Something (anything) digital is a must-have for media companies and the boom in streaming platforms across Asia continues. The online story is sexy and shiny and compelling, with a big data/transparency/ engagement story to die for and an unprecedented focus on user experience. The reality? Only shiny in patches right now. Infrastructure, connectivity and payment issues across Asia mean SVOD services are beating a path to the doors of telcos and broadband providers and their billing relationships with large groups of consumers. Big-data collection is a key trend, although who gets to own/see/use the data in the pay-TV space is still a thorny issue. Apart from China’s U.S. acquisition spree, one ofthe most significant trends going into 2017 is the race – particularly in Korea – to co-develop IP in Asia for global distribution. Those are a few of the top-of-mind issues across Asia’s video industry for 2017. Here’s what else...

across the region...

Local programming – unsurprisingly – continues to command the biggest audiences across traditional platforms in domestic markets across Asia. Online (and not necessarily legal) demand is another story. As Parrot Analytics demand ratings show, a few Japanese manga titles – Naruto: Shippuden, One Piece and Tokyo Ghoul, for instance – and Korea’s Run- ning Man fly the flag for Asian content on lists dominated by U.S. series such as The Walking Dead, Game of Thrones, Westworld and Marvel’s Luke Cage.

We have 10 regional streaming platforms on our radar (November 2016) going into 2017 – Amazon Prime Video (rumoured to be rolling out in December 2016); Taiwan’s Catchplay, which offers a mix of local, regional, Hollywood and other international movies; Singtel/Sony Pictures Television/Warner joint venture HOOQ; kids platform Hopster; emerging markets SVOD service iflix, which is expected to start talking about its first originals in 2017; global streamer Netflix, which has a growing slate of originals out of Asia; Tribe from Malaysia’s Astro, which so far has secured a presence only in Indonesia; Rakuten-owned platform Viki, which has a robust Asian offering, including 1,000 hours of Chinese programming from Huace; Hong Kong telco PCCW’s Viu, with a rich offering of Korean and other Asian drama; and YuppTV, which targets the Indian diaspora and is backed by Asian investment company Emerald Media.

Traditional free-TV linear viewing is also not as dead as old predictionswould have had it. As Fetch TV’s data based on all box activity shows in Australia, traditional linear viewing is still alive and well and figuring out how to continue to make it so. Anecdotal evidence in most other markets in Asia is that free-TV viewing is robust and free-TV broadcasters continue to roll out services to reflect multi-screen audience habits.

Regional multi-channel programmers move into 2017 either committed or coasting. The committed have stepped up efforts to deepen engagement with local markets, with higher investment in specific markets, such as Korea and India, and a dogged determination to shorten licensing windows to as close as possible to the original release. In a challenged subscription environment, all have taken a long hard look at their schedules and what audiences they serve and are sharpening their messaging to justify their place on the dial. The coasting are in neutral, with a steady hand but with not much hype and as low spend as they can get away with.

At the same time, traditional platforms with legacy infrastructure and stuck-in-the-past cultures are struggling to keep up with the tech magic, user interfaces and commitment to customer service that drives emerging digital players. The indie SVOD services have problems of their own, to be sure, but data, analytics and a customer-centric approach are not among them.

Some of the big excitement for 2017 is what Asia’s big entertainment brands, like Disney, FOX Networks Group and Turner, do with streaming/OTT... and how this might (or not) change the relationship dynamics and maybe even the entire subscription ecosystem.

For now it looks like they will – as they have in the past with their on-demand play or watch services – prioritise existing distribution partners in each market. Will this last? Maybe, but the balance of power is changing and if traditional operators don’t get their user experience act together, then probably not. Or at least it might but in a very different form. Channel brands and content rights owners are not hell-bent on the go-it-alone route, and are unlikely to go there unless it becomes the better option. As Media Partners Asia’s (MPA) consumer research shows, life as a standalone OTT platform in Asia is not a proverbial bed of roses.

On the high-end production side, the old dream of trying to please everyone (and ending up pleasing no one) with catch-all story lines and too many cooks in the kitchen are all but dead. In its place is a new focus on great stories. Full stop.

The poster programmer for this is HBO Asia, where CEO Jonathan Spink has green lit (as of mid-2016) two Chinese martial arts movies – Master of the Drunken Fist: Beggar So premieres on 25 December and Master of the Shadowless Kick: Wong Kei-Ying debuts the next day – as part of an originals slate that also includes a second season of Halfworlds and The Psychic, a co-production with Taiwan’s Public Service Television and Sin- gapore’s Infocus Asia. Spink has said that additional Chinese originals are part of the plan.

All this goes towards rising spend on original content in Asia. IHS Technology’s World TV Production Report 2016 estimates TV programme spend in Asia Pacific in 2015 was US$28 billion, led by China and Japan with a combined US$18.2 billion. Most of the spend was on original programming. The Asia-Pacific region is third behind North America (US$47 billion, with US$43 billion from the U.S., excluding Netflix and Amazon) and Western Europe (US$39 billion). Worldwide spend was US$129.8 billion.

china

For all the billions going into China media, local platforms reign breathtakingly supreme, foreign channel distribution remains choked, and the syndication/licensing business races forward and comes to a screeching halt in turns.

Will this change in 2017? Unlikely, although who knows what might happen if the new U.S. president picks a fight with China over trade, as he promised to do in his campaign.

The other political flashpoint looming over China as 2017 rolls around is tension with Korea over Korea’s intention to deploy the U.S.-developed THAAD missile defence shield. The spectre of an official China ban on Korean content hit headlines in both countries in mid-2016, sparking fears that the Korean entertainment industry’s expensive involvement in mainland China was about to come crashing down. In November, when rumour spread that the unofficial ban was about to become a government-backed order, hopes were that Korean projects already cleared would be allowed to go ahead as planned.

Meanwhile, co-development between local Chinese entities and foreign media brands (the jury is out on whether U.S. or Korean companies will continue to be among them in 2017) will continue to rise, and the prevailing sentiment on syndication within China is take whatever money you can get today because who knows that the regulatory environment will look like tomorrow.

For now, this is a market able to pay upwards of US$400,000 – some say up to a million – for one episode of Korean drama, putting the total cost of a 16-episode series at US$6.4 million. Yes, there’s some grumbling about unsustainability, but, for the top shows, it’s falling on deaf ears.

IHS Technology’s World TV Production Report 2016 estimates China’sinvestment in programming in 2015 at US$8.4 billion, making it the second largest market in Asia Pacific behind Japan, which leads at US$9.8 billion.

As was the situation a year ago, powerful streaming platforms – including Alibaba and its Tmall Box SVOD service, Youku Tudou, Tencent Video, Baidu/iQiyi, PPTV and Sohu, plus the Shanghai Media Group’s BesTV – continue to provide unprecedented opportunity for regional/international rights owners (including formats) in China. Rising stars include Bilibili, a factual platform targetting millennial audiences.

Going into 2016, China stood out as the only country in Asia (other than North Korea) that U.S. streaming service Netflix chose not to include in its global roll out. Why? Because, even as bold and bolshy as Netflix is, it didn’t dare go there without more ducks in a row than it had. And, a year later, still has. As we went to print, Facebook was looking at possible ways to hold its nose and swallow China’s news blocking and censorship requirements in order to be allowed to enter this massive market. That’s one to watch in 2017.

There’s no indication at all that mainland media authorities are easing up on content requirements. On the contrary, all things point to an ongoing determination to promote ‘healthy and orderly’ development.

Meanwhile, the crazy continues online in China and the ability of Chinese entrepreneurs, led by Dalian Wanda’s Wang Jianlin and Alibaba’s Jack Ma, to buy up Hollywood seems endless. As with everything else, anything could happen under a Donald Trump presidency. Even before the results of the November election, eyebrows were being raised at China’s heavy investment in U.S. entertainment and the impact this could have on domestic media and culture. Wang’s response to the concerns was simple: it’s business, not politics. So let’s see.

hong kong

Hong Kong’s dominant free-TV broadcaster, Television Broadcasts Ltd (TVB), celebrates its big 5-0 in November 2017, hopefully with 1.4 million users on its streaming platform myTV Super at home, global streaming ambitions, and a clear eye on boosting its film and television production businesses in China and everywhere.

The birthday celebrations go on without the one constant in Hong Kong since TVB went on air – rival free-TV broadcaster Asia Television Ltd (ATV). In April 2016, the ailing station went off air after almost six decades, ending years of management, political and financial strife, struggle and drama. Is ATV missed? Maybe in some quarters, but the waters have closed on top of that particular wreck and in its characteristic fashion, the territory has moved on. Swiftly.

Even if it wanted to, TVB doesn’t have time to mourn ATV, with potential new rivals everywhere, a domestic advertising market under pressure, and declining revenue in first half 2016 from international markets such as Malaysia/Singapore, U.S./Canada and Australia. TVB bosses have called 2016 “challenging”, with adverse affects from tighter ad spend, widespread piracy, and “fierce competition from online entertainment alternatives as a result of globalisation”.

New free-TV channels include the English-language ViuTVsix, scheduled to launch at the end of March 2017 with a factual-focused line up. ViuTVsix is the second of PCCW/now TV’s two free-TV channels. The first, Chinese channel ViuTV, debuted in early 2016, kicking off a new era in Hong Kong commercial broadcasting dominated for decades by TVB and ATV.

Antennae are also up for the new free-TV channels from i-Cable’s Fantastic Television. The Cantonese channel is scheduled to be up by May 2017 at the latest.

Veteran Chinese broadcaster, Phoenix Satellite Television, has also put its hand up for a domestic free-TV license, submitting a US$300-million bid in 2016 for two channels – a Cantonese general entertainment channel and an English-language service focusing on factual, arts and cultural content. The license application commits spend of about US$80 millionon programming for the two new services. The next few years will see mega investment in local and acquiredcontent as the two new free-TV players ramp up. PCCW has pledged US$78 million for programming/production in the first three years and an additional US$90 million in the next three years. i-Cable will invest US$129 million in the first six years.

That’s not all. PCCW continues to strengthen its influence in the original content sphere, with, among others, investments such as the equity stake in U.S.-based STX Entertainment announced in August 2016. At the time, PCCW Media Group managing director Janice Lee said the new alliance represented “an important milestone in expanding PCCW’s strategic investments into compelling content creation, not only for audiences in Hong Kong, but also for international audiences in markets in which we operate”.

TVB, already among the world’s largest Chinese drama producers, is riding feature film growth, taking a stake of just under 30% in Hong Kong-listed Shaw Bros Holdings, jointly held by China Media Capital (CMC) and TVB, and a 5% interest in Flagship Entertainment Group, a film investment platform jointly formed by Warner Bros, CMC and TVB.

As 2016 wraps, Hong Kong has four super-streamers – PCCW’s Viu, which launched at end 2015; TVB’s myTV Super, which rolled out in April 2016 as the new incarnation of TVB’s previous online efforts and says it is on track to achieve 1.4 million users by November 2017; LeEco, which is part of an outsize global plan driven from mainland China; and Netflix, which celebrates its first birthday in Hong Kong and most of the region in January 2017. At press time, Amazon’s plans for Hong Kong weren’t clear, although a December 2016 roll out was widely rumoured.

One of the bigger question marks as 2016 comes to a close is who will buy i-Cable, one of Asia’s oldest pay-TV platforms. i-Cable Communications and holding company Wharf Holdings said in early November that they were still assessing proposals from “various independent third parties”. By 25 November, still no word on this particular end of an era.

india

India’s video environment could be set for major change from 2017 in the wake of the mega-merger between Indian platforms Videocon d2h and Dish TV. If it goes through as proposed, the deal, which both companies are presenting as a “strategic combination”, will close in the second half of 2017.

The merger/combination/alliance could be followed by similar mergers/combinations/alliances as India’s pay-TV behemoths slug it out for the eyes and wallets of the country’s 175 million television households.

“The deal is a major catalyst for more consolidation in pay-TV distribution,” says Media Partners Asia (MPA), adding that a potential merger between Tata Sky and Airtel Digital in the coming years cannot be ruled out. “Over time, as the Dish TV Videocon Limited (DVL) merger gets digested, the potential to bring Big TV and Sun Direct into the DVL umbrella, may become an important consideration,” MPA says.

The new entity will serve 27.6 million net subscribers in India (as of 30 September) or 40% of the national DTH market. MPA says the near-term synergies will be “modest”, and expects the two brands to be run separately for at least 18 months.

What does this mean for channels and content providers? Not much while the current carriage contracts of between two and three years run their course. MPA says immediate benefits are more likely to be felt on the hardware/tech side of the business.

Dish TV currently carries almost 600 channels, including 55 HD servicesand 22 audio channels. Videocon d2h also offers almost 600 channels/services, including a 4K UHD channel.

The merger comes against the country’s new regulations, including the TRAI tariff order and interconnect rules. MPA says these “will recalibrate business economics for all industry stakeholders”.

Meanwhile, India’s streaming/OTT slugfest continues, with 18 platforms that we could count, putting the country in top spot in Asia by sheer numbers. These include Amazon, which is in the midst of a high-energy local content acquisition play ahead of its December 2017 launch.

Long-term exclusive streaming deals have been signed with Tamil Nadu’s V Creations, Vishesh Films, T-Series and Dharma Productions. The SVOD releases are being promised “within a few weeks” of theatrical and ahead of any other television window.

India’s content creation environment is a mixed bag, with original TV production kept high and rising by fierce competition and demand for local stories. On the other hand, the best the film industry is being called right now is “broken”, although insiders say balance (as in everyone makes money not just a tier of over-paid stars) will be restored. Eventually.

Meanwhile, the country’s long-running angst over the inevitable digital migration continues. As we went to press, the Indian Broadcasting Federation (IBF) was demanding the government grant “infrastructure status” for the broadcast and content distribution sector “to realise the mission of total digitisation in the country”. To be continued in 2017.

korea

An oft-repeated line through much of 2016 was that there were more Korean producers in China than in Korea. That slowed with the political freeze between the two countries over new missile defence system THAAD, but it highlighted Korea’s eagerness to maximise mainland Chinese audiences’ taste for Korea’s brand of entertainment. And its willingness to adjust the entire production process (including fast-track delivery) to comply with China’s regulatory requirements.

The fallout over THAAD escalated at the end of November; at press-time, talk was of an imminent official ban on Korean entertainment. Korea’s content industry, aware of their perhaps-unhealthy reliance on China, have already started looking for opportunities elsewhere. The domestic business in 2017 will be marked by the hunt for new markets to balance out over-reliance on China.

International content brands are also adjusting their tactics in Korea, realising the challenges involved in distributing finished foreign content in a market where demand is overwhelmingly local or for U.S. blockbusters.

Korea was the third largest programming market in Asia Pacific in 2015 behind Japan and China. Korea’s programme investment hit US$2.6 billion, according to IHS Technology’s World TV Production Report 2016. China invested US$8.4 billion and Japan US$9.8 billion.

Conglomerate CJ E&M, which operates a vast media empire including production and cable channels, leads the country’s media industry efforts to expand its international footprint across media sectors.

This comes on the back of the success such as Grandpa Over Flowers, remade for NBC in the U.S. as Better Late Than Never, as well as a drama production deal with the Warner Bros-owned streaming platform DramaFever for online originals. CJ also has a production relationship with mainland China’s Huace Media, and plans to ramp up drama co-production in Thailand, Vietnam and Indonesia. In addition, the company said in Oct 2016 that it would be taking its domestic streaming platform “tving” global, with rollouts by region through Q4 2016 and Q1 2017.

A significant trend going into 2017 is co-development across genres and borders, from drama such as Scarlet Heart (NBCUniversal & YG Entertainment) and The Society Game, a reality show developed by Endemol Shine Group/CJ E&M. NBCUniversal has partnered with free-TV broadcaster MBC to co-develop/produce original formats for Korean and internationalaudiences; no details were given but it’s one to watch for 2017. In addition to shiny new co-development ambitions, Korea is at the forefront of Hollywood studio and Latin drama adaptations in Asia. In 2016, this was led by CBS Studios’ The Good Wife (16 episodes ran in July/August 2016) and a 16-part version of HBO’s caustic comedy Entourage. Produced by CJ E&M affiliated production house Studio Dragon, Entourage Korea premiered on CJ E&M’s tvN cable channel in Korea in November 2016 with an express window on the increasingly aggressive regional tvN channel, which is competing fiercely with two regional incumbents – Sony Pictures Television Networks’ ONE and Turner’s Oh!K. Coming up are Korean remakes of three drama miniseries from Brazil’s Globo. The three are Part of Me, Happily Ever After? and Merciless. All have been commissioned by EPG Korea; production and broadcast details have not been confirmed. While formats have generally been a tough sell, Korea has proved to be a lucrative landing spot for big-brand formats such asMasterChef. Season four aired in the first half of 2016 on CJ E&M’s Olive TV. Meanwhile, Korea’s drama producers/broadcasters continue to be the darlings of the rest of Asia’s entertainment world even though rightsfees aren’t anywhere near those in China. High on the watchlist going into 2017 is A+E Networks’ rumoured US$15-million investment in content co-development as well as a stake in Korean production/distribution company iHQ. No word at presstime.

We also have an eye out for whether (or not) major rights holders will unite behind Hong Kong telco PCCW’s Viu for renewals the way they did in 2015 in the run-up to the streaming platform’s launch... and at what cost. Two years ago, the deal with Korea’s major broadcasters was said to be the biggest-of-its-kind regional syndication negotiation ever, giving Viu streaming/download rights (including some valuable first-run/day-and-date rights) to blockbuster prime-time drama titles.

Netflix has also started amplifying efforts in Korea, adding nuclear disaster blockbuster Pandora to its global slate in 2017 in a licensing deal (excluding Korea) with Next Entertainment World. Amazon Prime Video is unlikely to exclude Korea from the global rollout expected from December 2016. The new opportunities are unlikely to make up for the hit from a China ban. How will producers and rights holders respond? That’s another one on our 2017 watch list.

singapore

Singapore biggest news this year is the new regulatory structure created by the merger of the country’s old media and info-tech authorities – the Media Development Authority and the Info-comms Development Authority. The new mega-authority, the Info-communications Media Devel- opment Authority of Singapore (IMDA), launched in October 2016.

What difference will it make? For one, a holistic approach to all things digital, which can’t be a bad thing.

The other big news is the greenlight to uncensored online content, passing power/responsibility for viewing choices from the regulator to the consumer for the first time. It’s still a bit of a sore point among regular broadcast channel programmers, who have to comply with content codes. But they’re always free to install PIN access and parental controls and issue ratings classifications, none of which streaming platforms – including Netflix and Amazon Prime Video – have a problem with.

A force that will – hopefully – make a major difference to the domestic media environment in 2017 is the new government-backed SG-TAM integrated, multi-platform audience measurement system. The first results were released in 2016, but insiders say levels of satisfaction with what the system was spitting out were, to say the least, varied. Ideally, all broadcasters, producers and advertisers will for the first time, have access to audience consumption data across all media platforms – free-to-air TV, pay-TV channels, OTT streaming, online and mobile channels. If it works as planned, it will be a hallelujah moment.

Singapore’s creative environment is heavily supported by the country’s media authorities, and many operators – and startups in particular – are grateful for the lifeline.

Initiatives going into 2017 include the new Singapore Film Channel on online platform Viddsee. The channel, launched at the end of November 2016, curates up to 30 short films from up-and-coming as well as established filmmakers in Singapore.

Against the looming prospect of another telco licence in Singapore, the country’s two leading players – Singtel and StarHub – are reworking channel packages, pruning services they don’t think work for them any- more and adding new brands they think will.

Meanwhile, both are happily playing whoopee with OTT/streaming services such as Viu by Hong Kong telco PCCW, Netflix, HOOQ, and maybe even Amazon (which had not launched officially at presstime although the service was available). We also have on our radar Cast, an aggregator app from Singtel, and Toggle, the OTT platform from government-backed monopoly broadcaster Mediacorp.

For all the excitement, churn on streaming platforms is close to three times that of the existing pay-TV operators and most people think the streaming subscriptions are too expensive, according to Media Partners Asia’s (MPA) new consumer research.

Nielsen’s 2016 Media Index Report, released in November 2016, shows 85.5% of viewers in Singapore tune into Mediacorp’s free-to-air television channels on an average weekly basis (July 2015-June 2016). Chinese-language Channel 8 maintains the highest weekly reach at 56.7% among free-to-air channels. Less than half of the country’s viewers – 44.2% – tune into English-language free-TV service, Channel 5, every week, dropping to three in 10 for news service Channel NewsAsia. Toggle, Mediacorp’s online platform, reaches less than 10% of Singapore adults every week, Nielsen says. Pay-TV has a weekly viewership of 51.7%.

Pirate boxes continue to be rife, and the industry continues moaning that not enough is being done to crack down on distributors of boxes that enable unauthorised access to content. “It’s not even in back alleys... it’s right there is big malls,” one programmer said.

As it was going into 2016, Singapore platforms are throwing as much as they can onto the digital wall and seeing what sticks. And why not?

For now, Singapore’s existing subscription environment is sliding and ex- pectations are that the market will end 2016 with up to 50,000 fewer pay-TV subscribers less than they had this time last year. Between them, the two major players – Singtel and StarHub – had a combined 919,000 TV subscribers at the end of September 2016, down from 965,000 in Sept 2015.

“The churn is real and pay-TV ARPUs are not growing,” says MPA vice president, Aravind Venugopal.

Can the trend set across 2016 be reversed? Answers in 2017. Who knows. Maybe.

Full stream ahead

The age of “either/or” is dead. Long live the era of “have it all”, a truly whenever, wherever video scene including linear, on-demand, multi-device, online/offline, complete seasons and new releases, dubbed/ subtitled/localised, with space for everyone, a range of payment op- tions that give viewers access options that suit every situation, and a universal declaration of war on the buffering Wheel of Death.

If that was our theory going in, the research for our new online/OTT video report, published in November 2016, and for our new directory, The Big List 2017, showed a good number platforms really truly taking their action to their consumers wherever they are, and revelling in data and the knowledge that viewers don’t actually care about the tech, but they do care about having whatever they want when they want it, quickly and easily.

Okay, there is still some hope posing as strategy, delusion in place of execution, pathetic where customer service should be, and problems for every solution. Those players will probably die. Others will rise up and take their place. We haven’t ranked (at least not in print) the 117 platforms on our radar by where we think they are on the scale, but it’s obvious a lot is being done and long may it last.

Regional players are only included in our latest count where they have customised services for specific markets. This takes platforms suchas Viki and Hopster – and indeed Amazon, which at press time had only rolled out in Japan – off our table for now.

Included in our country lists are platforms such as CatchPlay in Taiwan and Singapore; HOOQ in the Philippines, Thailand, India, Indonesia and Singapore; iflix in Malaysia, Philippines, Thailand and Indonesia; Netflix everywhere, except China; Astro’s Tribe in Indonesia; Viu in Hong Kong, Singapore, Malaysia, India, Indonesia and Thailand (launching early 2017); and YuppTV, which has customised its global platform for India.

The most powerful streaming platforms are domestic giants in China, where billions of dollars and views characterises the country’s online environment, and where online platforms are known to fight hard for the privilege of paying million of dollars for rights to one Korean drama series. The platforms we looked at in China are BesTV, Bilibili, China Blue TV, iQiyi, LeEco, Mango TV, PPTV, Sohu Video, T-Mall Box Office, Tencent Video, Wasu, YOU On Demand and Youku Tudou.

In number of platforms, India reigns supreme, with 18. Japan follows with 15. Singapore, a miniscule market with 1.2 households, has 12, including Spuul, which calls Singapore home but is actually a regional service targetting South Asian audiences. And that’s not including Amazon, which had not at press time said what it has planned for Singapore. If Amazon starts playing local in Singapore, that will make 13. Lucky. Or not.

Published on ContentAsia's Issue Six 2016