Tuesday, January 10, 2012

Viacom International Talks About Their Asian Plans

From C21Media:
Asia specific

The Asian pay-TV market is fast coming of age, and local adaptations of unscripted formats look set to play a key role. Andrew McDonald reports.

Improvements in technology and infrastructure and a growing middle class have seen the pay-TV market rise rapidly across Asia in recent years. In October, regional pay-TV body Casbaa said multi-channel TV distribution had grown 12% in the past year, and that there are now more than 420 million non-terrestrial TV connections in the Asia-Pacific region. This is more than in the rest of the world combined, according to researcher SNL Kagan.

This boom has produced growth in channel numbers and new opportunities for content owners – both locally and further afield. But with a glut of Western channels already filling Asian EPGs, how important is local content in attracting subscribers in the region? And what role will international formats play in feeding that demand for local content?

The rise of pay-TV platforms across Asia has both changed viewing habits and arguably increased viewers’ expectations. The largest pay-TV market in the world is now China, and Sony Pictures Television’s (SPT) general manager of Asian networks Ricky Ow estimates that across the entire region, pay-TV penetration has reached 50%.

Furthermore, Hong Kong-based industry analyst Media Partners Asia expects pay-TV penetration in Asia-Pacific to grow to 57% of TV homes (486 million subscribers) by 2015 and to 62% of TV homes (570 million) by 2020.

“The consumer has gone from the stage of questioning why they should pay for pay-TV to seeing it as part of their daily diet and the subscription as part of their household expenses. Asian consumers have become more affluent over the years,” says Ow, noting that in high-penetration markets like China, Korea and India, uptake is more than 75%.

ABI Research’s senior analyst Sam Rosen adds that the growth of the middle classes and their ability to afford content is the most prevalent feature of the growing market. “In China, the cable subscriptions are US$3 to US$5 a month. In India, they’re starting to get a little bit higher but are still below US$10. You have more and more consumers who are able to afford that.”

This has opened up a market where there is a thirst for content like never before. James Ross is CEO and co-founder of Lightning International, a Hong Kong firm set up to help non-Asian broadcasters break into the region. He earned his stripes at Bloomberg, where he launched its Asia-Pacific channel in 1996, and later moved to UK broadcaster ITV, where he helped launch formats into China, Korea and India.

“The infrastructure here, in terms of cable, IPTV, DTH satellite and so on, has been way behind Europe or the US but now is really getting up to speed,” he says. “Consumers are really demanding the choice of channels and programming that Europe has become used to over the past 10 or 15 years.”

This has already led to the emergence of aspirational lifestyle channel brands, particularly female-skewing networks, with local home-grown channels like Malaysia-based lifestyle net Li TV competing in the same space as Western rivals such as AMC Networks-backed WE TV and Scripps’ Food Network Asia.

Li TV’s general manager Anne Chan says her network aims for a “cosmopolitan audience” that understands both Eastern and Western content. The high-definition net’s English-language programming is mixed with a handful of original productions – such as cooking show The Maverick Chef – and Chan claims to have “many creative concepts in the pipeline.”

Since launching in 2009, Li TV has been set up in five territories, including Malaysia, Indonesia and Singapore, and has more channel launches planned for markets including China, Vietnam, Korea and the Philippines. But while Li TV illustrates the rising ambitions of Asia’s pay-TV players, the type of pan-regional content that it airs will arguably always struggle to compete with mainstream local-language entertainment.

AMC/Sundance Channel Global’s senior VP and general manager Harold Gronenthal admits that although his firm’s female-focused 24/7 lifestyle network WE TV is “very exportable,” it operates in a particular Asian “niche.”

Airing in Hong Kong, Korea, Singapore and Taiwan, WE TV carries the same English-language shows that are popular on its US counterpart. These include wedding programmes Bridezillas and Platinum Weddings and reality series Braxton Family Values, which made its Asian debut in November. “You have to be realistic and accept that Asia’s no different to any other part of the world. Home-grown content – films, entertainment shows or whatever – will undoubtedly always dominate,” says Gronenthal.

IHS Screen Digest analysis shows that in the Indian market, local-language channels such as Star TV’s Hindi stations fare better than their international equivalents. At the end of 2010, entertainment channel Star One reached some 22.3 million households, compared with BBC Entertainment’s 3.4 million reach and FX’s 3.6 million.

“An interesting indicator to how TV channels are perceived locally is that the international channels are largely found within the higher tier packages, while the local channels will be in the base packages,” says senior IHS analyst Richard Broughton. “This is normally a good sign of how important the channel is – the more exclusive the package, the less essential the channel. If you consider UK packaging from the likes of Virgin, you’ll get all the essential channels in the basic package and all the ‘nice-to-have’ but non-essential channels in the additional packages.”

However, with News Corp in charge of Star and the Star World channel a core part of its Asian content strategy across territories such as Asia-Pacific and the Middle East, the line between ‘local’ and ‘Western’ companies is increasingly blurring. Part of the issue is that while home-grown Asian pay-TV networks are succeeding on a local basis, few players are carving out a solid presence across the entire region without the input of a major Western media conglomerate.

Lightning’s Ross claims that while companies such as Malaysian satellite TV firm Astro, Singapore-based broadcaster MediaCorp and Hong Kong-based commercial station TVB are all “starting to have regional aspirations,” none are yet at the point of securing widespread, multi-territory channel footprints. “One of the advantages that Western producers still have is they generally produce in English, which is still probably the common language of Asia. The Chinese don’t speak Korean, the Japanese don’t speak Chinese, but they all have some understanding of English,” says Ross.

Although ‘localising’ Western content has long been an established idea for Western firms trying to enter Asian markets, some of the biggest Hollywood studios are now starting to take a more innovative approach and adapting their output to local tastes.

Viacom already has a firm foothold in Asia. It airs its MTV and Nickelodeon channels across South-East Asia and Korea, and also runs MTV in Japan and China. Earlier this year it also launched MTV Live HD and Nick Jr and plans to expand these throughout South-East Asia later this year and early next.

Although shows like MTV’s US hit Jersey Shore don’t pass the censors in Malaysia, the Asian versions of the music channel still air around 70% music, tailored to popular regional music styles like Korea’s K-Pop, according to Viacom International Media Networks Asia’s executive VP and MD Indra Suharjono. The network also airs a number of local events, such as World Stage Live in Malaysia and the MTV Video Music Awards Japan.

Nickelodeon has also started experimenting with Chinese-produced content in Asia, finding success with shows such as Pleasant Goat and Big Bad Wolf. “We created a block called China Toon a year and a half ago. We acquired shows from China and put them on and they did really well. That was our first test in acquiring local content,” says Suharjono.

With Viacom’s international strategy now focused on adult rather than child or teen-focused channels, the firm aims to step up its local production strategy. “We’re planning to launch Comedy Central in South-East Asia sometime in April next year, and the channel will be programmed with 70% Comedy Central US content and about 30% local content,” explains Suharjono.

Over time, she adds, the content division may move to 50/50, with the potential to split the channel into local feeds catering for the different senses of humour in each of these markets. Coproductions with local free-to-air stations could also be a possibility, with windowing options allowing content to appear on both the pay and free channels.

Local production plans are not yet on every Western channel’s agenda. Gronenthal at AMC/Sundance says that his company is currently concentrating on distribution for its Asian-focused Sundance Channel, which offers Hollywood films and AMC dramas such as Mad Men and Hell on Wheels.

Asked about local production or coproduction plans, Gronenthal says: “We’ve been at it for not quite two years in Asia, so we’re not at that place yet. We’re still trying to find our footing in general, so those things are still down the road. They are worth considering and always worth reviewing, but clearly down the road.”

At Fox International Channels (FIC), the focus is squarely on decentralising and localising output to tailor it to each market, according to Joon Lee, senior VP of programming, creative and channel operations. He is responsible for FIC’s 37 channels across 13 markets in Asia-Pacific and the Middle East, including the brands Star World, Star Movies, National Geographic, TvN and Fox.

“Local guys are coming up very strongly and now we have no choice but to face the reality that local or even Chinese or Korean content is a lot more popular than Hollywood programming, with the exception of some Hollywood movies,” says Lee.

Although he claims it is likely to be a few years before FIC becomes “more serious” about producing local versions of its shows, it is already taking steps in this direction. In partnership with Astro and fellow News Corp-owned firm Shine, FIC’s Star World channel in Malaysia is already adapting the MasterChef cooking format. The firms will make the standard competition show, and a second ‘masterclass’ series to run alongside it, with Astro broadcasting the former and Star World the latter. FIC’s Korean channel TvN Asia is also making a pop talent show in partnership with Korean media giant CJ Group.

FIC’s current main aim is to localise its channels for each market, altering its core Western programming with appropriate dubbing, local music, graphics, promos, clips and local presenters.

The group has already launched Fox Thailand as a fully dubbed station and it is performing strongly, according to Lee. In Malaysia, it has also launched a local feed of Star World and National Geographic, and is looking to do the same thing in Vietnam – following the lead of Fox channels in Japan and South Korea.

“If you watch Fox Korea, it smells like kimchi. If you watch Fox Japan, it smells like sushi, because that’s the focus we make. But if you come to Hong Kong and Singapore and watch the channels, they smell of nothing. They smell like a hotel network because they’re very safe. But if you take ‘hotel’ channels to any other country in Asia – except maybe the Philippines, because they’re very familiar with US culture – you won’t be considered as a serious competitor there anymore,” Lee claims.

Elsewhere, SPT is making a bold Asian play with its bouquet of five channels. Ow says that SPT’s AXN, AXN Beyond and SET networks are focused on high-quality English-language content while Animax Asia concentrates on cartoons and One is a Korean drama network – “Korean drama not for Korea but for Asia in general, dubbed into local languages,” he explains

“We have moved from English to Asian content, while maintaining a balance between international and Asian content, and continue to grow into those markets. We are going more and more into local languages to get an even wider audience,” says Ow.

The One network is wholly owned by Sony Pictures Entertainment, has an exclusive distribution and output deal with South Korean content supplier and broadcaster SBS – covering shows such as spy drama Athena Goddess of War, romcom Scent of a Woman and variety show Strong Heart – and is currently available in Malaysia, Singapore, Indonesia and Cambodia. “We are giving viewers in Asia first-run content that has a very short window from the Korean broadcast. We are dubbing the content, where it’s relevant, into the local language, and it’s content that’s popular. These are the three selling points for the channel,” adds Ow.

He believes there is also potential to localise further by adapting Korean formats and is looking to produce content of its own – although again this is for the future, with the current emphasis remaining on boosting the brand. However, he doesn’t rule out new versions of the channel even outside Asia if there is a demand for it.

Lightning’s Ross predicts a massive increase in production and investment in distribution networks in Asia, claiming: “A lot of the things that we’ve seen in our industry in other parts of the world in the last 20 years will happen in Asia over the next five or 10 years – whether it’s India, China or South-East Asia.”

With the growing internationalisation of content, Western firms are increasingly seeking out pay-TV opportunities in Asia. But with local productions and platforms also starting to mobilise, the region’s content market could have a bright future on the world stage, and for vendors of formats for local production this can only mean more opportunities.

Andrew McDonald


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