Viacom’s new Asia head Mark Whitehead, announced Wednesday, will need to steer the network through a tricky but potentially transformational phase of its development, to keep pace with rival networks as well as changes in the landscape.
Viacom, home to some iconic pay-TV brands, such as MTV and Nickelodeon, has a promising business in this demographically young part of the world, especially India, but risks falling behind in key markets in Southeast Asia.
Whitehead, due to take up the new role in August, arrives from the BBC, where he oversaw channels, syndication, licensing and merchandizing as SVP and GM for Asia.
One pressing issue at Viacom will be further traction in Southeast Asia for its core channels business as well as syndication revenues. India and Australia are to be run separately, while the Asian merchandizing business is in solid shape.
Nickelodeon is a strong brand in the kids space and well established in India, but faces fierce competition elsewhere from Disney and Turner, which are taking the lion’s share of distribution revenue for kids channels in Southeast Asia.
In addition, Disney and Turner are hunkering down, building out theme parks, merchandizing and advertising sales on the back of broad distribution.
Both brands have sought expanded coverage through pay-TV’s basic tier for Disney’s XD channel (also a healthy source of affiliate fees), or through free satellite via a new JV in Thailand for Boomerang, a sibling brand for Turner’s lead kids channel, Cartoon Network.
Viacom will need to recalibrate its partnerships too, with deeper immersion in local markets opening up affiliate revenue while providing brand support for the studio’s consumer products.
One immediate opportunity is in Thailand, where the transition to digital terrestrial TV is prompting more investment into television, and from a wider range of players. This includes those with events and music businesses that could suit Viacom well.
This could mean further expanding its footprint outside the pay-TV ecosystem in Thailand, as Turner has done with Boomerang. Globally, Viacom made its biggest move yet into free TV last month, agreeing to buy the UK’s Channel 5 for US$450 million.
Also high on the agenda will be Viacom’s existing partnership with domestic major MNC in Southeast Asia’s largest market, Indonesia. MNC airs Nickelodeon content on its free-to-air channel Global TV, and licenses Nickelodeon merchandise, but the market offers plenty of scope for additional growth.
Nickelodeon already operates a strategy combining a pay channel and a branded block on free-TV in Southeast Asia.
Following Audiences Into Online
Meanwhile, the business model for MTV, Viacom’s youth and music lifestyle brand, is in flux. Local pay-TV platforms now have their own music channels, while MTV’s key millennial demographic spends more time with youth and music content online.
Viacom has a good track record of experimentation in broadband rich markets such as Japan and Korea, for MTV in particular. Now possible mobile partnerships are becoming increasingly important for all its brands, across Asia.
Business evolution in Japan could open up significant revenues though growth in the traditional pay-TV market is flat. Whitehead will have a foundation to build on, including ad sales as well as a localized version of MTV through a partnership with ad agency Dentsu.
Last year Viacom sought to revive its MTV channels by localizing in Thailand and the Philippines through partnerships with Thailand's VR1 Media Group and Viva Communications in the Philippines.
Viacom has also inked several digital syndication channels in China, where TV distribution is limited, including MyNickJr, a personalized online video offering unveiled earlier this year.
Comedy Central, popular at home, has already launched in Asia, but remains a niche proposition in this part of the world.
Yet to arrive in Asia, Viacom’s movie brand Paramount has promise, potentially as a basic tier film channel in high-growth, emerging pay-TV markets such as Indonesia.