Asia features heavily in Netflix’s global designs, with recent launches including Japan, Hong Kong, Singapore, South Korea, and Taiwan…
SVOD, however, is by no means new to the region. One leading incumbent is HOOQ, a joint venture between Warners, Sony and Singtel group.
HOOQ was launched last January, and has been live in various markets since last March, such as the Philippines, Thailand and India. It’s looking to roll out in Indonesia and a few other markets later this year.
Krishnan Rajagopalan was a HOOQ co-founder, and today heads up content and distribution for the business, looking after programming, operations, and distribution deals. He is also set to appear at Broadband TV Connect Asia (11th-13th April, 2016 Shangri-La Hotel, Jakarta, Indonesia), where you can imagine there will be plenty of discussion about the impact Netflix is set to have on the Asian connected entertainment ecosystem.
Does Rajagopalan, then, fear the arrival of the world’s biggest internet TV service right in HOOQ’s backyard?
“I think we are actually quite excited about the new entrants into the space,” he answers.
Nothing unusual about this, perhaps (you’d hardly expect him to say they were terrified), but in this instance, it sounds perfectly convincing. “I think the rising tide is going to lift all boats,” he continues. “That is, I think Netflix coming to market is just going to raise brand awareness and category awareness.”
Indeed, as the incumbent, HOOQ has had ample opportunity to gain significant ground on any newcomers. Firmly in HOOQ’s favour is the fact that it didn’t just emulate other SVODs when its launched (though it certainly learned plenty from them), but had to innovate heavily to ensure regional adaptation and success.
“The innovations we came up with there were quite substantial. As an example, we ran the very first SVOD service in the world to negotiate download rights for Hollywood content. That took about two years to negotiate, but as soon as we did it, it set the bar for other services. Amazon in the US, a year after we did it, announced download rights to much fanfare late last year and now all the new entrants in Asia are launching download rights as a result.”
Necessity births invention, and all that. In this instance, it was the challenge of offering an OTT in a region where high level connectivity was no guarantee that forced HOOQ to think differently.
Another area that demanded a fresh approach was that of payments.
“Around 80-90% of the mobile users in these markets we target tend to be on pre-paid plans. They’re not monthly post-paid subscribers, they tend to top up on a weekly basis and they tend to have very low balances on their accounts. Similarly, these are cash economies, not too many people have bank accounts, even if they do they don’t have credit or debit cards, they don’t have net banking.”
Inevitably, ARPU for HOOQ is low, with an average subscription costing between two and three dollars a month – and that for a catalogue of around 30,000 hours, encompassing Hollywood plus local content.
All things considered, it’s arguable that HOOQ could welcome Netflix in the spirit of a seasoned veteran. In the light of this, I asked Rajagopalan if he had any… advice for the newcomers.
“I think recognising the one size fits all product would only appeal to a certain segment of the population of Asia,” he offers. “This adds a lot of operational and product complexity. Netflix of course has a single product, price, and a catalogue for all its customers. That works for certain segments of users, but to be a mass market in Asia, it requires a lot of dedicated effort to understand the local market needs and to build a customised product. That’s what we’ve set out to do.”
Broadband TV Connect Asia (11-13 April, Jakarta) will be providing exclusive insights into operators’ media and technology strategies. On this topic, keynote panel discussion will be focused on “How Can Telcos win in an Increasingly Competitive Market? Besides Rajagopalan, speakers include:
Francisco Claravall, VP for Product Development & Management, Globe Telecom
Joddy Hernady, Project Director TV-Video Business, PT Telekomunikasi Indonesia