Raffaele: Overall my priorities are to accelerate our digital transformation by expanding our OTT services, including premium SVOD service Paramount+, AVOD service Pluto TV and preschooler learning subscription app Noggin. I am also focusing on continued growth for our studio businesses, and maintaining our strong position in all our traditional revenue channels, from linear to consumer products, live events, among others.
In Asia, I see great potential in streaming and mobile especially with 5G being so prolific, and the studios business, through which we can produce unique IPs that will also drive the growth of consumer products and location-based entertainment. To capture this potential and build our future OTT and studio businesses in particular, we strongly believe in the importance of partnership. We’re in a transformational moment, and we have to embrace it as one of the biggest opportunities for the future and continue expanding our leadership.
Tony: We have three top priorities. First, focus on DTC (direct-to-consumer) strategy and product. Second, creating content and products that are more in line with DTC needs and can travel across different markets. This means a more synergistic approach to content and production. Third, integration of our teams to become more efficient and productive.
Raffaele: As each market is unique, the speed with which we roll out our video streaming strategy will vary. We will need to consider a range of factors such as the scale of our linear TV business, the value and length of existing distribution partnership, the availability of key ViacomCBS content and of course, the competitive landscape in video streaming. We will be constantly evaluating these points and listening to our audiences across Asia to ensure we meet their expectations and roll out when the timing is right.
We believe that there will always be a demand for free advertising-based services and paid premium subscription services in the streaming world. For this reason, we are rolling out our premium SVOD service Paramount+ in parallel with the expansion of our AVOD service Pluto TV, which has a global audience of over 33 million monthly active users, spanning across three continents and 22 countries throughout the US, Europe and Latin America.
We have a great portfolio of services and an incredible catalogue of International content that combines with our library at the local level and the Asian content we can produce in the future will potentially position ViacomCBS as one of the most important players in the Asian market, or at least this is our goal.
Tony: In North Asia, the opportunities in Greater China and South Korea lie in their massive market capacity, the relatively advanced development in real-life entertainment, and the influence of their produced content, e.g. the Korean wave. I am not talking about just Korean stars, but the kind of Korean wave from the Korean entertainment and content industry overall. Meanwhile, existing competition is also fiercer than ever.
On the other hand, the opportunity in the Southeast Asian market is that we have great prospects of real-life entertainment content, there is still a ton of room for exploration and growth. However, each market is very different from the other, with different cultural, regulatory and economic environments, as well as different audience preferences. That is why we need specific market focused strategies to cater for local market needs.
Linear business plays an important part of our business. It is an existing communication channel for brand building and IP creations to millions of our existing audience. The signature content we have built up over the past 20 years from our linear business has laid a solid foundation for our transition into the streaming world. We are committed to go beyond from being a great storyteller in the linear world to the digital direct to consumer space.
Since 2016, NAGRA has been running a research program called the Pay-TV Innovation Forum that interviews and surveys industry executives worldwide on trends and innovation opportunities. In 2019, one key finding stands out – Industry executives surveyed estimated that 17% of the households worldwide now use illegal TV services on a regular basis, up from 11% in 2017. In APAC, this percentage is 19% versus 14% in 2017. In Indonesia, 59% access pirate content on online platforms or devices, 49% use ISDs, in Philippines, 34% use a pirate ISD; up to 66% visit streaming piracy websites, and in Malaysia,25% use a pirate ISD; up to 50% visit streaming piracy websites. This is a significant acceleration in pirate service consumption that is driven by easy-to-use, high video quality streaming apps and devices that grant illegal access to thousands of channels, including premium channels, creating a new business risk for the whole content industry – Hollywood & sports, everywhere, where piracy is becoming THE competitor. We observe this as a global trend and piracy levels in Asia seem higher than in other markets such as North America and Europe.
We can expect that all content owners will face an increased risk of piracy in the years to come, along with a fierce battle for keeping or gaining new subscribers. Pirate services usually found as apps on Android devices and on set-top boxes or Smart TVs bought in retail, with hundreds of sports channels and large VOD catalogues, all in one place, are the new real competition that service providers now face. And it is totally unfair competition as pirates steal content rights while freely promoting their look-a-like services on the internet as legitimate ones, featuring credit card subscription schemes or targeted advertising.
Piracy is also widely available on social media. With social media increasingly embracing the role of broadcasters of premium content, they also have a responsibility to ensure there is no space for piracy on their platforms. As an example, 16% of French internet users access infringed premium content through social media (HADOPI study – 2019/10/17). This is significant!
The Internet is a global playing field for pirates where they illegally, promote, sell and broadcast their infringing services. While privacy rules on the Internet are meant to protect internet users, they also benefit pirates a great deal, in enabling them to hide behind proxies and anonymization services. In some jurisdiction, the mere collecting of IP addresses of pirate servers is subject to certain restrictions (as any IP address – even of a pirate server – is considered as personal data and subject to privacy protection). Privacy regulations should not end up protecting wrongdoers.
This is where regulation needs to be adapted to respond satisfactorily to the best interests of the industry to fight audiovisual piracy and cybercrime in general.
Pirate servers are resilient, they move from “IP friendly” territories to “DMCA non-compliant” territories; they use proxies to obfuscate or hide leaking servers. Pirate organizations are resilient: they can close down and reopen a boutique under a different name next door. Pirate are resilient to countermeasures. Think of VPN to circumvent IP blocking and Google DNS (or alike) to combat DNS redirection. This is the never-ending story of the cat and mouse game.
To mitigate this, an end-to-end strategy aimed at identifying and neutralizing the source of piracy is needed, including a combination of technology, enforcement and regulatory efforts.
While such protection makes the job of casual pirates very hard, this is not sufficient in resisting more organized groups that have access to all sorts of video hacking tools to steal content.
Hence, anti-piracy services need a three-pronged intelligence-based approach that focuses on:
- identifying and shutting down content leaks -with the use of technologies like content watermarking that add invisible user-level “digital signatures” added to the video
- monitoring streaming servers and getting hosting companies to take down infringing services
- disrupting pirate services, mainly by blocking access to specific servers.
From service providers to content owners, all stakeholders need to contribute to the anti-piracy efforts in a concerted way to be effective. Hence, the need to build alliances within the industry that effectively combat piracy in any form or shape.
Derek: Renewal discussions with content owners have become much more multi-faceted and complex over the past few years as technologies evolved and content rights have somewhat lagged behind. It is very important for operators to understand not only the exact content rights that are associated with the programming services and programs but also what has been carved out and excluded, the windows acquired and any holdbacks the operators may have against competitive services and/or downstream rights. Operators expect content owners to be much more open with such information so that both parties can assess any missing gaps and determine the value of the programming services and content more effectively. As such, content warranties have become a must whether for exclusive or non-exclusive content.
Finally, it is no longer sufficient for operators and content owners to wait until the renewal deadline approaches to discuss the performance of the programming services / content and negotiate commercial terms. It is imperative that both parties work more closely throughout the contract term and continue to enhance the content and build value for pay TV subscribers.
Derek: Embrace is the key word especially when those DTC plans are global initiatives. Both parties should try to develop a win-win and mutually beneficial relationship as operators have competitive advantages such a ready-to-pay subscriber base, multiple customer touchpoints, marketing and promotional expertise, customer service teams, ready to mobilize sales force and local market intelligence that can be immensely valuable.
Derek: Content aggregation has become much more important over the past few years as local operators also have to prepare for the entry of new international OTT operators that have global or Asian aspirations. Some content owners develop and curate their programming services for multiple territories and hence are not always flexible or nimble enough to meet the programming needs of local operators.
Derek: First of all, we continue to invest in our UI to improve content discovery by introducing a new home page on our platform. Customers are able to discover the most popular content across different genres i.e. movie, drama, Pay per view content. We also introduced a free zone on our home page to induce trial of new content. By introducing the home page, our aim is to create an OTT-like experience on a Pay TV platform where you can see all your content, our recommendations and what’s trending, all at our home page.
In addition, we introduced a new Edutainment package, Stem Learning, to target the family segment with kids aged 6 to 12 years old. We expanded our content offering to create an environment and provide tools for parent-child learning outside of school. We introduced a first-to-offer STEM learning ecosystem to families from a Pay TV service. It includes fun learning programme both on our linear channel & on our on-demand library Now Learn, as well as an interactive app, Now Player Junior, which provides a completely safe environment for children to watch and play educational entertainment & games, and a set of STEM learning toys that inspire kids and enable parent-child learning that is home delivered to customers on a bi-monthly basis. Stem Learning has been growing in popularity and it is our aim to make learning fun for children through edutainment programs. Hong Kong parents are very willing to spend on Education and this package is highly relevant to them. It helps us improve both acquisition and retention momentum.
Derek: We are going through a stage of transformation where we are streamlining our operations such as Sales and Data analytics, to automate the process, reduce operational cost and increase our speed to market. In terms of business, we are also tapping the new market of OTT via our new app, now E, an online subscription video streaming service for selected now TV content. Through now E, we are trying different pricing models such as day pass or event pass for premium sports content to test the appetite of this new market.
In 2020, there will be new opportunities for us to pick up growth again because we have Euro 2020 and 5G launching in the first half of 2020. These events will stimulate the subscription of sports content and the demand for ultra-high definition and VR content.
Clément: WarnerMedia Entertainment Networks is the name for our new company that was unveiled in late September. In Asia Pacific, it unites Turner and HBO to create a combined powerhouse of leading brands. The new business in APAC spans 42 countries and includes channels in 14 languages.
My role is Managing Director of Southeast Asia, Pacific – which includes Australia and New Zealand – and China. And brands that I will be looking after in my territories include Warner TV, Oh!K, Cartoon Network, Boomerang and Tuzki together with HBO, HBO Signature, HBO Family, HBO Hits, Cinemax and Red, as well as the OTT service HBO Go, and 2 SVOD services HBO On Demand and 鼎级剧场 (Ding Ji Ju Chang). I’ll also be responsible for the distribution of CNN International, HLN and BabyFirst.
In terms of priorities and excitement…our biggest opportunity as a part of AT&T and WarnerMedia is the chance to do more and collaborate more with all the business units within our group. By uniting our businesses while being part of the bigger corporate entities, there will be opportunities to leverage scale and resources. This in turn will enable us to invest more in content, deliver greater value for our partners and an even better experience for our fans across all platforms. Ultimately this is what will help drive our future growth. Together we have one of the most powerful portfolio of brands in the business.
Clément: In partnership with organisations like AVIA, we’ve made progress – but there is still plenty more to be done to combat piracy, which as everyone knows, undermines our business. At the same time, it’s important for us to deliver even better value to consumers and work with our pay-TV partners to improve the viewing experience.
In the content sphere, we’ll be looking to actively encourage and greenlight more Asian original productions. And also identify local talent from within our region who have great stories to tell.
Clément: It’s not really about one versus the other. These are 2 different content delivery models. A well-curated branded linear service is as valued and complementary to the discovery experience of a deep, broad on-demand library. As a business, we need to straddle both. Together with our partners, the goal is simply to make it easier and more convenient for our fans to find and experience the content that they love however, whenever and whichever way they want it.