. It was still negative in 2016. It should recover in 2017. During economic crises, pay TV gets hit the most and recovers the last. Free to air is a staple, clearly related to staple consumer products, so it recovers first. But our pay TV has gone from 50,000 subscribers to 2.5 million in the last ten years. Every year we grew by double digits. So of course, just like a stock price, you cannot go up every year.

Sometimes there will be one or two years where there is a dip in the growth. But we have to look at the long-term story.

TV ASIA: How is the piracy situation in Indonesia?

AUDY: It’s really bad. Actually, there are regulations. If you pirate, you can go to jail, you can get fined. But the problem is the enforcement. This is not the priority of the government.

Indonesia is still a poor country. The government is more focused on making sure people have food in their stomach.

Going forward, as the country becomes more prosperous, the government will be more committed to combating piracy. In the meantime, we try to do our part. If we know there is piracy, we report it to the police, we make sure they are penalized.

But we can only do so much. If someone is pirating, we will make big news about it so everyone knows that if they do something wrong [they will be prosecuted].

TV ASIA: What are your goals for MNC in the next year to 18 months?

AUDY: Maintain the performance and maximize the revenue. It’s as simple as that. Everything is already in place, the investment CapEx cycle is complete, the ratings are high. We just have to convert the low rate cards into a more profitable business.

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