TV AsiaPac MIPTV 2015

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APRIL 2015

MIPTV & APOS EDITION

Pay-TV Channels / Youku Tudou’s Victor Koo / Turner’s Ricky Ow / HOOQ’s Peter Bithos

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CONTENTS FEATURE

Playing Leapfrog

10 CHANNEL HOPPING

Localization, expansion and new competition are key concerns for Asia's top pay-TV channel operators.

Conventional wisdom once held that the piracy problems across Asia were so endemic, and the technological hurdles so great, that OTT was a non-starter.

Ricardo Seguin Guise Publisher Mansha Daswani Editor Kristin Brzoznowski Managing Editor Joanna Padovano Associate Editor Joel Marino Assistant Editor Simon Weaver Online Director Victor L. Cuevas Production & Design Director Phyllis Q. Busell Art Director Faustyna Hariasz Sales & Marketing Manager Dana Mattison Sales & Marketing Coordinator Erika Santana Sales & Marketing Assistant 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 AsiaPac © 2015 WSN INC. 1123 Broadway, #1207 New York, NY 10010 Phone: (212) 924-7620 Fax: (212) 924-6940 Website: www.tvasiapac.ws

So much for that theory. Two months into the year of the sheep (or the goat, or the ram—that determination has been lost in translation), it’s clear that OTT is very much a gamechanger across the region. And there’s no consensus on how much of a headache, or a boon, that means for the media business at large. What we know for sure is that things are moving very quickly. Just look at China, where it used to be almost impossible for companies to get paid for content. OTT platforms are paying top dollar for imported programming, including big-name formats. Sixteen years since its first broadcast, Big Brother has finally cracked China—via an online platform, Youku Tudou. In this edition we hear from that company’s chairman and CEO, Victor Koo, about the latest developments in Chinese internet video.

Industry watchers will be anxious to see how Netflix fares in Japan, especially given that Hulu tried it and retreated, selling off its platform to Nippon TV last year. Hong Kong telco PCCW recently picked up a majority stake in Vuclip, a mobile VOD service whose footprint covers India, Indonesia and Malaysia, among other markets. The joint venture HOOQ is up and running. Its CEO, Peter Bithos, shares his grand plans for the new streaming platform in this edition of TV AsiaPac. So what do all these new entrants mean for the region’s existing pay-TV business? Executives from Asia’s biggest channel brands, including Turner’s Ricky Ow, share their strategies for protecting their turf in this edition.

The biggest issues for incumbent channels and platforms may well be in those territories where traditional subscription television has been slow to take root. Will Asia’s emerging middle classes skip the cord altogether and go straight to OTT? I think back to something that Michelle Guthrie, then the head of STAR (and today a senior exec at Google Asia), told me in 2004. Some markets, she said, “are not going to bother with analog [pay TV], they’re just going to go straight to digital.” There’d be a technological leapfrog, she said. More than a decade on, the delivery methods may have changed but the issues at stake haven’t—it's still about getting the right programming to the consumer with a business model that works. That fact won’t be lost in translation, no matter how many more changes are still to come in how viewers choose to consume content.

—Mansha Daswani

10 INTERVIEWS

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Youku Tudou’s Victor Koo

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Turner’s Ricky Ow

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HOOQ’s Peter Bithos

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ABC Commercial The Secret River / 72 Dangerous Places to Live / Birthplace of the Giants From the makers of 72 Dangerous Animals Australia comes 72 Dangerous Places to Live, sold by ABC Commercial. “The fascinating subject matter and the tight, well-paced episodes will appeal to factual buyers around the world,” says Sharon Ramsay-Luck, the head of sales and business development at ABC Commercial. The company also has a new two-part drama, The Secret River, based on a novel by Kate Grenville.

“The Secret River is compelling storytelling with stunning production values, and it deals in the universal themes of what makes and breaks a good person and the extremes people can [reach] to protect their families,” says Ramsay-Luck. The onehour doc Birthplace of the Giants, meanwhile, provides insight into the breeding season of humpback whales.

“We have a depth and breadth to our catalogue, which means that there is something there to suit all buyers’ needs.”

—Sharon Ramsay-Luck Birthplace of the Giants

ABS-CBN International Distribution Forevermore / Two Wives / Bridges of Love Leading the pack of ABS-CBN International Distribution’s TV dramas is Forevermore, currently the number one title on Filipino prime-time television. “This top-rating romance maps out the joys and aches of a first love between the son of a hotel magnate and a beautiful but feisty strawberry farmer,” says Evelyn “Leng” Raymundo, the company’s VP of integrated program acquisitions and international distribution.

Raymundo says that Two Wives, the hit adaptation of a Korean drama, “offers an intense experience through the superb acting of its cast and its unique Filipino twist to this extraordinary tale of infidelity.” Positioned for evening programming, Bridges of Love features Asia’s reigning prince of drama, Jericho Rosales.

“At the core of ABS-CBN dramas are heartfelt Filipino stories that have universal appeal.”

—Evelyn Raymundo Bridges of Love

Bomanbridge Media Haute & Saucy / Box Yourself / Doctor What: Diagnosis Unknown Fashionista Kelly Randall Sia leads the action in Bomanbridge Media’s Haute & Saucy. “We have seen many variations of extremely successful cooking shows, from competition to instructional series, but this one has a fresh take on what goes on in the kitchen,” says Sonia Fleck, the CEO of Bomanbridge. “It’s a character-driven reality series featuring a very talented woman who cooks like a queen and dresses like one, too.” Bomanbridge highlights also include Box Yourself, which “really ignites creative enthusiasm in kids and takes a fresh look at fun-filled activities,” says Fleck.

The format Doctor What: Diagnosis Unknown sees junior doctors presented with puzzling cases in the form of video reenactments dramatizing medical conditions.

“We have taken a strategic and focused approach with our distribution to create viable commercial revenue for our producers.”

—Sonia Fleck Haute & Saucy 434 World Screen 4/15

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CJ E&M Corporation Super Daddy Yeol / Family Secrets / Hogu’s Love A dying mother trying to turn an egotistical man into a father figure for her young child is the central character of the drama Super Daddy Yeol. CJ E&M Corporation is highlighting that title at this year’s MIPTV, along with Family Secrets, about a woman who discovers that someone from within her own family kidnapped her daughter. “Family Secrets is a telenovela and the first Chilean drama to be remade in Korea,” says Don Kang, the company’s senior sales manager. “Propelled by the past success of CJ’s telenovela lineup, including Ice Adonis, [Family Secrets] is already seeing increased attention.” The company is also offering up Hogu’s Love, a drama based on a famous webtoon that Kang says will appeal to young viewers.

“Our business has been growing rapidly in Asia, and we hope to partner with many VOD companies in the region.”

Family Secrets

—Don Kang

FOX International Channels FOX Sports Asia / STAR World / SCM Producing more original content across Asia is a priority for FOX International Channels (FIC) this year. The company is already doing so in a range of genres, including sports, with its flagship FOX Sports Central nightly show, produced in Singapore, airing on FOX Sports Asia. In the way of entertainment, a third season of Asia’s Next Top Model recently launched on FIC’s female-targeted entertainment channel STAR World. SCM, FIC’s flagship Chinese movies channel, currently has eight to ten coproduced films in various stages of production, all of which are part of the company’s “Go Local!” initiative aimed at supporting local on- and off-camera film talent in Hong Kong and across Asia.

Asia’s Next Top Model on STAR World

FremantleMedia International No Offence / Eye Candy / The Seventies From award-winning writer/producer Paul Abbott comes No Offence, a darkly comedic police procedural set in Manchester, where a team of officers attempts to enforce the law. “Further to dealing with the daily grime, the squad, led by the sharp Inspector Vivienne Deering, suddenly has its hands full when a big case involving a twisted serial killer emerges,” says Paul Ridley, the senior executive VP of sales and distribution for the Asia Pacific at FremantleMedia International, which is looking to secure AsiaPac sales for the title. Also on the company’s MIPTV slate is Eye Candy, an MTV original series based on the novel by R.L. Stine, and The Seventies, a CNN original from Tom Hanks and Gary Goetzman’s Playtone and Mark Herzog’s Herzog & Company.

“Eye Candy catapults crime drama into the 21st century.”

—Paul Ridley Eye Candy 436 World Screen 4/15

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HBO Asia Game of Thrones / Starting with the new season of Game of Thrones, all HBO and Cinemax original programs will premiere on HBO Asia at the same time as in the U.S. In addition to Game of Thrones, shows such as Silicon Valley, Veep, True Detective, The Leftovers and Getting On will premiere on HBO Asia simultaneously with the U.S. “HBO Asia will continue to offer our subscribers more localized programming [features] such as local-language subtitles and dual-language audio options,” says Magdalene Ew, the head of marketing, creative and content at HBO Asia. “Subscribers in Malaysia and Indonesia can look forward to an animated blockbuster movie in the local language, voiced by local celebrities, that will be premiering for the first time on Asian television later this year.”

“The simulcast of original programs premiering in Asia at the same time as the U.S. will help our continued efforts to combat piracy and end the reading of spoilers on social media.”

—Magdalene Ew Game of Thrones on HBO Asia

Rewind Networks HITS / Rewind Networks’ HITS channel is dedicated to delivering classic comedies and dramas in HD. Featured among its lineup are Mork & Mindy, Diff’rent Strokes, Cheers, The Wonder Years, Seinfeld and The X-Files. “We continue to invest in marquee shows that deliver on our proposition,” says Sandie Lee, the VP and channel head of Rewind Networks. “[We are] buying more seasons of the shows that have worked for our network.” HITS is also concentrating on series that come with TV Everywhere rights, Lee notes. HITS is now available in 6 million homes across Southeast Asia, with a current distribution that includes Malaysia, Indonesia, the Philippines and Singapore. Lee says the channel is eyeing further expansion in Southeast Asia, Hong Kong and Taiwan.

“The HITS proposition has worked very well, and we remain focused on getting full distribution in the markets for which we have the rights.”

—Sandie Lee The Wonder Years on HITS

TV5MONDE Asia-Pacific TV5MONDE Asie / TV5MONDE Pacifique TV5MONDE Asia-Pacific recently launched a special weekly documentary slot, Oxygène, dedicated to environmental awareness. This new time slot is on Sundays at 11 p.m. on TV5MONDE Pacifique and on the following Monday on TV5MONDE Asie at 9 p.m. Additionally, a new channel dedicated to lifestyle programming has been launched in the region. TV5MONDE HD Style features exclusive content on French fashion, luxury living, gastronomy, design and more.

“We believe this channel could become one of the most popular channels in the region, considering the very high quality of the content and the high demand for upscale French products in the region,” says Alexandre Muller, the managing director of TV5MONDE Asia-Pacific.

“TV5MONDE is already available throughout the Asia-Pacific region in every market apart from Malaysia.”

—Alexandre Muller Tendance XXI on TV5MONDE HD Style 438 World Screen 4/15

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E!’s Facing Up to Fazura.

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Channel

HOPPING Localization, expansion and new competition are key concerns for Asia's top pay-TV channel operators. By Mansha Daswani or Asia’s pay-TV industry, 2015 is likely to be remembered as the year that OTT went from being a potential hiccup on the horizon to a very real concern (or a lucrative opportunity, depending on what side of the rightsownership table you’re on.)

Netflix, after years of not talking about Asia at all, has landed in Australia and is arriving this fall in Japan, with other territories to follow suit as the streaming platform works towards completing its global rollout by the end of 2016. Another multi-country platform, HOOQ has rolled out in the Philippines and will be progressing to other territories throughout the year. Numerous local services in China, India, Thailand, Malaysia and other markets are starting to see traction.

According to Media Partners Asia (MPA), which is behind the Asia Pacific Video Operators Summit (APOS) taking place in Bali this month, there will be some 977 million OTT customers in the region by 2020.

“The market for the legal consumption of OTT services in Asia Pacific is at an early stage, with monetization models nascent in most countries,” says Vivek Couto, MPA’s executive director. “As barriers to entry reduce and broadband penetration increases, more disruptors are emerging and a host of new platforms are proliferating, though business models are not always scalable and issues such as piracy, content and platform operation remain problematic.”

As these emerging players begin to make waves, established cable and satellite channels are working hard to protect their turf—from rolling out their own digital services to strengthening their packages for advertisers and battling it out for the exclusive rights to top-notch content.

“The good news is, there are people who want to pay for television content,” says Ricky Ow, the president of Turner International Asia Pacific. “Whether it’s OTT with the operators or with an independent player like Netflix, if we can try to enlarge that paying base, it’s an opportunity for the whole

industry.” (It’s worth noting that Turner’s sister company, Warner Bros., is a partner in the new OTT platform HOOQ.) “Any market where we can legally deliver OTT—where there’s a consumer need and it’s not fueled by piracy—represents an opportunity for us to take our content forward,” says Prem Kamath, the deputy managing director for the Asia Pacific at A+E Networks. “We do own a lot of the content ourselves, so we tend to have the rights to exploit it not just on linear television, but also across OTT.” As for the prospects for stand-alone OTT entities, Kamath notes that there are likely to be plenty of hurdles ahead.

“Pay TV is still growing, penetration is not that high and ARPUs are not at the levels they are in the U.S. or Australia. There are a lot of local affiliates ramping up their own TV Everywhere (TVE) and OTT offerings in order to try and preempt the entry of platforms like Netflix.”

Bruce Tuchman, the president of AMC Global and Sundance Channel Global, notes that his business has “prospered because of the traditional pay-TV ecosystem,” adding that parent company AMC Networks was once part of U.S. cable operator Cablevision. “OTT is a challenge because it creates another way for people to watch programming. Should the pay-TV ecosystem not continue to prosper, that represents a loss of revenue—revenue that has helped people like us invest in quality programming. So we want to make sure that these two technologies don’t collide, but work harmoniously together.”

Tuchman doesn’t see an immediate threat of OTT eating into traditional pay-TV revenues in Asia. “One of the reasons Netflix has done so well in the U.S. is that there’s typically a giant cost disparity [with the price of subscribing to cable]. It’s not quite as large across Asia; in some instances it’s not significant at all. It also takes a very robust broadband infrastructure, which you don’t have everywhere in Asia. There are many organic reasons why OTT might develop a lot differently in Asia. The challenge for the existing channels and operators is to up their game: better navigation and authenticated TVE and VOD. We do a lot of that with our operators.”

Making sure their content is accessible on a variety of platforms is standard operating procedure for all of the region’s leading pay channel operators.

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FIC is making local content across the region, including in Taiwan, where it produces the series Champion Mission for SCC.

but also due to a generally ‘relaxed’ approach towards piracy throughout Asia. RTL CBS Asia is one of the few international networks that offers all content on all platforms, which is one key element of combating piracy.”

RTL CBS is one of a number of channel operators employing a day-and-date strategy with programming, releasing shows as close to the U.S. airdate as possible. House of Cards is a recent example. “We aired season three on the same day as its U.S. release and showed all 13 episodes back-toback, which hasn’t been done in Asia before,” Engwall says.

FOX International Channels (FIC) premiered Battle Creek on FOX in Hong Kong and Southeast Asia on the same day as its U.S. launch. In addition, the Asian FOX feeds will be part of the global dayand-date rollout of Wayward Pines in May. For the return of Game of Thrones this month, HBO Asia subscribers will be able to watch the new season at the same time as viewers in the U.S. Episodes will premiere in Asia in the morning, with an encore broadcast in prime time.

“The simultaneous airing of new seasons and brandnew original programs as the U.S. will help with our continued fight against piracy, and end the angst of reading about show spoilers on social media,” says Jonathan Spink, HBO Asia’s CEO. “Express” programming has been a pillar of Fellowes’ strategy at UNI. “Titles like DIVA’s Downton Abbey, Universal Channel’s Chicago Fire and Syfy’s Sharknado franchise—as well as up to 90 percent of E!’s first-run programming—are given this ‘Express’ treatment,” she says.

“We have launched our own OTT/TVE service in the region through our regional websites,” states Alexandre Muller, managing director at TV5MONDE Asia Pacific. “It offers up to four live channels, VOD and catch up on multiple devices.”

Sony Pictures Television Networks, Asia is working with its affiliate partners to get content from its brands, including AXN and SET, onto operators’ TVE extensions. It’s “an opportunity to strengthen your brand with viewers,” says Hui Keng Ang, senior VP and general manager. “The key is to identify a viable business model and the optimal way to monetize the platform. Given the fragmented nature of the region, it’s a tricky proposition, but one that we as an industry need to solve, quickly. The key is to build digital infrastructure and assets that can generate long-term margins.”

TVE has been a growth story for Universal Networks International’s (UNI) Asia-Pacific business over the past year.

THE LOOK OF ASIA “We are always looking at new opportunities and, given the The best of American and British programming has cerever-changing nature of consumers accessing content, we are tainly boosted the fortunes of many entertainment chanexcited by the possibility of scaling up in large markets via OTT nels in Asia, but local relevance has become just as and new, emerging technologies—both with our existing partimportant as the market gets more crowded—and OTT ners and new players,” says Christine Fellowes, managing platforms become more aggressive in securing the rights director for the region. “Our channels are now available as to high-end imports. authenticated, linear streamed simulcast services for broadband and mobile on Chunghwa Telecom in Taiwan, Telekom Malaysia’s HyppTV and StarHub in Singapore.”

This year, Fellowes adds, delivering catch-up VOD through UNI’s operator partners is a primary objective.

One of the newer entrants to the region, RTL CBS Asia Entertainment Network, has been, since its inception, “100 percent focused on a 360-degree content approach and making all our content available via all access methods,” says CEO Jonas Engwall.

“A huge amount of content in Asia today is consumed via mobile and the internet,” Engwall notes. “Unfor tunately, the bulk of this is via pirate websites, partly as a result of the industry lagging behind consumer behavior, Les Carnets de Julie airs on TV5MONDE, which has seen its subscriber base increase over the last year.

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With the return of Game of Thrones this month, HBO Asia is delivering the series to its subscribers at the same time as the U.S. broadcast, with a repeat in prime time.

FIC is producing a wealth of content across its brands in the region, from FOX Sports to National Geographic Channel to STAR World. It has been particularly active in Chineselanguage entertainment over the past year or so for its SCM and SCC channels.

“We do a lot of productions in Taiwan and Hong Kong, leveraging our relationships in China,” says Joon Lee, managing director for Hong Kong and Southeast Asia at FIC. “We are expanding our local productions in Taiwan, Hong Kong and to some extent Singapore. We have this project called ‘Go Local!’ where we set aside a fund to sponsor young, talented independents to make locally relevant films. Many of the funds out there are moving towards China, so the creative talent in Taiwan and Hong Kong and Singapore are left out somewhat.”

UNI has placed an increased emphasis on local programming over the last 12 months. E! recently premiered its firstever Malaysian miniseries, Facing Up to Fazura. Out of the Philippines, E! rolled out the reality series It Takes Gutz to be a Gutierrez. Launching in June on Syfy will be the second season of The Paranormal Zone. DIVA has commissioned a local version of the lifestyle format How Do I Look? And in Australia, E! has renewed Fashion Bloggers for a second season.

AFFILIATE RELATIONS “We have also strengthened our partnerships across the region, collaborating with operators to bring our brands and talent closer to subscribers,” Fellowes says. “We facilitated Astro’s production of two 30-minute, L.A.-focused specials, helmed by Malaysian TV personality Aznil Nawawi, arranging exclusive interviews with E!’s Kim Kardashian, Giuliana Rancic and Christina Milian. And, to promote the premiere of Tricked on Universal Channel on Telekom Malaysia’s HyppTV, we brought British magician Ben Hanlin down to Kuala Lumpur. We’re committed to bringing our brands closer to their fans.”

AXN this March premiered a pan-Asian version of FremantleMedia’s Got Talent format. Local productions,

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Sony’s Ang says, have been beneficial to the company’s ability to serve its advertising clients.

“More than ever, advertisers are looking to maximize their budgets with campaigns that go beyond the traditional 30-second spot and, given our diverse and fragmented market, they are looking for high-impact, multiplatform regional campaigns. Asia’s Got Talent is a great example of how we’re delivering on these expectations, with our regional partner brands seamlessly integrated into the show.”

FOLLOWING THE MONEY A+E’s Kamath also points to local productions, among them Photo Face-Off on HISTORY and Mom’s Time Out on Lifetime, as having helped boost ties with ad clients. “Local productions help us drive fairly steady and strong ad-sales growth. And as an overall trend, we’re seeing advertising going more local. There are more companies and brands that are really looking at localizing their ad spend, rather than doing it on a pan-regional level. That’s a trend you’ll see gathering steam as we go forward. That is why most broadcasters are looking at localizing their product offerings as well.”

“It’s a local ad-sales story,” affirms Turner’s Ow. “It’s hard to say how [the overall market is] because when one country is down, another one is up. But as a whole, we’re still seeing growth in ad sales.”

Channels are also seeing subscriber gains as the pay-TV businesses develop in emerging markets such as Indonesia and Vietnam.

“TV5MONDE added 13 million new subscribers to its channel in the region over the last year,” Muller says. “There are still massive growth opportunities across the region as new operators are appearing every day. Furthermore, there are still margins to grow in each of the traditional markets for our brands, and there are also plenty of possibilities in smaller ones like Myanmar, Bangladesh and Cambodia.”

Scripps Networks Interactive, which has only been active in Asia for the last few years, is exploring opportunities across

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AXN is investing in big pan-regional original productions like Asia’s Got Talent, based on the FremantleMedia format.

developed and emerging markets. “For mature markets, we offer a great way to enhance [a pay-TV platform’s] portfolio at minimal cost to reach additional customers,” says Derek Chang, managing director for Scripps’ Asia-Pacific business.

“For emerging markets, our brands enhance their ability to educate consumers on the value proposition of pay TV.” A+E Networks’ Kamath is not discouraged by markets like the Philippines or Indonesia, where growth in pay TV has not moved as fast as those working in the industry would like.

“We have yet to see the peak of the pay-TV market in most of the territories we operate in,” Kamath says. “Having said that, a key challenge for us is balancing the whole aspect of regional versus local. The way most broadcaster businesses are structured right now is that we operate pan-regional beams. We’re starting to localize in certain markets. As we become more and more local, balancing out the economies of scale that a regional beam offers remains a challenge.”

FEEDING FRENZY Launching more local feeds to tap into local ad buys is a priority for many channel operators. A number are also launching new brands. Scripps recently added to its portfolio with HGTV Asia. “The launch of HGTV in Asia is the first-ever expansion of HGTV outside North America,” Chang says. Following the launch in Singapore, HGTV Asia has secured carriage in Australia, the Philippines and Mongolia. There have also been new launches for Asian Food Channel and Food Network.

“Our priority is to continue to build scale for the division in well-developed markets where Scripps Networks has a presence—such as Singapore, Malaysia, Philippines, Indonesia, Hong Kong, Taiwan, Thailand and Vietnam,” Chang adds. “We are also focused on growing our distribution in markets where we have had more limited distribution, like Australia, New Zealand, India, Japan, Korea and China.”

Turner’s Ow sees continued room for growth in the kids’ business, following the positive reaction to the Toonami and Boomerang launches in 2014. “We’ve launched a POGO block

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in Thailand on one of the main terrestrial channels. I think that will help us to really build up our kids’ business in Thailand in a big way. Last year we opened the Cartoon Network Amazone water park in Thailand, in addition to launching Toonami Thailand, a completely local-language channel. In Australia, we have launched an authenticated version of Cartoon Network Watch and Play for existing Foxtel subscribers. We’re also looking to launch a new Cartoon Network app that hosts content that will be totally different from the main channel. It will be short form. The app is not authenticated. It’s advertising driven. It’s getting the brand in front of the kids, even if they are not pay-TV subscribers.”

On the entertainment front, meanwhile, rollout continues on the Oh!K Korean channel, and Warner TV has been relaunched with a new on-air look to appeal to a slightly younger demo with series like iZOMBIE and Gotham.

TV5MONDE has just launched a new channel, delivering French lifestyle content, subtitled in English and Chinese.

AMC’s Tuchman expects to see continued traction on Sundance Channel and the more recent AMC, which replaced MGM. “We do interesting first-run, independent, unconventional content that is going to keep a lot of younger people, potential cord cutters, glued to the television to watch things that they can’t find anywhere else,” Tuchman says. “That’s what Sundance and AMC represent in these more challenging markets. The biggest opportunity for us is to stand behind these premium brands and the original content people want. Unless things change drastically, what’s clear is that audiences flock to great original products. If you don’t have original products, you may not survive. If you secure and broadcast compelling, original product, you’re still going to be able to build audiences in an increasingly fragmented and distracted world.”

Ultimately, whether you’re a new entrant in Asia’s multichannel market or an incumbent, the following words from RTL CBS’s Engwall apply. “We have to try harder, do better than the competition, and be bolder in our approach in making ourselves seen and heard in the region.”

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VICTOR KOO

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YOUKU TUDOU Between them, Youku and Tudou reach more than 500 million unique visitors monthly in China with their mix of original content, user-generated clips and series and movies imported from across the globe. The former competitors came together to create China’s largest internet video company in 2012.

Chairman and CEO Victor Koo, who founded Youku, has been working in China’s internet business since the ’90s, helping to shape what is now the biggest OTT market in the world. He shares with TV AsiaPac his views on trends in internet video, interactive content and what’s in store for the future.

TV ASIAPAC: What trends are you seeing in how your users access Youku and Tudou?

KOO: Mobile is now the primary screen. Before 2012, internet video was mostly consumed on PCs. In 2013, 2014 that changed dramatically. Now more than 60 percent of our consumption is from the mobile screen. Internet-enabled TV is the emerging screen. We also address the big screen—we’re starting to jointly produce movies. We’ve produced 11 movies with Chinese film companies.

TV ASIAPAC: The big U.S. OTT platforms like Netflix are focusing most of their original efforts on scripted productions.

You’re commissioning drama and movies, but also a lot of original entertainment and reality shows that many could argue are best suited for live viewing. Why are those kinds of series working for you?

KOO: Most people are used to watching film and [scripted] television content when they go to Netflix. When people come to Youku and Tudou, they’ve had a history of watching variety shows. We started producing our own pretty early—in 2009 Youku started launching interactive live concerts, and Tudou did an interactive variety show. It’s going back to the idea of multiscreen interaction—thinking about these screens and how you create an experience that’s tailored to the multiscreen age. We’re even thinking about interactive features. We’re creating shows that enable users to deal with e-commerce, for example. Those kinds of elements are incorporated into our thinking as we develop original content.

TV ASIAPAC: I recall you also aired some World Cup games.

How does sports content fit into your programming mix?

KOO: We see sports as a current event or a news event. People come to Youku wanting to find out what’s best, what’s new, what’s fresh. We’re the number one video website in China.

Users want to see what’s grabbing people’s attention, whether it’s a movie or a variety show or the World Cup. TV ASIAPAC: How do you see Youku Tudou’s positioning in the broader Chinese OTT landscape?

KOO: The industry has really consolidated. If you look at the U.S., there are a couple of video players but their models are different from each other—whether it’s YouTube, Netflix, Amazon or Hulu. In China, there’s a very small set of players, but the models do cross over. What’s unique about Youku

Tudou is that we deliver web-native content, whether that’s UGC or PGC [partner-generated content] or original content.

We have a very significant advantage over our competitors, which are focused on syndicated content. Their models tend to be more like Hulu’s, where our model is more like a combination of YouTube and Netflix.

TV ASIAPAC: Tell us about the regulatory environment you operate in and the limitations on the content you can deliver.

KOO: Like all companies, we have to abide by the local government regulations. It is a part of doing business in China.

Since the very beginning, as we started as a video-sharing platform, we’ve had a lot of content monitoring and systems and procedures in place, whether through technology or by a team of people. It’s an area that makes us partnerand advertiser-friendly as well. We see it as an important part of our business.

TV ASIAPAC: You’ve been working in the Chinese online video space since its inception. How do you see the landscape evolving over the next few years?

KOO: I would say the online video space in China started around 2005, 2006. Over the last nine years, the way that video content is consumed, distributed and marketed has fundamentally changed. How content is created, as well as monetized, is continuing to change. We’re still in the innovation cycle of that. That’s not to say that distribution and marketing innovation has stopped. We’re now a multiscreen company—we went from one screen to five screens [PC, mobile, tablet, TV set, theatrical]. That innovation, moving from being a single-screen video platform to being a multiscreen video platform, really happened in the last two or three years. As we go forward over the next few years, I think these five will still be the primary screens.

In distribution, we’ve seen a fundamental seismic shift already. But in terms of the way content is created, we’ve done a lot of innovating over the last six years and we’re still seeing a lot of innovation happening.

TV ASIAPAC: Do you think the linear channels you and I grew up on will still be around in five years’ time?

KOO: People will still want to have the browse, sit back on the couch experience. But, people are looking to different screens to serve different needs.

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By Mansha Daswani

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RICKY OW TURNER

By Mansha Daswani

Turner Broadcasting System was one of the first American companies to target Asia’s burgeoning pay-TV market back in the ’90s. From its Hong Kong headquarters, Turner International Asia Pacific has built a strong presence throughout the region, operating a portfolio of brands across the kids’, news and entertainment landscapes. As president of Turner International Asia Pacific, Ricky Ow is navigating the company through the evolving Asian multichannel business by launching new brands and digital services and by driving localization efforts.

TV ASIAPAC: What have been the major developments for Turner’s Asian business over the last 12 months?

OW: Last year we created a very strong growth story for Turner. We launched an all-new Boomerang in Southeast Asia and Australia. We launched new services for Toonami in India and Thailand. We took over Warner TV as part of the Turner portfolio, and that added an entertainment pillar for us. We have HBO India, too, as part of our portfolio now, and we launched Oh!K, a new Korean generalentertainment channel for Southeast Asia. We also started rolling out a lot more TV Everywhere [services].

TV ASIAPAC: How has the response been to Oh!K? OW: Initial response has been very good. The big differentiator [between us and other services] is that we are the fastest to bring Korean content onto our channel. We’ll be faster than any other traditional media outlet. There will be no reason for [a subscriber] to look at the pirate sites. We bring the content to viewers within 24 hours [of the Korean broadcast]. The nearest [on other channels] is three to five days.

TV ASIAPAC: What has been your strategy for TV Everywhere services?

OW: It’s important that if you subscribe to pay television, you can watch it everywhere and anywhere, on an authenticated basis. We’ve done a lot in Hong Kong and Thailand for Cartoon Network and for Warner TV. CNN has also long been available on many of our partners’ TV Everywhere services. If the platform has it, we will try to make our content available to them. Our goal is to encourage it because we think pay television as a whole does a bad job at TV Everywhere. It has become much more important for the ecosystem to look at how we can do TV Everywhere a lot better.

TV ASIAPAC: How do you approach the region’s emerging markets, like Vietnam or Indonesia, where pay-TV penetration rates are still comparatively low?

OW: The same way I approach Singapore and Malaysia. If you look at Hong Kong just a few years back, pay TV wasn’t even a concept. Now we have a whole support system, from billing to marketing to consumer delivery. In markets like the Philippines and Indonesia, it’s no longer just the high end of the market buying [pay TV]—it’s going to the masses. So, there’s still a lot of growth opportunity. The key for us is, in order to fuel this growth, we have to be localized.

TV ASIAPAC: Do you see the new OTT platforms launching as an opportunity or a threat?

OW: I’d like to see it as an opportunity rather than a threat.

It will drive some consolidation in the business for sure, but it will not be the death of pay television. Pay TV will take a different form, and OTT will be part of that form.

The good news is, there are people who want to pay for television content. Whether it’s OTT with the operators or with an independent player like Netflix, if we can try to enlarge that paying base, it’s an opportunity for the whole industry. It’s not a threat.

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has an affinity for Hollywood content. It has the best wireless infrastructure of any of the emerging markets in Asia. It was the only market where the entire ecosystem has rolled out LTE and the 3G network is everywhere. And we found a great distribution partner, the local telco Globe Telecom.

India is critical for us. It’s unbelievable how fast that market is evolving. We believe our mix of local and Hollywood content is truly differentiated. We have a fantastic opportunity to get into the Indian market quickly with a value proposition that appeals to people who love quality stories. We’re not going to be the mass-market premium model with a cricket offering. But with 1.1 billion people, there are a lot of movie lovers out there!

The biggest challenge in Indonesia is the network readiness.

The desire from the customer is definitely there, but there is a lot of 2G [in the mobile] network, particularly in the provinces outside of Jakarta, and fixed-line broadband is not as prevalent. We will get to Indonesia, but it won’t be until later this year.

TV ASIAPAC: Are you going to be purely an SVOD play or will you be looking at other revenue models?

BITHOS: We launched with a subscription model at an emerging-market price point. That was one of the core fea-

PETER BITHOS HOOQ

By Mansha Daswani

Unveiled earlier this year, HOOQ has set its sights on being the leading regional OTT streaming service for the Asia Pacific. Formed as a joint venture between Singtel, Warner Bros. and Sony Pictures Television, HOOQ has lined up some 10,000 movie and TV titles to offer its customers. It has already rolled out in the Philippines and is looking to expand to key Southeast Asian territories like Indonesia and Thailand, as well as to the Indian market. HOOQ CEO Peter Bithos shares with TV AsiaPac his ambitions for the new platform.

TV ASIAPAC: How did the joint venture for HOOQ come about?

BITHOS: It started with a fundamental customer need across emerging markets. There’s an emerging middle class of 1 to 2 billion people across Southeast Asia and South Asia, depending on which countries you count. Those individuals are finally getting to the point economically where they have some disposable income to spend on things like digital entertainment. The average age in Asia is about 26 or 27.

The youth across Asia are digitally savvy, but no one is providing a convenient, legal and affordable way for them to get the content they want, how they want it, when they want it.

From that, we found in Warner Bros., Sony and Singtel three partners that said they could fill that need.

TV ASIAPAC: Tell us about your content strategy.

BITHOS: It is not an exclusive play with Warner Bros. and Sony.

We have Hollywood content from other studios as well, and we complement that with a very deep content catalogue from any local market we go into. We just announced our launch in the Philippines. The Singtel Asia footprint is where we’ll start, and that includes India, Thailand and Indonesia.

We started with the Philippines for a couple of really great reasons. It has a population of 100 million people. It’s the youngest country in Asia. Also, depending on the quarter, it has the fastest-growing economy. It’s English speaking and

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tures for our start-up. Our first announced price point was PHP199, which is around $4 a month. But, in Asia you have to have more pricing innovation. Sachet pricing is prevalent in just about every industry—the ability to get a bite-sized component of something bigger. One of the pricing innovations we’ll be working very hard at is a way for people to access content in more manageable value chunks—be it 50 cents or $1.

TV ASIAPAC: How do you factor in the varying broadband speeds across the region?

BITHOS: We’ve put a lot of effort into adaptive bit-rate streaming. We also have the ability to set, by country, different speeds for different [levels of] quality and different access platforms.

What we can deliver in the Thailand mobile market can be set differently from the quality or the bit rate we deliver in the Indonesian fixed-line market. We’ve built that into the platform, knowing that we’re going to go into a diverse set of environments across Asia.

TV ASIAPAC: Mobile has become the dominant screen in many Asian markets. Do you need to adjust your strategy to cater to mobile viewers compared to those watching on PCs or smartTV sets?

BITHOS: A user may not have access to the mobile network or internet connection at the time they want to see content. They might be in rural areas, they might be commuting, their data balance might be zero. In the Philippines, the typical mobile data customer will only access the internet on the mobile network five to seven times a month. Because of that, we have a feature where you can download five different movies in an offline mode and you can watch them when you want, where you want, and they’re encrypted on your device. We know that the network quality and the connection are hit or miss. So that’s an example of a feature innovation that was built for Asia.

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