May 15

How to grow across diversity on the APAC video market

Wednesday May 15th, 2019

Selected statements at Video Exchange Asia, Bangkok

On 7 and 8 May Johan Vanmarcke, Managing Director MEDIAGENIX APAC, attended Video Exchange Asia in Bangkok where OTT, broadcaster and telco leaders analysed the business of video in APAC’s diverse ecosystem, identified business critical industry shifts, and discussed strategies for the future. Here is a selection from the topics high-level speakers addressed at this event.

APAC is a very fragmented market with (too) many players racing to the top for premium content. On the positive side, there are more content creators and content production is getting cheaper.
Content is still king but the viewer is the kingmaker, not the OTT platform or provider. This opens the door to aggregators that cater to specific viewer segments.
Business models are all about viewer demographics, viewer behaviour and content metadata. They seem to evolve from the premium model (copying Netflix) to different models for different countries: AVOD, FTA streaming, freemium, premium, TVOD, coproduction …. AVOD is on the up in Asia, given the low ARPU (Average Revenue per Unit); TVOD can be thrown into the mix to drive engagement, and B2C can be complemented with B2B (selling platforms, for instance).
Revenue share models (engagement, real value, performance based, …) differ widely, too, per partner and per country, with the minimum guarantee model losing ground.

Different approaches
It is argued that the content business can only compete on scale and that OTT providers should go beyond repackaging content, embracing localization and co-production. There is a great opportunity for local (and less pirated) content.
Content from second tier leagues or niche sports (including drag racing) reach millions of viewers. Bite size content is popular, too, and mainly gets watched during the day.
DAZN is trying out free Wi-Fi in stadiums during games to get viewers hooked on the DAZN offering and user experience.
CNN focuses on Hotels, Cruise ships and Inflight, sometimes with revenue sharing. The old Live news is the latest thing in Inflight.

Piracy and complexity
Piracy and content theft remains a problem. Like water companies don’t regard tap water as a competitor, many believe that technologies such as augmented reality will add value the viewer is willing to pay for.
Operators put user experience at the core of their business strategy, but find it hard to realise a good QoE (Quality of Experience) across countries in Asia. The complexity in OTT distribution makes it even more challenging than organizing a good playout. DAZN is spending a lot of time and energy on the technical challenges. Getting content is the ‘easy’ part, they say.

“Operators find it hard to realise a good QoE across countries in Asia.”

OTT providers that go global or regional have to deal with about twenty different billing systems, telco integrations, localizations and revenue share models. The low credit card penetration in Asia adds to the complexity of different payment systems per country, to the point where it becomes very tempting to partner with a telco. Just think of having payments seamlessly combined with internet subscription and the telco’s billing, partnering for a telco for co-productions, or tapping into their customer base. Another way to benefit from an interesting customer base is integrating with e-Commerce.
In all, the event provided many such interesting insights into the industry in the different countries of APAC.


Johan Vanmarcke

Managing Director MEDIAGENIX APAC

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