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Fox Networks Group (FNG) has just had what could possibly go down in history as both its best and worst week in Asia.
Best because a content coup, pulled off by Chinese entertainment head Cora Yim, gives FNG exclusive global rights (outside of China) to next year’s mega mainland series – the epic "Ruyi’s Love in the Palace". The series, a sequel to "Empresses of the Palace", is expected to be THE Chinese drama series of 2017.
Worst because, despite clear efforts to keep the news under the radar until the last possible moment, word started spreading that Singapore cable platform, StarHub, would be dropping eight FNG channels in the next few weeks.
And, what’s more, hard-fought renewal negotiations for all the others are by no means settled (and hadn't been as of 17 June).
When it could be coaxed to issue a public statement, StarHub said dropping channels was “always the last resort”.
“Regrettably, when they do happen, it is usually due to pressing reasons which make carriage of the channels unsustainable, such as low viewership or prohibitive costs,” said Lee Soo Hui, StarHub’s head of media business unit.
FNG Singapore’s general manager, Fion Yeo, said the network was “doing our best to keep as many of our channels on air... we are currently in renewal negotiations with StarHub and while we cannot comment on the specifics of that discussion, we remain optimistic that an agreement will be reached”.
Are the two – fewer channels in Singapore and higher investment in Chinese content for global distribution – connected?
Sure, on some level everything is connected.
Industry leaders for the past few years have talked about an evolution that will see channels divided into two groups – high-end premium and cheap/cheerful/basic. Channels(some prefer to call them "blah" services)in the middle of bloated pay-TV packs will be squeezed out as the era of the skinny (some prefer to call them “core”) bundle takes hold.
The ultimate hope in this scenario is that subscribers will continue to pay for smaller packs of channels they either love/watch or feel they can't live without. Everything else will go.
Just how small will those packs be? Who knows. There are 1001 forces at play – including personalities and politics – that could impact the outcome here.
If this is, indeed, the start of the squeeze, it’s clear that FNG has no intention of giving up ground on the premium end of the sca...
Fox Networks Group (FNG) has just had what could possibly go down in history as both its best and worst week in Asia.
Best because a content coup, pulled off by Chinese entertainment head Cora Yim, gives FNG exclusive global rights (outside of China) to next year’s mega mainland series – the epic "Ruyi’s Love in the Palace". The series, a sequel to "Empresses of the Palace", is expected to be THE Chinese drama series of 2017.
Worst because, despite clear efforts to keep the news under the radar until the last possible moment, word started spreading that Singapore cable platform, StarHub, would be dropping eight FNG channels in the next few weeks.
And, what’s more, hard-fought renewal negotiations for all the others are by no means settled (and hadn't been as of 17 June).
When it could be coaxed to issue a public statement, StarHub said dropping channels was “always the last resort”.
“Regrettably, when they do happen, it is usually due to pressing reasons which make carriage of the channels unsustainable, such as low viewership or prohibitive costs,” said Lee Soo Hui, StarHub’s head of media business unit.
FNG Singapore’s general manager, Fion Yeo, said the network was “doing our best to keep as many of our channels on air... we are currently in renewal negotiations with StarHub and while we cannot comment on the specifics of that discussion, we remain optimistic that an agreement will be reached”.
Are the two – fewer channels in Singapore and higher investment in Chinese content for global distribution – connected?
Sure, on some level everything is connected.
Industry leaders for the past few years have talked about an evolution that will see channels divided into two groups – high-end premium and cheap/cheerful/basic. Channels(some prefer to call them "blah" services)in the middle of bloated pay-TV packs will be squeezed out as the era of the skinny (some prefer to call them “core”) bundle takes hold.
The ultimate hope in this scenario is that subscribers will continue to pay for smaller packs of channels they either love/watch or feel they can't live without. Everything else will go.
Just how small will those packs be? Who knows. There are 1001 forces at play – including personalities and politics – that could impact the outcome here.
If this is, indeed, the start of the squeeze, it’s clear that FNG has no intention of giving up ground on the premium end of the scale by dropping the ball on content investment for its flagship services, such as Star Chinese Channel and, of course, the sports packs.
Financials for the "Ruyi" acquisition have not been disclosed, but rights are likely to have run into the many, many, many millions. Many.
The show, starring Zhou Xun and Wallace Huo, could run to about 90 episodes.Speculation is that mainland OTT rights alone may have reached RMB9 million/US$1.4 million per episode.Revenues so far out of China are rumoured to have topped US$200 million.
"Ruyi" may be Yim's most sparkly new thing, but it's by no means her only shiny project.
Among other original content investments, FNG is involved in a remake of "My Date with a Vampire" (2017) as part of a broad production/co-production initiative that involves films, drama and TV series with both Chinese and Korean angles.
Yim says her goal includes producing high-concept mini series with U.S. studio-equivalent production values.
As important for the broader industry beyond FNG is that StarHub is believed to be cleaning house for new services, including, possibly, a reorg and bump up of its HD offering.StarHub has been talking to programmers about winding down some channels since the end of 2015.
Details of other changes have not yet been disclosed.
The six FNG channels going dark from 16 June are Nat Geo Music, Channel V, Channel V Mainland China, Channel V Taiwan, National Geographic Channel HD (the SD version remains) and Mandarin entertainment channel Xing Kong.
Another two FNG-distributed channels – BabyTV and Hindi service Life Ok – will follow out the door on 30 June.
StarHub’s decision is part of a broad re-negotiation of carriage agreements that has taken place in other Southeast Asian markets, such as Malaysia, Indonesia and Thailand.
In Thailand, all eyes are on CTH (the former Cable Thai Holdings) as it cuts excess satellite capacity and tries to makes sense of a complicated tangle of channels and delivery systems both inherited and acquired through the Grammy merger.
In Indonesia, the MNC Group’s Indovision slashed an entire satellite transponder, leaving a dozen or so channels scrambling for a new home. Terms for many of the other channels were renegotiated.
Meanwhile, big-brand channels are being watched closely, less for how they die (it doesn't look like anyone is expecting these powerful programmers to disappear) than for how they retool to live – and thrive – another day.
FNG tops the list along with Discovery, which came under fire in the U.S. earlier this month for having "strayed" from its brand and, with 14 networks, is being accused of being too bulky for the dawning age of skinny, according to Sanford Bernstein analyst, Todd Juenger.
Whatever the industry doesn't agree on, there is consensus on the power of content and its ability to draw audiences. At this year's L.A. Screenings, U.S. studio TV bosses pointed out constantly the rise in video consumption and the might of great stories well told.
For FNG’s Chinese group, the increased investment in Chinese content for distribution outside China coincides with massive investment in original content creation by China’s online platforms, including iQiyi and Youku Tudou.
Korea continues to be the other significant content force, with KBS series "Descendants of the Sun" being cited as the perfect example of content distribution harmony between China and Korea.
The "Descendants" success is pushing the industry into new habits, such as delivering the complete series well ahead of time to accommodate Chinese censorship regulations and still ensure a simultaneous release.
The big question in Asia now is who has the balls to 'fess up to – and kill – wishy-washy marginal channels, launched in a different and less-connected pay-TV world, that have by now passed their sell-by dates?
This great reckoning could take 12-24 months. Will everyone like the aftermath? Will they have a choice?
Published on 13 June 2016. Edited on 17 June 2016.