Luke Kang, President, Walt Disney Co Asia Pacific; Johannes Larcher, head of HBO Max Int'l; Kang Ho Sung, CEO, CJ ENM

APOS speakers outline Asia streaming expansion plans

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If all the ambitions of the speakers at the virtual APOS conference (September 7-9), which wrapped today, come to fruition, the Asia Pacific region will see a huge expansion in both streaming services and local-language content production over the next year.

While global giants such as Disney and WarnerMedia have started the international rollout of their direct-to-consumer (DTC) offerings in Latin America and Europe, both have ambitious plans for Asia, including production of local-language content.

Disney’s Asia Pacific president, Luke Kang, said the studio plans to become “a major player” in local production, particularly in South Korea and Japan. “We’ll be producing a lot of local and regional content with the creative communities across the region, to make our service much more localised going forward,” said Kang, speaking on the first day of the conference. “Luckily our franchises are much loved across the region…but we always knew local content would be an important part of our offering.”

Kang highlighted Indonesia as a potentially big market for the studio and said a strong regional content offering would be added to its Indonesian service soon. “Right now, Indonesia is a big consumer of Japanese and Korean content, so we’re excited to bring our investments in those markets to Southeast Asia,” Kang said.

Disney+ has already launched in Aus/NZ, Singapore, Japan and Thailand, and the studio announced this week it will launch in South Korea on November 12, around the same time it’s also expected in Hong Kong and Taiwan. The service has also been launched in India, Indonesia and Malaysia under the Disney+ Hotstar brand, with India accounting for 88% of the studio’s combined APAC subscriptions. Disney has kept the Star brand, which it acquired from Fox and has huge traction in Asia, as part of its content offering across the region.

Coming close on Disney’s heels, HBO Max International president Johannes Larcher described Asia as “super important to us” and also said that “we’re conscious of the importance of local stories.”

“We have seen the success story that is Korean drama, and will have that on our service, and we love Japanese animation and have already produced a lot in Japan,” said Larcher, adding that he was involved in launching Hulu in Japan a decade ago, before the streaming service was sold to Japanese broadcaster NTV. “You won’t win in Japan unless you have great content from Japan, anime and live-action, series and films. We launched in Japan ten years ago without this and it took us a while to figure out that we needed this to win.”

WarnerMedia has not set any dates for rolling out HBO Max in Asia, but already has a legacy on-demand service, HBO Go, active in eight markets in Southeast Asia and recently announced that Warner Bros movies will stream on the service just 45 days after theatrical release.

HBO Asia has been active in local-language content for several years, focusing on dramas made in Chinese and some Southeast Asian languages. Recent productions include Trinity Of Shadows, a co-production with Hong Kong’s ViuTV and Taiwan’s Catchplay, and six-part thriller On The Job, from the Philippines’ Erik Matti, which premiered last week at Venice film festival.

But of course, Disney and WarnerMedia are not the first global streamers to launch in Asia. In his opening keynote, Vivek Couto, executive director of APOS organiser Media Partners Asia, presented data showing that Netflix has the largest market share of SVOD revenue in developed markets such as Australia, Singapore, Korea and Japan. In emerging Southeast Asian markets, where average SVOD spend is lower, the global giant is fighting for subscriber share with Disney+ and local and regional players such as Viu and Indonesia’s Vidio. Amazon Prime has only ever been focused on Asian markets where it has a large ecommerce footprint, i.e. India and Japan.

Couto also said that content from the US, Korea and Japan powers SVOD engagement across the region, with stark differences between markets. US content has a 79% market share in Australia, but only 17% in Korea (where Korean content has a 62% share), and 18% in Japan (where Japanese content has 64%).

C-drama on the rise

Chinese streamers iQiyi and Tencent/WeTV, which acquired regional streamer iflix in June 2020, are also expanding across Southeast Asia and have so far made headway in Malaysia, Thailand and the Philippines, according to MPA figures. “We’re also trying to expand outside Asia in the Middle East and some other territories,” said WeTV chief Li Kaichen, speaking on the second day of APOS.

Both are also focused on K-drama and Japanese anime, but are also opening up international markets for Chinese dramas, as well as working with local producers to make content in languages such as Bahasa Indonesian and Thai. MPA figures show that Chinese content is gaining traction in Thailand, less so in other territories.

“We know that nearly 19% of the audience has still never sampled Chinese content,” said iQiyi’s Singapore-based international chief Kuek Yu-Chuang. But he added that it was still early days and that Chinese content is making gains in emerging markets like Vietnam and Indonesia, due to improvements in quality, technology and marketing.

Then of course there is Korea’s CJ ENM, another Asian giant with ambitions across the region and further afield. “We long ago accepted the global standard of Hollywood and have tried our best to produce premium content that can compete in the global market,” said CJ ENM CEO Kang Ho Sung.

CJ has so far been engaged in a delicate balancing act between rolling out its own tvN international channel and licensing its white-hot shows to a growing roster of regional and international streamers. In its domestic market, CJ’s Tving service is neck-and-neck with Netflix and Wavve, launched in 2019 by SK Telecom and local terrestrial broadcasters.

When asked how he manages this balance between licensing content and hanging on to it for DTC services, Kang said: “We just have to be smart…we have to drive Tving but we also have to maximise content expansion. We can’t answer that question in a word, it’s just case by case.”

Also speaking during the three-day conference was Helen Sou, chief business officer of Hong Kong-based regional streamer Viu, which is adding Chinese and Southeast Asian drama to a predominantly Korean offering; Sutanto Hartono, CEO of Indonesian broadcaster SCM and Vidio, which is ramping up production of Bahasa Indonesian originals; along with executives from YouTube, Facebook, Discovery, Netflix and Snap.

But while the region is undoubtedly set for a production boom, and has become a key battleground for the global streamers, Couto also sounded a few words of caution. Across the region, Covid-19 vaccinations have not been deployed as widely or quickly as expected; many countries are still enduring various levels of lockdown due to the Delta variant; and streaming services are coming under greater regulatory scrutiny in several markets, especially China, which is cracking down on both its technology and entertainment industries.

According to MPA projections, APAC’s video industry, excluding China, will be worth $72bn in 2021, growing to $88bn by 2026, at which point SVOD and AVOD will each have grown their market share to around 20% of total revenues, with pay-TV and free-to-air still accounting for more than half. So yes there will be growth, and some of the traditional players may continue to thrive, but with big variations in consumer spending power across the region; an uncertain regulatory framework; and no access to the biggest market, China, for anyone except domestic Chinese companies, it’s likely to be a bumpy ride.