Korean/Asian streaming platform DramaFever just became roadkill in AT&T and its newly minted WarnerMedia’s grand plan to build a SVOD platform, anchored by HBO, scheduled to debut at the end of 2019. Another merger casualty is Turner Media’s short-form platform, Super Deluxe Studio, victim of duplication in the new portfolio.

As AT&T/WarnerMedia continue to wade through products and services, the obvious next question for Asia – and the one we’re watching most closely – is what happens to Warner Bros Entertainment’s investment in Singapore-based streaming platform Hooq, which it owns with telco Singtel and Sony Pictures Television. The JV was established in January 2015. The platform now has a presence in the Philippines, Thailand, India, Indonesia and Singapore.

Right now, the only answer to that question is that no one knows for sure. Singtel/Hooq’s official response is that Warner reviews each of its investments separately and that the U.S.-based behemoth is still very much on board with Hooq. Outside of that, rumours abound about a freeze on further investment in the platform by both Warner and Sony.

DramaFever’s sudden death on 16 October after nine-years came as a huge surprise to fans, some of whom had been charged their monthly subscriptions only days before. Many took to rival Rakuten Viki’s online message boards venting about the drama-pocalypse. “I was in the middle of an episode when that message popped up. I am soooo pissed!,” one said. “I’m crying,” another added.

The shock announcement came six months after Warner Bros Entertainment named co-founders, brothers Suk Park and Hyun Park, co-heads of production and acquisitions for Korean drama TV series. The third founder, Seung Bak, exited in March this year, a month before the announcement. For a while there, it looked like the company was committed to Korean content. In their broadened roles, the Park brothers were responsible for acquiring and producing TV content for the Korean market, as well as licensing Korean formats for the U.S. and importing select Warner Bros Television formats, such as The Mentalist, into Korea.

That, clearly, was not to be. By the time the decision to axe the brand was made, few in the industry were surprised, especially not since AT&T flagged its priorities on 10 October with the announcement of its coming-soon subscription OTT platform funded by, among other sources, “consolidating resources from sub-scale D2C efforts”.

Warner Bros Digital Networks, which operated DramaFever, said the decision to pull the plug was driven by business reasons (it didn’t say what these were), and the changing marketplace for K-drama content.

It’s true that the cost of acquiring K-drama rights has soared. Netflix, for instance, is said to have paid US$30 million for global rights (outside of Korea) for Studio Dragon’s 24-episode Mr Sunshine; so US$1.25 million per episode. But that’s Netflix, which has skewed the market with its outsize purse. Outside of Netflix, Korean drama commands anywhere from US$8,000 to US$15,000+ per episode depending on the talent attached, and Korean rights holders have not been shy to milk every advantage.

Not all of DramaFever was equally unwanted. WarnerMedia ditched only the content and the brand along with about 20% of the team involved in programming. The rest of the staffers are staying on to support the tech platform, which it seems AT&T/WarnerMedia like a whole lot more than Beauty Inside, Scarlet Heart and Nirvana in Fire or anything else DramaFever programmers picked up or made.

Those most likely to benefit from DramaFever’s exit are Asian-focused streaming platforms – Rakuten’s Viki platform and KCP’s Kocowa (Korean Content Wave) platform, which launched in the U.S. in the middle of last year backed by Korea’s big three broadcasters, MBC, KBS and SBS.

Both have a much broader selection of Korean and Asian titles than Netflix. Viki’s free-tier titles include Kill Me Heal Me (Korea, 2015), My Unfortunate Boyfriend (MBC Korea, 2015) and All Out of Love (Hunan TV, China, 2018). Kocowa’s line up includes Bad Papa, Happy Together, The Ghost Detective and Jang Geum, Oh My Grandma, all streaming only hours after their Korean debut.

All factors combined, DramaFever was operating in a more crowded environment, with higher costs, estimates of fewer than 500,000 subscribers paying US$4.99 a month, and, it seems, an inability to scale. As one industry observer says: “DramaFever may have been successful. But it was just too small for AT&T”.

Published on ContentAsia's Issue Six 2018, 29 October 2018