10 Jan 2019
Asian Content Goes Global While Pay TV Seeks Out New Business Model
With Asia-sourced video content suddenly surging and winning over English-language viewers, the only cloud on the horizon at the Asia Television Forum was the fact that young audiences are proving highly averse to subscription fees.
If one issue dominated proceedings at the recent Asia Television Forum and Market (ATF), it was the global explosion of interest in Asia-sourced content. While many at the annual Singapore-hosted event – which bills itself as "Asia's entertainment content market" – saw this as a sign of the region's growing cultural and economic significance, others saw it as more as one of the collateral benefits stemming from the huge expansion in viewing options.
Seeing it as something of a combination of the two, particularly in the pay-TV sphere, Jonathan Spink, Chief Executive of HBO Asia, the Singapore- headquartered subsidiary of the US premium cable and satellite network, said: "The sheer volume of viewer choices has had a big effect on traditional pay TV. This is not just in terms of the amount of available content, but also with regard to the number of ways viewers can access that content, including the many new free options.
"At the same time, companies such as ourselves have realised the importance of creating bespoke content for the Asian market. Thankfully, with English-speaking audiences now far more open to viewing subtitled programming from around the world, the potential market for such content has grown considerably."
Looking more at the way traditional pay TV models are being undermined by changing viewer preferences, Curt Marvis, Chief Executive of QYOU Media, a Los Angeles-based online broadcaster, said: "While we're watching more TV than ever before, we're just not watching it on TV screens – and this is particularly true of millennials and Gen Z.
"Every day, for instance, a billion hours of YouTube is being watched, with the amount of time people spend viewing this free channel having doubled compared with last year. With this in mind, we estimate that by 2025, half of all viewers under 32 will not have a pay TV subscription."
Arguing that these changed viewing patterns will require a drastic rethink on the part of commercial content distributors, he said: "Today's young viewers do not like ads, so advertisers need to move away from the pre-roll / post-roll mindset and towards embedded advertising and product placement. Providers should also consider bundling packages from a choice of channels and offering a range of prepaid options or micro payments.
"They should also look to offer a full-screen experience on every screen. Additionally, content length should no longer be restricted to the traditional half-hour and one-hour formats, with greater consideration given to the provision of premium short-form programming."
As well as focusing on areas of global interest, this year's event also previewed the content likely to be wowing viewers throughout 2019, while also looking to showcase some of the idiosyncrasies of a number of Asia's most vibrant markets. While the sessions dedicated to India and Turkey were both well-attended, it was the Philippines seminar that attracted the highest level of footfall.
Speaking as part of the panel, Carlo Katigbak, Chief Executive of ABS-CBN, the Quezon City-headquartered media and entertainment group, sought to outline the two key strengths of the local market, saying: "Firstly, there is our strong economic growth, which has never fallen below 6% per annum in the past three years. Then, there is the fact that we are home to a largely English-speaking market of more than 100 million people.
"It should also be borne in mind that the Philippines is pretty much the world's social media capital. Thankfully, though, we have found that platforms such as YouTube are actually complimentary rather than competitive – ABS-CBN is now one of YouTube's top 25 content suppliers, while YouTube has been a substantial source of eyeballs and revenue for ABS-CBN for some time now."
Turning to forthcoming content, among the shows singled out as likely star performers was The Masked Singer, a Korean entertainment show that made its US debut in January this year. Fuji TV's Little Presenter (a comedy current affairs series that shows the world through the eyes of children), meanwhile, has been picked up by Freemantle, while China's The Nation's Greatest Treasures, a cultural documentary series that attracted 800 million domestic viewers, was picked up by Endemol. Significantly, a number of the leading streaming services, including HOOQ, iflix and Viu, have produced a raft of content destined for pan-regional consumption, with the latter committed to co-producing The Bridge, a Singaporean-Malaysian adaption of a Danish-Swedish police drama, with HBO Asia.
For its part, Netflix has commissioned 17 original productions from Asia, with deals in place with producers in India, Japan, Taiwan, Thailand and South Korea. Outlining the streaming giant's strategy within the region, Chief Content Officer Ted Sarandos said: "Asia is home to many of the world's great creative centres and produces some of the most compelling films and series currently available. Tellingly, more than half the Asian content hours viewed on Netflix in the past year were viewed from outside the region. In light of that, we are hugely confident that these new shows will find fans across the world – except, maybe, in China.
"In truth, we don't have much of a China strategy, but we also don't have any real exposure in China. We've found that you can really spin your wheels trying to sell programming into China and then, for no apparent reason, the show gets banned."
Despite the well-known difficulties of selling into China – many relating to the official government quotas restricting the amount of foreign content that can be accessed by mainland viewers – the sheer size of its market makes it impossible to ignore. In 2017, China overtook the UK and became the second largest-spending TV market in the world, according to figures released by IHS Markit, the London-headquartered market-research group. Its data showed that TV programming expenditure in China, (including the spend of the online platforms) totalled US$10.9 billion in 2017. Although impressive, this is still just over a sixth of the total $58.3 billion spend recorded for the US over the same period.
Outlining the factors driving China's increased spend, Kia Ling Teoh, a Senior Research Analyst with IHS Markit, said: "The growth in China's TV programming spend is largely down to aggressive content investment on the part of many online companies – notably Baidu, Alibaba and Tencent – as they look to bolster their respective video platforms, iQiyi, Youku Tudou and Tencent Video."
While many were keen to outline the current realities of the Asian content market, it was left to Andy Kaplan, Non-Executive Chairman of QYOU India, to provide a glimpse of the future. Maintaining that many of the current crop of operators may not make the cut, he said: "The highly competitive nature of the global media landscape right now makes it not so much a game of chess as a game of Risk. At the moment, very few companies, except Netflix, Amazon and YouTube, can deliver truly global instantaneous distribution at the flick of a switch. While many other media companies also claim to operate globally, they actually operate in different countries on an individual basis.
"There is also the danger that too much content is now being produced. As a result, we are already starting to see some companies pulling out of content creation. At the same time, many operators are also hitting a wall when it comes to growing their subscriber base, forcing them to try to find new ways to generate profits. Over the next five years, I predict that we will witness a war of attrition across the industry, a war that only the very strong have a chance of surviving."
The 2018 Asia Television Forum and Market took place from 4-7 December at the Marina Bay Sands Convention Centre in Singapore. The expo attracted 5,600 delegates from 58 countries with some $313 million worth of deals said to have been closed over the course of the four-day event.
Ronald Hee, Special Correspondent, Singapore