TV Asia Pacific MIPCOM 2013

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Pay-TV Channels FIC’s Zubin Gandevia Astro’s Rohana Rozhan www.tvasia.ws

asia pacific THE MAGAZINE OF ASIA-PACIFIC MEDIA

OCTOBER 2013

MIPCOM & CASBAA EDITION

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CONTENTS FEATURE

In with the New

14 Reflecting Change Asia’s top pay-TV brands are coming to grips with new technologies, investing more in content and working hard to lure advertisers.

Digitization was one of the buzzwords in Asia last year, as channels finally began to reap the benefits of platforms’ analogue switch-offs.

Ricardo Seguin Guise Publisher Mansha Daswani Editor Kristin Brzoznowski Managing Editor Joanna Padovano Associate Editor Simon Weaver Online Director Victor L. Cuevas Production & Design Director Phyllis Q. Busell Art Director Meredith Miller Production Associate Cesar Suero Sales & Marketing Director Vanessa Brand Sales & Marketing Manager Terry Acunzo Business Affairs Manager

Ricardo Seguin Guise President Anna Carugati Executive VP & Group Editorial Director Mansha Daswani Associate Publisher & VP of Strategic Development TV Asia Pacific © 2013 WSN INC. 1123 Broadway, #1207 New York, NY 10010 Phone: (212) 924-7620 Fax: (212) 924-6940 Website: www.tvasia.ws

More capacity for operators meant more carriage deals for pay-TV channels. TV Everywhere, HD and more accessible subscription tiers translated into rising pay-TV take-up rates— indeed, the pan-Asian penetration level finally topped the 50-percent mark in 2012.With viewership up, advertisers were increasingly willing to send some of their dollars pay-TV’s way.

All of those things are still happening, but, as the CASBAA Convention’s theme of “Change Is On the Air” indicates, the entire industry is, to a degree, in a state of flux as it comes to grips with evolving consumer demands, new media regulations and the rising threat of Internet-enabled piracy.

As my annual survey of Asia’s leading pay-TV brands shows, there’s been plenty of restructuring since the business last convened in Hong Kong 12 months ago. Some of the industry’s old guard have left their posts—Turner’s Steve Marcopoto exits this December; Discovery’s Tom Keaveny relocated from Singapore to take up a role at the company’s European base; FOX International Channels’Ward Platt moved to Los Angeles to become COO of global operations; Ricky Ow stepped down from running Sony’s channels in August.There are new faces in the mix, including Jonas Engwall at the recently announced RTL CBS Entertainment Network and Derek Chang, who joined Scripps Networks International in Singapore this year.

There are, however, some things that have stayed the same, most notably the ever-present threat of piracy. As high-speed Internet penetration rates have risen, it has become far easier for people to illegally access content. “There are these Internetenabled boxes that are downloading entire channels,” Christopher Slaughter, CASBAA’s new CEO, told me recently as we discussed the issues that will be on the agenda at this year’s convention.“How do you fight that? It’s not by taking a steamroller to a pile of [bootlegged] DVDs!” For Malaysia’s Astro, the key to convincing people to pay for content lies in offering the best product possible, on multiple platforms, that resonates with the country’s diverse ethnic communities. CEO Rohana Rozhan shared Astro’s evolution into a TV Everywhere-enabled content producer and distributor in an extensive interview that appears later in this issue. We also have an in-depth Q&A with FOX International Channels’ recently promoted Asia-Pacific president, Zubin Gandevia, who talked to me about FOX Sports’s rollout, relationships with affiliate partners and investments in content. —Mansha Daswani

14 INTERVIEWS 22 FIC’s Zubin Gandevia

24 Astro’s Rohana Rozhan

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ABC Commercial • Virgins Wanted • 72 Dangerous Animals Australia • Kaitangata Twitch The 6x30-minute Virgins Wanted follows one man and one woman as they seek to auction off their first sexual experiences.

“This series has already received worldwide media attention and created controversy and discussion as a result,” says Natalie Lawley, the manager of content sales at ABC Commercial. “I’m sure this will translate into sales in many territories.” The company is also presenting the natural-history series 72 Dangerous Animals Australia.

The 12x45-minute show gets up close with some of the deadliest animals located on the continent.The 98-minute children’s program Kaitangata Twitch combines live action and CGI with drama, myth and magic. “There is a gap in the market for family programming,” says Lawley. “Add to this the superb production values and special effects” and you’ve got a winner with Kaitangata Twitch.

“This market will reveal the results of our investment in a new acquisition strategy and highlight ABC Commercial as a key international player to buyers and producers.”

—Natalie Lawley Kaitangata Twitch

ABS-CBN International Distribution • If Only • Her Mother’s Daughter • Against All Odds

In ABS-CBN International Distribution’s If Only, sins of past generations haunt the romantic triangle between two siblings and the girl they love.The company is also presenting the family drama Her Mother’s Daughter, which tackles how surrogacy’s outcome entangles two young women in a fierce struggle for fortune, status and affection. Against All Odds speaks to female empowerment and traces a simple woman’s transformation in her bid to reclaim her son from the man she once loved and take revenge on his family who wronged her. Evelyn Raymundo, the company’s VP of integrated program acquisitions and international distribution, says that family dramas and romance are always in demand, “but they need to contain unique elements to the story, whether it’s the milieu, non-traditional characters and portrayals or underlying themes.”

“Family dramas and romance have been consistent bestsellers.”

—Evelyn Raymundo If Only

Asia TV Forum & Market • December 3-6, Marina Bay Sands, Singapore Last year’s Asia TV Forum & Market (ATF) drew almost 4,000 international buyers and sellers from more than 52 countries. It was the second time that the ATF was co-located with ScreenSingapore, a tradition that will be carried on to the 2013 event.

Highlights for this year’s ATF includes the MIPAcademy conference sessions, organized in partnership between Reed MIDEM and Reed Exhibitions. “It was birthed to support the Asian entertainment content industry in a more significant way and drive meaningful learning experiences, provide practical solutions and insights for the Asia region,” says Hui Leng Yeow, the senior projects director at ATF organizer Reed Exhibitions.There is also ATF Animation Lab, which is dedicated to Asian animation producers looking for co-production and co-funding opportunities.

“We are happy to feature a myriad of the industry’s best speakers and brands from the East and West.”

—Hui Leng Yeow Marina Bay Sands 486 World Screen 10/13

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FINAS • Feature Films • Documentaries • Animation This MIPCOM will host the largest Malaysian delegation ever assembled for the market, with more than 50 companies from all content platforms attending.The content spans feature films, documentaries, animation and more, with an added focus on technology and new media.The Malaysian delegation is co-organized by the National Film Development Corporation Malaysia (FINAS), the Multimedia Development Corporation (MDeC) and the Malaysian Communications & Multimedia Commission (MCMC), among other organizations. The new Malaysian minister of communications and multimedia, the Honorable Dato’ Sri Ahmad Shabery Cheek, will also be at MIPCOM to support Malaysia’s talent and to promote the country’s world-class technology and content.

Malaysia’s new minister of communications and multimedia, the Honorable Dato’ Sri Ahmad Shabery Cheek, will be heading the Malaysian delegation at MIPCOM.

FremantleMedia International • Save with Jamie • Full Circle • Wentworth There’s a new offering from the Jamie Oliver franchise being showcased by FremantleMedia International in the Asia Pacific, Save with Jamie. “Needless to say, Jamie is a hit all over the world and that includes a very strong fan base in the Asia Pacific,” says Paul Ridley, the senior executive VP of international distribution for the Asia Pacific at FremantleMedia International.The company is also presenting a high-concept drama from the awardwinning screenwriter, director and playwright Neil LaBute, Full Circle. “It stars some fantastic talent—many of the actors are household names in the region, so it’s definitely one to keep an eye out for,” says Ridley. “We also have some new series of existing Australian dramas such as season two of the ratings smash Wentworth and season three of Winners & Losers.”

“Our clients know that our content crosses borders and cultural and language barriers and is considered best in class.”

—Paul Ridley Wentworth

Media Development Authority of Singapore • Serangoon Road • Rob the Robot • Chasing Happiness

The Media Development Authority of Singapore (MDA) is leading a delegation of 23 companies to MIPCOM under the Singapore pavilion.There will be 80-plus titles and more than 400 hours available.This includes Serangoon Road, a detective drama from Infinite Studios, HBO Asia and ABC TV. “The series, shot on location in Singapore, features a stellar cast, including Joan Chen, Russell Wong and Singapore’s very own Chin Han,” says Yeo Chun Cheng, the assistant CEO of industry at the MDA. He adds, “The animated series Rob the Robot, co-produced by One Animation, transports children to the Robot Galaxy, where they explore amazing worlds, solving puzzles and problems with Rob and his friends.” Yeo also highlights the factual-entertainment series Chasing Happiness, produced by Very! for Channel NewsAsia.

“Our aim is to market quality Singapore content with strong story lines that can resonate with a global audience.”

—Yeo Chun Cheng Serangoon Road 488 World Screen 10/13

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SBS International • Luke Nguyen’s France • Make Me a Cowgirl • The President vs The Pirates There’s a new series from the popular Luke Nguyen franchise that SBS International is offering up, Luke Nguyen’s France. “In his unique style, whilst traveling the country, Luke finds interesting ingredients, meets colorful characters and discovers how Vietnamese recipes have been influenced by French tastes and ingenuity,” says Lara von Ahlefeldt, the company’s head of program sales. There’s also a new factual-entertainment series, Make Me a Cowgirl, which challenges five city girls to live in the Australian Outback, as well as a one-hour documentary, The President vs The Pirates. Of the doc, von Ahlefeldt says: “The President vs The Pirates, like all our documentaries, brings authenticity, edge and a thought-provoking story that is currently being documented to global audiences from Hollywood as well as [from] SBS.”

“Our programming inspires global audiences to explore, appreciate and celebrate our diverse world.”

—Lara von Ahlefeldt Make Me a Cowgirl

Scripps Networks International • Asian Food Channel • Food Network Asia • Travel Channel With a portfolio of three lifestyle networks in Asia, Scripps Networks International “is looking to continue growth in new territories such as Taiwan,Vietnam and greater Asia while nurturing and expanding our penetration in current markets such as Indonesia, Thailand, Hong Kong and the Philippines,” says Derek Chang, Scripps’ managing director for the Asia Pacific.

“The next stage of growth for Scripps in Asia is to create synergy between all three channels by leveraging all of our available resources to increase distribution and brand awareness.”

Developing more local programming is part of the company’s plans as well. The Asian Food Channel, for example, has several new original productions slated for this year, including Back to the Streets 2 and A Party Affair.

“As the region’s leading lifestyle content provider, Scripps Networks International has a distinct competitive edge in terms of attractiveness and relevance to advertisers.”

—Derek Chang Back to the Streets 2

Telemundo Internacional • The Return • Forbidden Love • My Dear Handyman

The telenovela business in Asia has always been cyclical and is currently at a high point, according to Xavier Aristimuño, the senior VP of sales and business development at Telemundo Internacional. “There are moments of great interest and others of less demand. Nowadays telenovelas have gained precedence, and very often we find that our proposals are more [accepted] than the traditional stories that some regions are used to seeing.There is a new telenovela genre that Asia deserves to enjoy and understand; our task is to continue working with our clients on these new platforms, new time slots and major releases.” Highlights from the Telemundo catalogue for the region include The Return, Forbidden Love, My Dear Handyman and Broken Angel.

“Good stories and high-level productions have no borders.”

—Xavier Aristimuño Forbidden Love 490 World Screen 10/13

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Hong Kong skyline.

REFLECTING Asia’s biggest pay-TV brands are coming to grips with new technologies, investing more in content and doing all they can to attract ad dollars.

By Mansha Daswani As Asia’s multichannel business convenes in Hong Kong for the annual CASBAA Convention this October, the event’s theme this year could not be more apt. The conference is tagged “Change Is On the Air,” but the shifts in the industry are being felt well beyond what’s on screen. There are new players in the market—a joint venture of RTL Group and CBS Studios International being the most high-profile new entrant to the panregional business—new owners of existing channels (notably Scripps Networks’ takeover of Asian Food Channel) and a host of new services from well-established players. On top of that, 2013 thus far has seen an unprecedented level of shakeups at the top management levels of the pan-regional groups.

“It’s a dynamic time,” observes Christopher Slaughter, who has been in the CEO role at CASBAA since the start of this year.

“Whether we’re talking about technology or devices and delivery methods [or] the landscape of senior executives.The way people are strategizing about content [is changing]. New channels are coming into the market.The convention theme is intended to acknowledge that this is a time of change, of disruption.”

Disruption aside, Asia’s pay-TV business will be convening on an upbeat note this October, given the bullish forecasts for growth

yet to come. Media Partners Asia estimates that there were 444 million pay-TV subscribers in the Asia Pacific in 2012. By 2020 there will be 696 million, reflecting a 68-percent penetration rate.

Setting up a structure to tap into Asia’s emerging opportunities was the announced rationale for Turner International Asia Pacific’s realignment this summer—a move that resulted in a 30-percent reduction in staff positions across the region.

“While there were many difficult decisions, the restructure was absolutely necessary to support the next phase of Turner’s business in Asia,” says Sunny Saha, the company’s senior VP and managing director for Southeast Asia Pacific and general manager for kids’ networks in the region.The next stage of evolution for the company, which has been operating in Asia since the ’90s, will be “driven by an aggressive, long-term growth plan to double our annual revenues by 2020 and build our core business while adding new business initiatives around them,” Saha says.

For example, in Thailand,Turner is expanding into free TV with Boomerang, which is set to reach 11 million homes in partnership with local outfit Major Kantana Broadcasting. Saha says that the deal marks the start of the “Turner 3.0 era, and is indicative of our philosophy of gaining deeper penetration in local markets.”

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Smoke break: Sundance Channel has been offering its U.S. original series, such as Rectify, on its Asian feed, which recently secured carriage on Indonesia’s largest pay-TV platform.

There have also been changes at BBC Worldwide (including a global restructure of the company), which made the decision at the end of 2012 to shutter its CBeebies and BBC Entertainment brands in India, citing the “challenging” economics of running pay-TV channels there. CBeebies is still present in the market, though, in the form of a branded block on ZeeQ, and BBC Worldwide continues to roll out its suite of channels across the region.

RESTRUCTURING MODE

A+E Networks, meanwhile, exited its joint venture with Malaysia’s Astro, taking 100-percent ownership of its channels in Southeast Asia.“I can’t overstate the importance” of the deal, says Sean Cohan, the executive VP of international at A+E Networks. “It’s our first major owned and operated channel [business] outside of the U.S. [The acquisition] reflects A+E’s belief in the region and in the business that we built with Astro.”

“We’ve launched two channel brands in the market since [the takeover], which speaks to our ambitions,” adds Alan Hodges, the managing director for the Asia Pacific at A+E, referring to the female-skewing Lifetime and the factual channel H2.

Another new service on Asia’s pay-TV operators this year is FOX Sports, run by FOX International Channels (FIC), following the completion of the company’s acquisition of ESPN’s interest in the former ESPN STAR Sports venture. Also in acquisition mode was Scripps Networks International, which added to its regional business—encompassing Food Network and Travel Channel International—with the takeover of Singapore-based Asian Food Channel (AFC).

“The next stage of growth for Scripps in Asia is to create synergy between all three channels by leveraging all of our resources to increase distribution and brand awareness,” says Derek Chang, Scripps’ managing director for the Asia Pacific.

“As Food Network Asia and Travel Channel are not fully distributed in Asia as compared to AFC, we are looking to bundle channels and replicate AFC’s distribution to increase [their] footprint.”

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Having a portfolio of diverse offerings is certainly key to the strategies of a number of Asia’s pan-regional players. Discovery Networks Asia-Pacific (DNAP), for example, has been expanding the reach of Discovery Kids, adding to its bouquet of documentary and lifestyle offerings. The channel is now in more than 40 million homes across seven markets.

KIDDING AROUND

“The kids’ market is a high-potential sector, with over 50 percent of the world’s under-14s located in the Asia Pacific and India having the largest kids’ population in the world, at over 420 million,” says Kevin Dickie, the senior VP of the content group at DNAP. “In the TV landscape, there is a gap in the market for edutainment programming targeting older school-going kids between the ages of 6 and 12.” Discovery Kids, Dickie says, fills that need.

Turner, too, sees further potential in the kids’ market, having added Cartoonito and Toonami to the existing slate of Cartoon Network and Boomerang.“In the few months since we launched Cartoonito and Toonami, take-up of both brands has been really promising,” Saha says. “We knew that kids wanted more content choice and dedicated channels for the genres of shows they liked—and so it has [been] proven. Subscriptions continue to increase across Southeast Asia, and every few months we’ve been signing new carriage agreements as the momentum grows.”

Sony Pictures Television Networks, Asia, home to AXN and Sony Entertainment Television, has also been expanding its portfolio, picking up a stake in Televiva, Dori Media’s telenovela channel in Indonesia.“We are constantly working to increase our content offerings, especially in a market like Indonesia where there is enormous potential for pay-TV penetration and viewership growth,” says Hui Keng Ang, the senior VP of business operations.

“Televiva offers a genre that has broad appeal and complements [our] bouquet of entertainment networks. It is a popular choice among women ages 15 and over.”

Arguably the leading channel operator for female audiences is Universal Networks International (UNI), whose bouquet of net-

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Big boss: FremantleMedia Asia produces the panregional version of The Apprentice for AXN.

works includes E!,The Style Network and DIVA Universal.“We are the only network to comprehensively reach a wide spectrum of women,” says Christine Fellowes, UNI’s managing director for the Asia Pacific. “Women are a huge commercial opportunity, as they make or influence 80 percent of purchasing decisions (including cable subscriptions), and one in three [female pay-TV subscribers] in Southeast Asia say they are the chief income earners in the household. Our research also shows that as many as 84 percent of women counted on pay TV as their number-one source of television viewing.”

Fellowes notes that UNI’s strength among female audiences has helped endear its channels to advertisers. “Most recently, P&G signed on as a presenter of the High Heeled Warrior Awards, a platform created to recognize Asian women and their contribution to society and their industries,” Fellowes notes.

time, all of our thinking is really informed by making sure that we’re aligning sales efforts and our resources to deliver to local clients.”

Conceding that the migration of ad dollars from free to pay has been slower than most people in the industry would have liked, Gandevia observes that things are moving in the right direction. “There are markets where media buyers have come to us and said, We have an agenda to move money from free into pay, but it’s a question of, how much can we move, at what point, and what needs to happen on pay TV to make that happen? Sometimes it’s the availability of research that’s needed, sometimes it’s the availability of critical distribution. The good news is, when you look at it every six months, there is a development that is positive, and it’s never [going] backwards.”

AMC Networks, which has only been in Asia for the last couple of years with Sundance Channel and WE tv, has not yet shifted to the dual revenue stream of advertising and affiliate fees.“The distribution footprint for both these channels has grown large enough that we have that critical mass where we can begin to really examine [ad sales],” says Bruce Tuchman, the president of AMC/Sundance Channel Global. “But there’s no rush.We want to focus on satisfying and identifying all pockets of

FOLLOWING THE MONEY

Channels report seeing gains in both pan-regional and local ad sales, but the executives surveyed here all agree that local will be the driving force in the years to come. “Local ad sales is becoming a bigger priority for us,” says Zubin Gandevia, the president of the Asia Pacific and Middle East at FIC. “While the panregional pie is growing, it’s not growing as fast as local, and we have a healthy chunk of [the pan-regional] pie anyway. Taiwan had a slightly challenging year last year, which was in line with the market, but it’s starting to see improvement. Japan had a decent year—we outstripped the market. In other markets, like the Philippines, Singapore,Vietnam, etc., we had healthy growth.

There’s a lot more to be done on that front.We’ve been investing really aggressively in local feeds, people on the ground, ad-sales teams. Even though we’re growing fast, the payoff is still to come in a big way, but we’re very confident that it will happen.”

At A+E Networks, Hodges notes that with the company now operating a broad portfolio that targets multiple demos, the response from the ad community “has been very positive.” He says, “The regional ad pie is not growing anywhere near the rate that the local pie is.That informed how we set up [our] ad sales.

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Chef’s table: Scripps now owns Asian Food Channel, whose slate of original productions includes One Night in Langkawi.

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demand and really getting the distribution down. It continues to be a very thrilling and exhausting task. There are a lot of deals in the pipeline that I want to make sure get done.”

The last 12 months have seen a number of gains for AMC/ Sundance,Tuchman says, most notably with Sundance rolling out on Indovision in Indonesia and WE tv clinching carriage with Astro in Malaysia. Key to the group’s success, he says, have been its distinctive program offerings, including shows like Rectify.

CONTENT CURATION

Women in charge: Kimora: House of Fab airs on The Style Network across Asia.

Investing in content has also been a primary focus for BBC Worldwide, “fortifying our promise of delivering more global events, as well as increasing the number of global launches of key programs and series,” says Mark Whitehead, senior VP and general manager for Southeast Asia and channels lead for the region.Whitehead cites last year’s London Calling programming stunt on BBC Knowledge as among the group’s ratings successes, as well as the Glastonbury event. “We are also airing key programs closer to the U.K. air dates. The Graham Norton Show and the latest series of Top Gear go on air in Asia less than two weeks after the U.K. telecasts.”

At present, Lifetime is reliant on its brands from the U.S., but plans are underway to develop Asian series for the channel.“We’re looking for big characters we can develop shows around,” Hodges says.

UNI has placed an emphasis on top-notch international content as well as on refreshing the on-air looks for many of its brands, moves that have resulted in significant ratings gains, according to Fellowes.

Bolstering local content is one of Fellowes’s priorities for further boosting ratings and strengthening ties with advertisers. E! has been rolling out specials on celebrities from Singapore, Malaysia and the Philippines, as well as E! News Asia. DIVA Universal, meanwhile, is gearing up for the launch of the Asian competition series Supermodelme.

AFC has been producing lifestyle content for a number of years, with upcoming highlights that include Back to the Streets 2 and A Party Affair.

“We expect to build on these local programming initiatives across all of our networks,” says Scripps’ Chang.

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Local production has also been a mandate for SPT’s AXN network, which this year aired The Apprentice Asia.“We believe original content will continue to draw advertising dollars,” says Ang. As the region’s largest pay-TV group, FIC is, not surprisingly, also the biggest content commissioner, with local productions rolling out on STAR World, National Geographic and STAR Chinese Movies, among other brands. “[We’ve done] 100-plus hours on factual alone,” says Gandevia, listing the pan-regional series I Wouldn’t Go In There, the Taiwanese show Frogmen and India’s Emergency Room, all for National Geographic Channel feeds, as examples. “We are investing in hubs for [FOX Sports] in Japan, Hong Kong, the Philippines, Taiwan and Singapore. On the entertainment side, in Taiwan we make 2,000-plus hours.

We’re going to introduce a few high-end drama shows in Taiwan. And we’re investing in Chinese movies. That’s all done with our unique abilities to manage costs and deliver more value to consumers and platforms.”

Gandevia notes that FIC is “obsessed” with helping its affiliate partners drive subscriptions and ARPU, a sentiment expressed by a number of the region’s top channel executives.That drive to help expand the pay-TV universe has included making sure that platforms can offer subscribers content on the platform of their choosing.

TV EVERYWHERE

“We’ve been trying to be very aggressive in embracing the functionality that the pay platforms are looking at,” says AMC’s Tuchman. “I think we’ve been at the forefront of making sure we have a nice package of those rights.That’s clearly where so much of the business is going and, being a new brand on the block, it gives us the opportunity to look back and say, what do consumers really want and what will they want a few years from now?”

“We work very closely with our channel partners to make the TV experience even richer for our consumers,” says BBC Worldwide’s Whitehead.“In July of this year, we launched BBC Knowledge, BBC Lifestyle, BBC Entertainment, CBeebies and BBC World News on StarHub’s TV Everywhere service in Singapore. This is an addition to the catch-up service for BBC Knowledge and BBC Lifestyle with StarHub we launched three years ago. In Malaysia, we worked with TM Net to launch their TV Everywhere service in May [which offers] BBC Knowledge, BBC Lifestyle, BBC Entertainment and CBeebies.

These are just some of the recent developments.”

While Singapore, Malaysia and Korea, among others, are well developed on the TV Everywhere front, the consensus is that there is still much work to be done on a regional level. “[Indonesia] is a classic example of the challenge for us in the industry,” says A+E’s Hodges. “The traditional linear [pay-TV] business is somewhere under 5-percent penetration. And yet the mobile penetration here is well, well north of that. As an ecosystem, we’ve got to be able to cater to [the majority] of the population that isn’t consuming our content in a linear fashion in a subscription television universe.That’s a big challenge for us and for the operators here.”

All the changes underway across the industry are expected to create “a certain amount of chaos,” CASBAA’s Slaughter says.

“We’re confident that out of chaos comes a higher form of order, but at the same time it can be confusing and challenging.” This year’s CASBAA Convention, Slaughter adds, will reflect an “acknowledgment of the dynamism of the time.”

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By Mansha Daswani

With its takeover of the former ESPN STAR Sports joint venture now complete, FOX International Channels (FIC) operates a portfolio of channels in Asia that touches on every major programming genre. At the helm of the region’s most dominant pay-TV channels group is Zubin Gandevia, recently elevated to the position of president of FIC in the Asia Pacific and the Middle East.

He talks to TV Asia Pacific about FOX Sports, developing strong relationships with affiliate platforms and TV Everywhere.

TV ASIA PACIFIC: What are your major strategic priorities

for FOX International Channels in Asia heading into 2014?

GANDEVIA: The top priority for us from a product point of

view is sports. [The second is] ensuring that we continue to deliver massive value to our consumers and our partners, both affiliates and advertisers, on what we already do well, which is entertainment, factual and lifestyle.The third thing is local ad sales.

Fourth is continuing to build this great organization and team

FOX International Channels’

Zubin Gandevia that we have which we’re very proud of.We’re unique in that we have both global and in-market scale.We have 14 markets where we have offices with people on the ground and we’re very proud that we have been able to maintain the same great FIC spirit and culture in every office.

TV ASIA PACIFIC: What are your plans for the new addition to the portfolio, FOX Sports?

GANDEVIA: We’ve always said our mission is all about entertaining people and through entertaining them creating super-strong emotional connections, thus creating fans for our brands. Possibly no other genre of television creates emotional connections quite like sports, which truly is about passion, loyalty and emotion.

From a business point of view, it allows you to be in a category that is an absolute must-have in consumers’ homes and a must-see on the screen.That allows us to be a stronger partner to our affiliates and advertisers, to give them more value and ultimately to have a much better portfolio of products for our consumers.

Our number one priority is to invest more on screen—the content, the packaging, etc. The localization of sports is also important.We’re going to have local-language commentary in all the [markets] within this year. We’ll use our global scale to get better content. FOX Sports launched in the U.S., and that’s going to give a massive lift to our brand all around the world.

TV ASIA PACIFIC: How do you cope with the escalating costs

associated with acquiring the rights to flagship sporting events?

GANDEVIA: That’s a very good question, one that I’m seeking to

answer myself! [Laughs] First, FIC is really good at delivering exceptional value to its customers, especially platforms.We have found an ability to deliver a very high-quality experience at a lower price and always push to deliver more for the same price.That stands us in good stead because it allows us to have a competitive edge versus others. Secondly, we have the advantage of regional scale within the Asia footprint, which most other players bidding for the same content don’t have. Cross-promotional ability and indepth, in-market boots on the ground allow us to monetize the product better.That means we can bid competitively for product.Thirdly, FIC’s scale globally allows us other advantages, especially when dealing with content partners.This was a problem for the erstwhile [ESPN STAR Sports] business, a 500 World Screen 10/13

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standalone sports business competing with channels run by platforms who were able to treat sports as a loss leader. It’s not a standalone business anymore. It’s part of a larger network, which allows us to leverage all of these strengths, whether it’s cross promotion or the ability to package really well. In factual and entertainment, you have to work much harder to get consumers to your screen. Everyone knows when Wimbledon is on. If you have a documentary somewhere or a movie somewhere, we have to really work hard at selling it.That expertise is something that we will bring to the table.

The FIC DNA has always been about collaboration with our affiliate partners, not competing with them. Let’s take Wimbledon. During the lower rounds we get five, eight, ten feeds at the same time.Traditionally, the [ESPN STAR Sports] feeds would show one feed on one channel.We will have a network of three or four sports channels, so we will show three or four matches [at the same time].We will be much, much more collaborative with our affiliate partners and say,Why don’t you show three or four matches on your channels? We have this great fiber delivery network, so we can give it to you for next to nothing.You show it on your channels, and suddenly the consumer is getting eight channels showing Wimbledon.You’re building Wimbledon up, you’re building the culture of watching sports up, and everybody is better off.That’s how we can add value to our affiliates, that’s how we can monetize better as well. Best of all, we’re building sports for the average consumer, which is very important.

TV ASIA PACIFIC: Tell me more about how FIC is working

with affiliates to help them drive ARPU and subscriptions.

GANDEVIA: Helping affiliates get a higher share for pay TV

and drive ARPU is, I would argue, the number one thing we think about from a business point of view, other than making sure that consumers love our product. We do it in a number of ways. For one, our products have to be hot.We’re being increasingly selective in what we buy, make and show.We really focus a lot on must-have product. Even within that, we focus on what I would call “live,” and by live I mean as close to production date or airdate in the U.S. as possible.That makes it more topical and reduces the possibility of piracy.We are investing a lot on screen.

We’re also putting more and more energy behind what everyone calls localization.We would call it customization to the market. We are increasing the number of languages we dub in. We subtitle in every language everywhere. Five to six of our brands are now almost—and in the next 10 months will be fully— dubbed in every major language.We are starting to do more and more high-quality original content.We are investing in original production in all our genres. The other side of the equation is more to do with the platforms. We try to make sure that in every genre we have multiple brands. And we have these brands in every [subscription] pack. We have products that we make for mini basic packs through to basic to extended basic to premium.We price them accordingly.We use those very effectively to help platforms upsell. A classic example would be in the movie category.We have FOX Movies Premium in the premium pack. In some markets we’ve introduced FOX Family Movies, which is a library movie channel, it doesn’t really have first runs.

We invest in it, dub it in the local language and put it in the basic pack.We use that for two things. One is inculcating the habit in consumers to keep watching Hollywood movies, and secondly, we use it as a promotional tool to push people up to buy the movie pack, including FOX Movies Premium. It’s important that we spend a lot of effort trying to work with platform part-

ners to make them understand and appreciate why we have so many channels and why we need some of them in basic.

TV ASIA PACIFIC: How is your TV Everywhere strategy progressing with your online player, FOX Movies Play?

GANDEVIA: Very well. We’ve now launched it in the Philippines, Hong Kong, Singapore. We’re about to launch in Japan, Taiwan,Thailand, Indonesia, almost everywhere.There are several stages we had to go through. Number one is, we’ve moved from just having a player for FOX Movies Premium to having multiple players. Different consumers want to consume this content in different ways at different points of time. Some just want the movie player, some want the Chinese movies player, some want sports, some want just an omnibus offering where they can browse between categories—that’s something we’re developing.

Also, some consumers don’t want to consume through our player because they just don’t know about it, and platforms have launched their own players.We don’t need to be protectionist at all. It goes back to the point on collaborating with platforms.

We’re very happy to give our content to our platform partners to put it on their player in a branded section.

The first step was making all these players, which we’re almost done with.The second step is getting as wide distribution as possible, which is ongoing. And of course, we’re very conscious the product has to deliver. It has taken some effort and investment, but we’re thrilled that we now can show almost all of our products across all our brands on our players.We have movies from Disney and FOX and all our independent studios.We have the rights for our television shows, our Chinese movies, documentaries from National Geographic Channel, Korean productions, BabyTV, sports—almost all of the product we buy now or make, we will ensure it goes on to the player.

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Red hot: FIC’s local-content initiatives include Asia’s Next Top Model on STAR World.

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By Mansha Daswani

Malaysia’s dominant pay-TV platform with a 50-plus penetration rate of TV homes, Astro is widely seen as Southeast Asia’s most technologically savvy operator. Over the past year the company has been rolling out high definition, DVRs and multiscreen capabilities to its customers while also investing in a host of local content. Rohana Rozhan, the CEO of Astro Malaysia, talks to TV Asia Pacific about innovation, driving pay-TV take-up and average revenue per user (ARPU) and offering flexible subscription packs to customers.

the next five years, the number of households will grow from 6.7 million to 7.7 million. That gives us a good framework to continue to grow our customer base.

But, a couple of years ago we realized that while the satellite delivery technology is our key competitive strength, we needed to supplement and complement it with other technologies. There is a continuing hunger for bandwidth, there is the need for mobility and an increasing need for personalization. We did not have HD, we did not

Astro’s TV ASIA PACIFIC: Astro was one of the first pay-TV

platforms in Asia to begin implementing a TV Everywhere strategy. Tell me about how you’ve transitioned your business so that you can deliver services like HD, DVRs and on-the-go access.

ROZHAN: We are still predominantly a DTH delivery company. That has, till today, put us in the best position within the Malaysian landscape. Using the satellite delivery technology, we are the only player in town who can actually reach the 6.7 million households within Malaysia. Malaysia is a very young country. The average age for the 30 million Malaysian people is about 26. We foresee that over

have PVR capabilities. We had to take a very committed decision to transition to the Astro B.yond platform, where the set-top box can continue to receive linear services through the satellite, and at the same time it can be IP connected or broadband connected. It can also deliver overthe-top service within the household. It was a big commitment for us to make. We were the market leader, but we had to reinvest in our technology so that when competition comes into play, our customers will still feel that we’re relevant and we’re positioned to give them choice and experience. We’ve had to go into everyone’s homes and swap out their existing boxes. Each of those swap-outs costs about RM650 ($200), of which about RM350 ($108) is the cost of the hardware and the balance is the sales and installation cost. We have over 3 million customers we have to do it for. We’re progressing really well in that swap-out exercise.

TV ASIA PACIFIC: And those enhancements have helped

increase your ARPU? ROZHAN: A couple of years ago, for every new customer

we’d add of a lower ARPU, our average ARPU would go down. But now, while we are growing our customer base really strongly, our ARPU continues to go up. We have a very segmented approach to selling and marketing our services. When we swap out the [old] boxes, we go to the high-net-worth customers first and these people will have the propensity to want to buy the HD, PVR, broadband, video-on-demand, over-the-top and on-the-go services.

It is an extremely encouraging take-up. As of April this year, of all the swapped-out boxes, about 64 percent are taking our HD services—60 percent are on the Superpack subscription and 40 percent pay RM20 ($6) per month—and about 350,000 customers are now taking PVR services. Superpack bundles are packaged by language segment, so there are bundles for the Malays, the Chinese, the international audience, the 502 World Screen 10/13

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Indian audiences. We amalgamate the right service offerings, the HD functionality and the PVR functionality.

That has been a phenomenal success. Just under 800,000 of our customers are taking a Superpack. The customer sees value, we see increased ARPU. Psychologically, the customer adds up all the individual packages and the PVR and the HD, and they come up to a big number. The Superpacks give them discounts on that total. They don’t mind spending more if they see value in it. It’s that kind of marketing that is doing really well. Our Astro First

the most efficient, cost-effective way, once you have scale, to deliver content to the homes, has to be supplemented and complemented in order to keep your value proposition whole for the customers. That’s why we need to also be a provider of broadband, we need to meet their needs to have content on their mobile devices, wherever they are. In content, innovation includes creating IP that not only resonates with mass audiences but also fills a market gap. Innovation includes the ability to understand consumers better, [which] enables us to provide a relevant value and experience proposition.

Rohana Rozhan proposition of local movies being made available two weeks post-cinema release has also been very successful, with almost 6 million buys to date. We just recently launched Astro On-the-Go commercially and we’ve already received more than 500,000 downloads of the app.

People can watch the channels they subscribe to in their living room or anywhere they go within Malaysia. We have launched this overseas as well. Those are all the initiatives we have taken [to increase ARPU]. We are starting to see people take up all the services that we never had before.

TV ASIA PACIFIC: What does innovation mean for Astro,

and how do you stay ahead of the technology curve?

ROZHAN: We try to be quite simple in our approach. We’re

about consumers, i.e., knowing them better and bringing them the right content proposition. We use best-in-class technology to do so. But first and foremost we are a content company.We’re very different from some of the other pay-TV companies who are simply aggregators and distributors of channels.We create our own IP, so we’re a true content company. We’ve got more than 170 channels—71 of them are local and these are the channels that underpin four out of every five hours of a customer’s daily viewing.

If you think about our approach to innovation, we don’t innovate for the sake of innovation. We look at the consumer, how they consume content and what they want more of, and then we use technology and creativity to provide that. In technology for instance, satellite delivery alone, although it is

We try to embrace innovation in our everyday life in pursuit of serving our customers better.

TV ASIA PACIFIC: For any pay-TV operator, sports is

often a key differentiating factor. It’s also expensive when it comes to marquee events. How do you balance being financially prudent while also delivering the best sports coverage to your customers?

ROZHAN: There’s no easy answer. Sports prices are escalating every time there’s a renewal. Astro is quite lucky in a few ways. Today we have 96-percent market share in Malaysian pay TV. We’ve got 3.6 million customers. And half of them are our sports customers. So we have the right scale. Whatever the price is on a per-unit basis, we’ll be the most cost-effective provider of content. We’re also the largest platform in Southeast Asia, which gives us some leverage. Our approach to sports, frankly, is no different to other content. We are about profitably packaging choice, value and experience for our customers, understanding what would truly differentiate us against alternatives in the marketplace. Today Astro is the destination for sports for all Malaysians. We have 14 international, regional and local sports channels, which can be viewed at home and over any device, anywhere, including live content. We are a producer, aggregator and distributor, so where it makes sense commercially we enter into carriage agreements for some of our sports channels [with other platforms], or collaborate on sports rights.

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All smiles: Astro organizes the Miss Astro Chinese International Pageant, the winner of which goes on to represent Malaysia in the Miss Chinese International Pageant.

TV ASIA PACIFIC: Many platforms worldwide are worried about over-the-top television providers siphoning off pay-TV customers. Is that a concern for Astro?

ROZHAN: Our core strength is that we have had a business for 17 years and we’ve built a relationship with 3.6 million households. It’s four to five individuals in each household. Each one of them wants a different subset of content as part of that whole subscription to consume individually and on their personal devices. If you are a Superpack customer, for instance, we will enable two of your devices to watch any of the content you subscribe to in the main living room, anywhere in the household or outside the household, for free. If you want two more devices, knowing that a household is typically four or five people, it will cost you RM25 ($7). For that customer it becomes a good value proposition. It’s not a new relationship, it’s not a transactional in-and-out relationship, it’s a continuous relationship that we build on and we provide value for. When we do this the household consumption of content actually grows. We have also recently extended this proposition outside of Malaysia. This is possible by virtue of us owning our own content IP and channel brands.

TV ASIA PACIFIC: What are your main areas of focus for the next year?

ROZHAN: [Our recent financial results showed] doubledigit growth, and I don’t see any reason why we don’t 504 World Screen 10/13

maintain that. We will see growth coming from three things primarily: one is customer numbers. Second is ARPU, and that’s a very segmented, targeted approach where the top-end customers will be our dream customers, taking not only the Superpacks but also broadband as well as the on-the-go as well as buying VOD titles from us. The mid customers will be those taking the value packs and the lower-level broadband, etc. And then the new customers are coming in at the RM70 ($22) [per month subscription]. On a blended basis, our ARPU is trending upwards nicely. We hope for that to continue. The third element is advertising expenditure. Last year we outstripped the market—we grew at 9 percent while the market grew at 5 percent. This quarter’s numbers are looking even better. There are three reasons for that. One is we’re getting more customers on our service, so we’re becoming more and more relevant to advertisers. Second is our own IP, which we create and produce ourselves and is exclusive to us. It is resonating extremely well with the consumer, generating viewership at about the 1-million mark, which

by Malaysia’s standards means it’s almost at the same level as free-to-air. And the third element is the fact that Malaysia is unique in the sense that print still has the bulk of advertising dollars, about 55 percent. The trend is [that is decreasing] and it’s going to the pay-TV area. We’ve also got complementary media assets—TV, radio, publications, online—so we’re able to bundle a very compelling proposition to media buyers.

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