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TVASIA
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APRIL 2019
MIPTV & APOS EDITION
Asian Media Trends / Astro’s Henry Tan / GMA Network’s Felipe L. Gozon
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CONTENTS
Course Correction
FEATURE 8 BIG SHIFT
Explores the major trends in the AsiaPac video sector, from rising content investments to the emergence of telcos as new power players.
In Southeast Asia’s heavily mobile, low payTV penetrated markets, two platforms have been battling for dominance over the last few years: HOOQ, backed by Warner Bros., Singtel and Sony Pictures; and Catcha Group’s iflix. Ricardo Seguin Guise Publisher Anna Carugati Group Editorial Director Mansha Daswani Editor Kristin Brzoznowski Executive Editor Chelsea Regan Alison Skilton Associate Editors 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 Coordinator Andrea Moreno Business Affairs Manager
Ricardo Seguin Guise President Anna Carugati Executive VP Mansha Daswani Associate Publisher & VP of Strategic Development TV Asia ©2019 WSN INC. 1123 Broadway, #1207 New York, NY 10010 Phone: (212) 924-7620 Fax: (212) 924-6940 Website: www.tvasia.ws
Both came out of the gate with a raft of buzzy Hollywood deals as they attempted to craft services that consumers, many of whom had never even had a pay-TV subscription, would be willing to pay for. Both have shifted gears since launch, embracing more Asian content and adjusting their models to add freemium options and AVOD as they came to terms with the fact that the SVOD market in much of Asia just isn’t ready to scale. Even Netflix is said to be exploring cheaper pricing options in some Asian markets. “You have to keep experimenting, be agile and be ready to move—fast,” said ex-Turner exec Vishal Dembla, HOOQ’s new chief commercial officer for Southeast Asia, when I spoke with him for this edition’s feature on trends in the Asian media business. Dembla sees the race to capture audiences in Asia as a battle for engagement, a theme that came up in many of my conversations for this edition. As channels, operators and distributors look to maximize revenues and reach, they are calibrating content lineups, business models and routes to market. The other overarching theme that emerged from my conversations with executives from across the ecosystem is the rising prominence of local content. You’ll hear from Astro CEO Henry Tan about how IP investments have been paramount for the Malaysian entertainment provider. And Felipe L. Gozon, the chairman and CEO of GMA Network in the Philippines, discusses how the broadcast group is engaging with local audiences and increasingly bringing its content to overseas markets. The trade in Asian IP is certainly picking up steam, bolstered by international collaborations. Recent examples include the Korean-originated The Masked Singer becoming a hit in the U.S., CJ ENM acquiring a majority stake in European outfit Eccho Rights, and Japan’s Nippon TV collaborating with Red Arrow Studios International on Beat the Rooms. In the face of FAANGs spending a lot of cash in the region, we can expect to see more partnerships in the content space as everyone looks for smarter ways to engage increasingly discerning audiences. —Mansha Daswani
GET DAILY NEWS ON THE ASIAN REGION
INTERVIEWS
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Astro’s Henry Tan
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GMA Network’s Felipe L. Gozon
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all3media international The Feed / Cheat / Race Across the World The series The Feed delves into themes related to people’s addiction to technology, touching on the fear of what it is doing to our brains and what would happen if we had to live without it. “With the Asian market having such a focus and reliance on technology, this thrilling drama is sure to resonate,” says Sabrina Duguet, executive VP for the Asia Pacific at all3media international. Another strong proposition for the AsiaPac market is Cheat, which comes from Two Brothers Pictures. “Liar last year and Cheat this year consistently create intriguing, edge-of-your-seat drama,” Duguet says. From Studio Lambert, makers of Undercover Boss and Gogglebox, comes Race Across the World, which follows five teams of two racing from one place to another without flying.
“The growth of all3media international’s catalog is something we’re very proud of.” —Sabrina Duguet The Garden of Evening Mists partners & cast
Astro
Astro / NJOI / Local & Original Content The Astro pay-TV offering delivers to its customers “premium and differentiated content” in HD and on-demand, says Astro CEO Henry Tan. There’s also the “freemium” service NJOI. “I believe NJOI will continue to grow because it’s a very simple and compelling proposition,” he says. “You pay for the box and install it, and then can enjoy close to 40 different channel offerings, with options to purchase skinny bundles to access premium content.” Astro is producing around 12,000 hours of local and original content annually. “This is our strong differentiator,” Tan says. “A lot of our counterparts in the region are just platforms. We are not just a platform; we are also a content producer, and a lot of our own IPs are now our flagships.” Astro teamed up with HBO Asia for the original The Garden of Evening Mists.
“We believe that collaboration with like-minded partners is a good way to produce content for the Asian audience.” —Henry Tan Written in the Stars
GMA Worldwide To the One I Love / Written in the Stars / Sahaya The universal themes of perseverance, compassion and love for family are at the heart of GMA Worldwide’s latest offerings for the global market, including Written in the Stars. A contemporary drama with a strong musical component, Written in the Stars follows the story of “two up-andcoming singers who are not only rivals in the spotlight, but also rivals in family and love,” explains Roxanne J. Barcelona, VP of GMA Worldwide. To the One I Love is billed as a contemporary drama with elements of a romantic comedy. It is set against the backdrop of the local elections in the Philippines. There’s also the “much-anticipated” series Sahaya, which Barcelona describes as “the story of a young lady from a tribe south of the Philippines called the Badjaws and her struggles adjusting to city life.”
“These titles portray the colorful and vibrant Filipino culture while telling stories of persistence, compassion and familial love.” —Roxanne J. Barcelona 376 WORLD SCREEN 4/19
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Gusto TV Flour Power / DNA Dinners / One World Kitchen The team behind Gusto TV—home to shows such as Flour Power, DNA Dinners and One World Kitchen—will be at APOS looking for strategic partnerships for the linear channel and SVOD service. “It’s ready to launch now, anywhere in Asia,” says Chris Knight, the president and CEO of Gusto Worldwide Media. “Our channel is available in multiple languages, and our popular titles are offered with Mandarin subtitles.” The company produces around 100 hours of content annually, “which allows us to keep the Gusto TV lineup fresh,” says Knight. “Our programming is packaged with turnkey multiplatform marketing solutions to engage viewers beyond the television. Our long-form content is accompanied with short-form videos, original recipes and high-resolution talent and food photography.”
“Gusto TV appeals to Asian viewers because they appreciate diverse cuisines, high production values and entertaining hosts.” —Chris Knight Robocop on HITS Movies
Rewind Networks HITS / HITS Movies With its HITS Movies channel, Rewind Networks has “put together 40 years of the best movies on a single service to see how powerful that would become in terms of viewer stickiness and consumer love,” says CEO Avi Himatsinghani. The results, he says, have exceeded all expectations. “The ratings and numbers in our debut market, Singapore, prove it. Every month since launch, we have been in the top three out of 15 international general-entertainment channels in the basic group.” The strategy for HITS Movies, as well as for the original HITS channel, is based on curating playlists. “Their clear propositions have allowed a very loyal, consistent base of followers to keep coming in and out of the playlist, recommending and requesting shows and movies they love,” Himatsinghani explains.
“We know the proposition of a curated playlist like HITS works, so it makes sense to take it into more markets.”
—Avi Himatsinghani
TV5MONDE Asia-Pacific TV5MONDE Asie / TV5MONDE Pacifique / TV5MONDE Style HD Throughout 2018, TV5MONDE Asia-Pacific increased the distribution of its channels in the AsiaPac region by an additional 12 million subscribers on traditional pay-TV platforms. On top of the pay-TV distribution, which now reaches 102 million subscribers, TV5MONDE channels are available to 250 million mobile TV users in the region. “Unlike most players in Asia, we started our digital journey a long time ago, back in 2002,” says Alexandre Muller, managing director of TV5MONDE Asia-Pacific. “Therefore, a lot has already been done to match the evolving ecosystem’s requirements and needs. It is mandatory for us to build and maintain our relevance with the different business models available. Having a strong SVOD catalog, and regularly reinforcing it, is a way for us to close the loop and make our global offerings even more relevant.”
Top 14 Rugby on TV5MONDE
“We have always had a local approach while keeping the bigger picture in mind.” —Alexandre Muller 4/19 WORLD SCREEN 377
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Mansha Daswani explores the major trends in the AsiaPac video sector, from rising content investments to the emergence of telcos as new power players.
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hina’s leading online video operator, iQiyi, recorded a surge in memberships in 2018. It added a whopping 36.6 million users to reach a total of 87.4 million—for reference, as of the start of this year, Netflix had 139.9 million globally. And about 98 percent of those iQiyi customers—in a market where audiences are used to getting content for free—actually pay for subscriptions. It’s an impressive leap for the Baidu-owned service, but the platform also saw its loss balloon last year on the heels of significant expenditures on original content. In the über-competitive streaming-video space, growth comes at a cost, and acquiring customers is not cheap or easy. But digital players, operating across a range of business models, are indeed adding value to the overall media ecosystem in Asia, creating new opportunities for producers, distributors, channels and brands. “Over the past three years, SVOD services have helped boost the overall subscription pie across much of AsiaPac, especially in China, where pay-TV ARPUs are relatively small,” observes Vivek Couto, executive director of research firm and consultancy Media Partners Asia (MPA). “However, SVOD remains in its infancy in many markets, making recent developments an unreliable indicator for the future.” Amid digital disruptions, Jonathan Spink, CEO of HBO Asia, expects it to be a “very tough market for the traditional linear TV channels. A lot of the operators are facing pressures. You might see a couple of casualties in the SVOD world. It’s not an easy business. We’re in a fortunate position. We have a strong
brand and a strong product line. HBO U.S. is producing more and more shows. If we supplement and complement [the U.S. content] with all the things we do locally, I think we’re in a really strong position.”
ON THE GO One of Spink’s priorities this year is the rollout of the OTT service HBO GO. “The biggest thing we had to do was sort out all the studio rights so we could start launching HBO GO properly,” Spink explains. “The business had long-term studio deals and the rights in those deals didn’t foresee the OTT and SVOD world. It took us a while but we managed to get all the studios on board and that’s allowing us to focus on HBO GO.” Of note, the company, after years of exclusivity on StarHub, sealed a major deal with Singtel that includes a suite of channels plus the OTT service. Singtel recently unveiled a postpaid mobile plan that includes HBO GO. HBO GO also launched on Mediacorp’s OTT service, Toggle. Singtel is just one of many telco players across Asia that are using video to drive their mobile-broadband services. “With over 100 million smartphone users on our network, it’s strategically imperative to us that we are an active player in the online-video space,” reports Alistair Johnston, the marketing director at Indonesian telco giant Telkomsel. For its MAXstream VOD app, Telkomsel is inking deals with a range of linear channels, investing in original content and offering access to the HOOQ OTT service. “The app is a gateway and discovery tool for all of our partners with great VOD content,” Johnston says. “We also use MAXstream to create partnerships with OTT VOD services and serve their content to our customer base. So far we have 4/19 WORLD SCREEN 379
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TV5MONDE’s varied programming slate includes French feature films like Amis publics.
20 premium international linear channels, 12 local TV free-toair channels, over 150 hours of MAXstream original scripted content, live music performances weekly by Indonesian stars here at our Telkomsel studio and access to over 10,000 hours of HOOQ embedded content.” According to Johnston, the app has had more than 11 million downloads to date. “We want MAXstream to be seen as an open-source platform that content providers can easily utilize to reach Telkomsel’s 90 million-plus active mobile video users,” he notes. “We also don’t limit MAXstream to just Telkomsel. The platform is accessible in Indonesia no matter what network you are on.” At APOS, Johnston will be stressing to potential partners that in markets like Indonesia, where more people have cell phones than pay-TV services, “mobile broadband access is still the key for VOD content penetration.” Partnering with a telco also helps OTT operators overcome severe payment obstacles in markets where credit card penetration is low.
the free-to-air channels too. Early indications are that it’s been a good start. The way you have to promote linear on OTT is very different. On a traditional platform, we’d give the partner a promo and say, please run it across your networks. That approach becomes less relevant on an OTT service, where it’s all about discoverability and getting people to click and watch. There is a lot of learning for them and us. It’s early days, but I’m excited.” Himatsinghani is also enthusiastic about continued opportunities with legacy pay-TV players and telcos across Asia for his two channels. The recently launched HITS Movies is Himatsinghani’s primary focus right now, on the heels of a strong launch on StarHub. “We put together 40 years of the best movies on a single service to see how powerful that would become in terms of viewer stickiness. We actioned our plan and it has beaten my wildest expectations. The ratings and numbers in Singapore prove it. Every month since launch, we have been in the top three out of 15 international general-entertainment channels in the basic group.” In the case of the flagship HITS, Rewind expanded carriage in Taiwan, with distribution on both CNS and Chunghwa Telecom’s MOD, rolled out in Vietnam with K+ and VTVcab and launched in Myanmar and the Maldives. “There are pockets [available]—we’re still not on True or AIS in Thailand. We want to get onto platforms like myTV SUPER, Now TV and i-Cable in Hong Kong. So there’s still work to be done on the flagship channel as well.” Himatsinghani says he’s also looking further afield. “I’d love to see how we can explore additional feeds of the service in
OTT AMBITIONS Payment is just one of many hurdles facing digital players across Asia as they finesse pricing plans, business models, content lineups and partnerships. Southeast Asian operators HOOQ and iflix have both evolved from the SVOD-only proposition they launched with, joining Viu in the freemium space. HOOQ embarked on the rollout of a skinny bundle in August of last year, delivering to subscribers channels that were previously only accessible to Indonesian consumers with a pay-TV subscription. These joined an array of free-toair live-streamed channels on the operator. “If you’re solving for engagement in a 24-hour period, you have to keep experimenting, be agile and be ready to move— fast,” says Vishal Dembla, HOOQ’s new chief commercial officer for Southeast Asia. “Our objective is to be synonymous with video entertainment, regardless of whether it is linear, transactional VOD, SVOD or AVOD,” he says. “We want to work with like-minded partners, whether it’s rights-sharing, telcos or channels.” Rewind Networks is among the operators to have aligned with HOOQ on the skinny bundle, with HITS and HITS Movies included in the package in Indonesia. “What I love about HOOQ is it’s forward-thinking in its approach and has taken a bet on aggregating linear alongside SVOD to connect with a wider OTT audience,” says CEO Avi Himatsinghani. “They’ve been very successful in integrating
CJ ENM’s Tears of Heaven was remade in Turkey.
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The Haunted Heart is a new Taiwanese co-production for WarnerMedia.
markets like India, Korea and even Africa and Eastern Europe. I think it’s a good time to start exploring.” He attributes the success of both services to his “curated playlist” strategy. “Their clear propositions have allowed a very loyal, consistent base of followers to keep coming in and out of the playlist, recommending and requesting shows and movies they love. The more fans that come in, and the more time they spend, the better our ratings.” Plus, Himatsinghani adds, these classic movies and TV shows “haven’t worked on the pure SVOD plays. If they’re available they are scattered—some on one SVOD service, some on others. And they are so deep down on the pages, even if a thumbnail pops up, people will say, I’ll watch that later, [for now] I want to watch Narcos or House of Cards or Bodyguard. On-demand works best for the latest top-ofmind content. Our curation works best on a linear playlist.”
FOREIGN FARE Alexandre Muller, managing director of TV5MONDE AsiaPacific, has also seen his business grow over the last year. “During the course of 2018, our distribution in the region has increased by an additional 12 million subscribers on traditional pay-TV platforms,” Muller notes. “The Indian subcontinent alone represents 50 percent of this growth, the other half coming mostly from mature markets (South Korea and Japan), traditional pay-TV markets (Taiwan) and emerging markets (the Philippines and Indonesia).” Via pay-TV platforms, TV5MONDE reaches 102 million subscribers in the region, Muller says, plus another 250 million via mobile TV services. “Unlike most players in Asia, we did start our digital journey a long time ago, back in 2002,” Muller says of what has contributed to the company’s success. “A lot has already been done to meet the evolving ecosystem’s requirements and needs. It is mandatory for us to build and maintain our relevance with the different business models available. Having a strong SVOD catalog and regularly reinforcing it is a way for us to close the loop and make our global offering even more relevant to our partners and subscribers.” A first-time attendee at APOS this year, Canada-based Gusto Worldwide Media is eager to expand its Gusto TV
service in the region following a launch in Singapore on StarHub. Chris Knight, president and CEO of the company, recognizes the challenges of the linear channel space globally, but sees more opportunities than obstacles. “We’ve had great conversations with people who understand the subtleties and the intricacies, whether it’s in Korea or Vietnam or China,” Knight says. “We’re looking to create partnerships with people in all the different markets we want to get into.” The company is being open-minded in its expansion plans, opting for a variety of different routes to market, well beyond just a traditional carriage deal with a pay-TV platform. “We have branded blocks that we’re talking to people about,” Knight says. “There are conventional content sales, which we’re always keen to do. We would like to embed our content on telephones. We would like to have our content seen on refrigerator doors as they start rolling out 4K screens, as they have now in Korea.”
CONTENT WAVE Knight is also looking to produce within the region, given the rising importance of locally produced fare for both pay-TV and OTT players. And everyone is acutely aware of Netflix and Amazon’s regional ambitions. Netflix has been spending across the region, including in India, Korea and Japan. Amazon has focused its efforts on India and Japan, in both scripted and entertainment. “It’s increasingly clear and obvious how important locally produced programming is,” says HBO Asia’s Spink. “We made four or five series last year; we’re doing five, six, seven this year. We have great plans to increase the number we do. They get good audiences and have the beauty of never being pirated. And they’re working across the region. A Taiwanese one will work in the Philippines.” WarnerMedia’s Turner channels are also producing more in the region, recently expanding into the scripted space with titles like The Haunted Heart, a Taiwanese co-production. Indonesia’s MAXstream has set its sights on more original content after releasing the horror series Nawangsih, in partnership with Malaysia’s Astro, earlier this year. “We have a lot more planned that are already in production,” says Johnston.
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“We aim to offer digital video content for our customers, as well as empower Indonesian creatives to hone their craft by using our platform to amplify the reach of their work to the wider public.” Korean content behemoth CJ ENM picked up a majority stake in European distributor Eccho Rights at the end of last year to further its global ambitions. “We always hope our IP will travel worldwide, even beyond Asia, where our presence is now quite strong,” says Chul-Yeon Kim, senior VP of the global business at CJ ENM. “Our distribution strategy will remain quite unchanged. Howall3media international is seeing increased interest in its drama slate, which includes The Feed. ever, working with Eccho Rights, we Sabrina Duguet, the executive VP for the Asia Pacific at are anticipating wider global distribution. We worked together all3media international, observes that the “influence of SVOD in the past numerous times, most famously licensing the in the region cannot be underestimated. The AsiaPac audiremake rights for our scripted format Tears of Heaven to ence is now willing to leave their comfort zone, especially Turkey. We hope to come up with new strategies thanks to when it comes to drama, and enjoy more edgy and diverse their abundant network in Turkey and the MENA region.” content via the VOD services.” Within Asia, meanwhile, CJ ENM will build on its “express Indeed, Duguet reports a boom in the company’s scripted drama” strategy, delivering shows for broadcast within 24 distribution business in the region, building on all3media’s hours of the original telecast. “It is vital to air Korean dramas strong trade in entertainment formats in Asia. within 24 hours on Asian OTT platforms,” Kim says. “Another “Historically, lifestyle programming has been the driver for critical factor that cannot be overlooked is illegal streaming us. However, we have seen a move towards broader genres, sites—to minimize these platforms it is becoming more especially within drama. We have also seen an increase in important for us to legally distribute our content within a regional and second-window deals in specific territories, as [shorter] time period.” well as a surge of deals for our scripted formats.” Distributing to OTT platforms has been a major success story at CJ, with brisk trade with Netflix, Viu and HOOQ, Kim says. “Viu especially has been working with CJ ENM for a long time and is now There remains a significant degree of uncertainty hanging a very powerful platform in the region. over the Asian video business at present, largely because Starting last year, we embarked on a of the consolidation happening on a global level. The tighter partnership with Netflix, and big mergers—Time Warner and AT&T, Disney and they are increasing their Korean Fox—have yet to play out on the local leadership front drama acquisitions.” (at least, at the time of writing). There are many questions about how the direct-to-consumer landscape will take shape, should Disney, WarnerMedia and NBCUniversal decide to bring their upcoming platforms to Asia. Amazon and Netflix are spending a lot of money on originals in Asia, which is likely to drive up the costs for everyone. Ultimately, some basics of the business are still strong, despite the parade of disruption. “Affordable pay-TV continues to win over new customers in India and the Philippines, while the sector remains resilient in Japan and Korea, largely through telcos that have been buying cable and DTH assets and driving IPTV growth,” MPA’s Couto explains. “In all markets, however, the battlefield is now broadband, either as a complement or replacement for existing services, contested by incumbents and new entrants alike.”
NEXT STEPS
Gusto TV, which delivers cooking series like Fish the Dish, is looking to expand its Asian reach.
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ike legacy pay-TV platforms the world over, Astro knows it can’t afford to stand still in the new media ecosystem. Malaysia’s leading content and distribution company—reaching 23 million individuals in 5.5 million homes with its portfolio—has expanded beyond the traditional pay segment with NJOI, which delivers a portfolio of channels for free, and has dramatically ramped up its investments in original content. New CEO Henry Tan—who has been with the group for more than a decade—is working hard to redefine the company’s value proposition to consumers. By Mansha Daswani TV ASIA: What strategy have you put into place as the new CEO of Astro? TAN: Astro as a group is more than television: we have TV, digital, radio and we do events, movies and ground activations, etc. Within the television business, we have two offerings, the pay and free services. Pay is under the Astro brand name and free is under the NJOI brand. At a broad level, our goal is to really protect the premium pay and at the same time grow and monetize the free service. Like everywhere else in the world, there are challenges in pay. There are opportunities for us to grow and monetize the free service. Today we’re in 76 percent of Malaysian homes, with higher penetration on pay versus free. I believe NJOI will continue to grow because it’s a very simple and compelling proposition. You pay for the box and install it and then can enjoy close to 40 different channel offerings. The opportunity for us is not just to focus on growing the base, which I think will increase naturally, but to see how we can monetize that better. Currently, our NJOI average ARPU is about MYR2 ($0.5), which is very low. I see a huge opportunity for us to focus on selling skinny bundles. This group [of consumers] is enjoying the free service, so if you try and push them a heavy bundle, I don’t think they’ll go for it. But there’s definitely an opportunity for us to push skinny bundles or sachets. We’re selling events, weekend passes, three-day access. There’s an area where we can reorganize and make the offering simpler, clearer and monetize it better. That’s a natural opportunity and upside. TV ASIA: How are you addressing the challenges in your pay-TV business? TAN: Our business strength is our customer base. We are in 76 percent of Malaysian homes on television alone; you combine that with radio and we’re in more than 80 percent. The question is, how can we use these various assets within the group in a better way to help us move forward? If you look at the base as the opportunity, we have a lot of room to do better, especially in commerce. Why just sell content? There’s an opportunity to sell many other things beyond content. The other opportunity besides commerce is broadband. We are exploring and examining how we can bundle broadband together with our content. The combination of content and connectivity will be quite a strong value-added proposition for our customer base. The more commerce we do, the more broadband we do, we’re redefining the value proposition for our premium pay customers. There is a third opportunity: rewards. What I mean by rewards is, if you look back, our strength is our customer base, and in addition to our customer base, we have the ability to reach, persuade and promote. Say a car manufacturer has a brand-new model. I can say, “Those people who would want
to buy your cars are already my customers. Why don’t you give me a sweet deal for my customers? I have the base and I can reach out to them quite effectively.” Then it becomes a wonderful reward mechanism because I can tell my customers, you’ll be among the first to have this new model at a special price or with additional freebies. The customers will hopefully feel quite privileged. And for the manufacturer, I help you make a lot of sales. Rewards is a concept that we would like to explore. Right now, we are still at the beginning stage, but we think this will be quite a strong proposition for our premium pay customer base. It becomes a win-win. We can take an intermediary role and convert that into a benefit for our customers. That’s quite exciting for us. We are working on finding what the winning model for this is. There are many reward programs and we don’t want to be just another one. We want a reward program designed for our business and our customer base. It’s not about giving these rewards to as many people as possible. It’s a privilege for the top 50 percent of Malaysian homes and Malaysian consumers. The rewards tie back in with our commerce, which also links back in with our advertising proposition. Our advertising business is growing steadily, and we’ve been gaining quite a lot of share in that space. We are seen as the new force in advertising and marketing. We are spending a lot of time thinking about how we can redefine advertising. There is no denying that television is still the most powerful means to persuade. However, the way it is researched, measured and reported is really [inadequate]. Our goal is to look at how can we reinvent TV’s measurement and reporting to provide the intelligence and analytics that are demanded of this new world. If we can combine that intelligence with television’s persuasion power, I think we have a real opportunity to reinvent this whole advertising business and bring it to a new level. At the same time, we’re looking at one measurement across all platforms. Today, it’s all quite siloed. We think we have the opportunity to do one measurement that cuts across all platforms, from TV to digital to radio. We want to make TV really sexy when you combine it with the analytics. That combination, hopefully, will usher in a new era of advertising and marketing. We think we’re in a good position to do that. TV ASIA: How are you investing in the consumer experience? TAN: We are embarking on a review of our entire definition of the customer and the customer experience. We’re mapping out their whole end-to-end journey and reassessing how we can redefine the customer experience. How can we make it simpler and better? Doing this is in recognition that some of [our services] were designed at a different time with a different market 4/19 WORLD SCREEN 387
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Astro has upped its investment in original content across a range of genres, including feature films such as Polis Evo 2.
environment. We all know the world has changed. We are asking ourselves what is still relevant. That exercise is ongoing. In the new environment, service can be a competitive edge. TV ASIA: I watched a presentation you gave where you talked about “liberated” content. Can you explain that thinking, and how it plays into your strategy for Astro? TAN: In the so-called technology revolution, content has been liberated. If you think about it, content in the past was restricted and confined. It was forced to conform to certain broadcast schedule requirements; for example, everybody begging and jostling to be in prime time because prime time is when you get the most eyeballs and the most advertising and the best ROI. What’s prime time in the new world? Prime time is less critical compared to the moment of truth of when you want to watch something. So now, you should use the new opportunities to see what is best for your content. If we plan a cooking program, that’s different compared to a factual show, a newscast, a sports program or a drama series. We all don’t have to conform to a standard order of what is considered a good time slot anymore. We say, let’s find the best way to offer and deliver this kind of content. We’re no longer shackled by fixed ways of what the industry and the broadcasters term as prime time, fringe time. TV ASIA: You’ve stepped up your content-creation initiatives. Why has this been a necessary move? TAN: Thankfully we did that! In a world where there is lots of disruption, the one area that has helped us keep flying the flag high is our own content. When it’s your own content, you’re free to decide how you want to use it, treat it, make it available. Truth be told—and this may seem harsh—in a world where consumers have changed, we are sometimes stuck in an ecosystem with partners who can be very slow or resistant to change. Old habits do die hard sometimes! Sometimes the bigger you are, the more you’re trying to defend the status
quo. With our own content, we make all the decisions on how we want to treat it. We’re also seeing, particularly in our markets, a growing interest in local and Asian content. People ask me, where’s your empirical evidence? I say, take a long-haul flight and walk up and down the aisle and observe what people are watching! In the past it was Hollywood. If you take a flight with a lot more Asians on board, you see that Asians are consuming a lot more Asian content than ever before. That bodes well for us. In 2017, local movies accounted for 4 percent of the box office collections; last year it was 15 percent. That’s really exciting news. The theatrical distributors hope to see the local contribution hit 30 percent. Those are all encouraging numbers. We see the same happening with our TV drama series. There is no doubt that our homegrown local IPs are the drivers in terms of viewership. That has helped us a lot, especially with customers and ROI. The other area we’ve done really well in is kids’ animation. Didi & Friends crossed 1.2 billion views on YouTube last year, with 1.7 million subscribers. And there was the progressive Islamic kids’ animation Omar & Hana. In 2018, it was rated among the top-ten videos viewed in Indonesia on YouTube. We’re encouraged by those numbers and we hope to do more. TV ASIA: How are you collaborating with other companies in the region to scale up your content ambitions? TAN: We believe collaboration is a good way to move forward. We’re seeking like-minded partners who work towards a win-win. We’re open to anybody willing to work with us on that basis. For The Garden of Evening Mists, we worked with HBO Asia. It helps having them co-funding and doing the marketing and distribution in a certain way. We also partnered with CJ ENM for Garden—they look after the international rights and distribution. We hope to be able to do more projects with partners who share the same views and vision. Everybody wants content. We need it for our own customers and our own base anyway. Someone like Telkomsel in Indonesia is focusing more on content, so we’ve partnered with them on Nawangsih, a miniseries. They take care of the distribution and marketing on their own platform. We focus on the content side. We are hoping that will lead to more projects in the coming months. TV ASIA: What impact are OTT services having in Malaysia? TAN: OTT in Malaysia is mainly targeting the higher end. There’s no denying that OTT is a strong proposition that will continue to grow, but it’s a space that we too have a presence in. We have Astro Go and we’re looking at an NJOI version of that. So OTT is not something we’re too concerned about. We are watchful and monitoring how our customers consume content, but it’s a space we’re ready to move in. Piracy is a different kind of competition altogether. Piracy is the biggest scourge of the industry right now.
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TV ASIA: What’s driving the success of your local channels? GOZON: We have a winning team that puts our audience front and center in developing our content and programming. Our teams are vigilant in monitoring ratings results, audience profiles, audience feedback and emerging trends. This allows us to develop and produce content that is relevant, responsive and resonant to our market. We take pride in being the most trusted network in the country. We remain committed to delivering original, innovative and game-changing quality content that delights our viewers. TV ASIA: With the Philippines being such a mobile-heavy usage market, how are you serving your audiences on multiple screens? GOZON: We ensure that our owned and earned media strategies for digital platforms are, first and foremost, relevant, responsive and measurable. We apply content strategies that are relevant to each platform’s audience, with all being accessible via mobile. Our website, which continues to contribute to our digital revenue growth, had 122 million unique browsers and 1.6 billion page views in 2018. Based on January figures, 86 percent of devices used to access gmanetwork.com were mobile devices. We also have a very engaged online community and a strong presence on social media, with GMA Network’s Facebook page at 17.5 million likes, Twitter at 1 million and Instagram at 1.1 million. GMA News’s Facebook page [has] 12.8 million [followers], Twitter 5.4 million, and Instagram 964,000. Full episodes of our select archive titles, as well as mid-form and short-form content, are available for viewing on YouTube and our GMA app. Select current shows are also available for catch-up through our paid OTT platform partners. Further, we have several things in the pipeline that we think will be highly relevant and responsive to the content consumption needs of the local mobile market. TV ASIA: How has the local advertising market been? GOZON: Advertising expenditure mirrors what is happening on the economic front. Concerns about the impact of the TRAIN Act [Tax Reform for Acceleration and Inclusion, which took effect on January 1, 2018], especially on fuel and sugar-based products, affected ad spending in the first three quarters of the year. Because of the restored spending in the last quarter of 2018 [and into] 2019, incremental election spending, as well as the 6.5 percent economic growth forecast for the country, we are confident that 2019 will be a good year.
By Mansha Daswani
F
ilipino broadcasting group GMA Network recently announced a $20 million investment to complete the second phase of its digitization project, boosting its production, post-production, content management and distribution capabilities. For Chairman and CEO Felipe L. Gozon, the upgrade is part of the group’s efforts to maintain its leadership position with audiences and revolutionize viewing experiences in the Philippines, a country where the free-toair sector remains dominant. The high-growth Southeast Asian territory, however, is racing into a digital future, with rising mobile viewing numbers, an influx of OTT platforms and increasing video investments by telco operators. Gozon shares with TV Asia how he is positioning GMA Network today and stresses the growing importance of the com pany’s international business.
TV ASIA: There is much conversation globally about the viability of the 30-second spot. How are you working with your advertising clients? GOZON: Though the 30-second spot remains viable for television and online for us, we provide a lot of branded solutions for our clients. GMA is the preferred choice for branded content by our advertisers, and we are seeing more and more of these branded initiatives being renewed season after season. GMA has also won campaign pitches that require the use of relevant platforms (more than just having multiple platforms) beyond the 30-second spot, specifically through targeted executions on digital, radio, on-the-ground, out-of-home, etc. These campaigns, whether strategic or tactical, have consistently been results-driven, which may be the reason why more of these campaigns are rolled out with GMA.
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GOZON: Our recent deal with PLDT is a technology, content and distribution agreement. We see this partnership as true convergence leveraged on the strengths of both GMA and PLDT. More information about this deal will be disclosed as we progress. We are optimistic that after our digitization project is fully implemented by the middle part of this year, with the added values from our patented digital devices (e.g., recording, messaging, interactive capabilities, etc.), we will be able to generate substantial, additional revenues from it.
GMA Worldwide is bringing the popular drama The Heart Knows to MIPTV.
TV ASIA: The Filipino telcos have become quite active in the video business, and major OTT platforms are present in the country. How are these services impacting the overall Filipino media economy, and specifically GMA’s positioning? GOZON: Today, television remains the preferred source of delivered video content in the Philippines. Free-to-air TV viewing levels in national urban Philippines have in fact increased in 2018 compared to 2017, with GMA’s viewership also increasing. GMA’s superior audience appeal on television also manifests online. In the same way that we study our television audience behavior, we also apply this discipline to online viewing behavior, and our online video content and distribution strategies are grounded in data analytics and viewer insights. With this approach, we are able to generate both revenues and profits from ad-based and subscription-based OTT platforms. For ad-based OTT, our YouTube channels’ watch time in 2018 hit 28.5 billion minutes, making GMA one of online video’s top 50 channels worldwide. On the paid OTT side, we license our titles to OTT platforms. iflix shared that one of our top-rated series, Encantadia, has reached over 2 billion views on its OTT platform. Our social media accounts offer bite-size videos that are viewed by millions daily. Based on Nielsen’s viewership data, what is being affected by these OTT platforms and has seen a steady decline is cable viewership. A few years ago, we saw the emergence of subscriptionbased OTT platforms locally, often bundled with other services such as broadband connectivity or as value-added services to mobile subscriptions. Last year, we saw some of these OTT players integrate ad-based plays into their services. This may be because the Philippines is still largely a free content market where a pure pay-TV play has struggled to show a profit. TV ASIA: Tell us about your recent deal with the local telco operator PLDT.
TV ASIA: How is your international business? Why do you think audiences as far away as Africa and Latin America are responding to GMA’s storytelling? GOZON: Our consolidated international distribution business, comprised of pay-TV subscription, syndication and online publishing, contributes substantially to both our top line and bottom line. We distribute both linear and nonlinear content across 60 countries, including in North America, MENA, Europe and AsiaPac, on multiple platforms (cable, DTH, IPTV, OTT and mobile). It is truly gratifying to find that the stories we tell resonate in so many other countries. Perhaps it’s because the plots of GMA’s dramas are anchored in universal themes like love, family, courage amidst adversity and so on. These themes reflect our shared human experiences, wherever we may be in the world. TV ASIA: What are your other major revenue drivers, outside of the free-to-air advertising business? GOZON: Our geographical expansion through our international distribution business continues to contribute significantly to our core revenues. Radio, OTT licensing and advertising, and online publishing revenues are all growing. We also see growth contributions coming from our movie, music and event productions. TV ASIA: There have been reports in the past about possible new investors in GMA. Is the company seeking outside investment at present or other strategic alliances? GOZON: We do seek and are always open to value-unlocking strategic alliances. At present, we do not need outside investors for funding. While the three major shareholder groups of GMA Network are not peddling their shares, they are open to considering offers for their shares at the price acceptable to them. TV ASIA: What are your key strategic priorities for the company in the 12 to 18 months ahead? GOZON: Our key strategic priorities are maintaining our position as the country’s leading broadcast network through responsive programming and superior content creation, geographical growth through strategic worldwide and multiplatform content distribution, and the generation of new revenue streams via digital solutions, among others.
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