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APOS 2015,SVOD,Telcos

Stage Set In SEA For SVOD Lift-Off

Mobile SVOD is off the drawing board in Southeast Asia, as regional hopefuls roll out legal alternatives to pirated offerings.

What happens next will be plenty of negotiation and some experimentation, with revenue models that can gain acceptance among content providers, potentially widening access to more top-tier films and shows, as well as with products that can appeal to consumers.

“None of us knows exactly how it will work,” remarked Peter Bithos, CEO of one major contender Hooq, speaking at this year’s APOS conference.

Hooq – a standalone service backed by telco major Singtel, with Sony and Warner Bros on board as minority partners – commenced its regional rollout in the Philippines and Thailand, initially via Singtel associates Globe and AIS, earlier this year.

“We have an idea, we have a concept, and we are going to build that out over the next year,” added Bithos, a telecoms veteran who joined Hooq from Globe.

“One thing I would say: what is going to work has not been built yet, and it is going to take a lot of collaboration and partnership.”

For Bithos, this means a fresh approach to rights negotiations, especially for driver content, as sustained investment in mobile broadband opens up a mass audience base across major markets in South and Southeast Asia over the medium term.

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PAY-TV FOR EVERYONE

Singtel’s SVOD play Hooq represents a potential new model for pay-TV, reflecting mass-market approaches developed by FMCG and telecoms firms.

Success hinges on persuading content providers to try out new pricing models and sachet packaging, to put together attractive services for people with little money to spare.

Hooq’s CEO Peter Bithos, a former telecoms executive, spoke to Media Business Asia on the sidelines of APOS on his plans to turn this concept into a reality in South and Southeast Asia.

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[Main story continues]

Cheaper price points can unlock untapped demand, helping boost overall industry size, Bithos argued, pointing to the FMCG and telecoms industry as examples.

“Other industries have done it,” he said. “When the telco ecosystem started to evolve, telco was built for postpaid subscribers paying 30-50 dollars a month.”

Bithos added: “No-one ever thought you could build an ecosystem built on 50-cent telco pricing, yet now over 50% of global telco subs act that way.”

Bithos has been busy recruiting to fill Hooq’s regional office in Singapore as well as on-ground executives in its core South and Southeast Asian markets, while building out the content portfolio, recently inking a deal with Disney for Southeast Asia.

Soon it will be joined by another regional mobile OTT contender iFlix, currently in closed trials for its service ahead of a planned simultaneous debut in Malaysia and the Philippines.

Other major Southeast Asian markets should follow fairly quickly, said CEO Mark Britt, also speaking at APOS.

Britt: ‘There is capacity to pay but you need to provide a better product’

The startup, funded by Malaysia’s Catcha Group as well as investors from the US including Evolution Media Capital, also secured PLDT, the largest telco in the Philippines, in its latest US$30 million funding round, which was led by Catcha.

The service, which recently announced a catalog content deal with Fox, BBC and Warner Bros, could act as a complementary service to Hooq for more affluent subscribers able to afford both, or go head-to-head for people with less money, Britt suggested.

The real competition however is piracy, he added. On average, people buy three discs at a time in pirated DVD stores in Malaysia for example, priced at RM10 (US$3) each.

“You have a significant proportion of people paying from 15-30 ringgit a month on pirated content,” Britt noted. “There is capacity to pay but you need to provide a better product.”

Meanwhile, Hong Kong-based telco PCCW has accelerated plans to roll out its own mobile streaming service, taking a controlling stake in seven-year-old mobile VOD service, Vuclip.

The acquisition, described as a merger between Vuclip and PCCW’s own initiatives in this space by PCCW Media Group MD Janice Lee, buys market experience and technical know-how that can accelerate the telco’s plans in a fast-changing landscape, explained Lee, also speaking at APOS.

PCCW has been buying rights to Asian entertainment programming from China, Japan and Korea, which can be distributed regionally via a variety of different platforms, including potentially Vuclip.

Lee: ‘I don’t underestimate the work that needs to be done’

“The consumption behavior is there,” Lee said. “A lot of this content is very sought after. There is no legal means, no legal service offering this content fast enough. We’ve studied it.”

Lee added: “People want speed, same night telecast. They will even live with shoddy subtitling from the illegal sites. But if we can offer value-add around that, we believe there is a market there.”

Vuclip provides telcos in Asia, the Middle East and Asia with a suite of paid and free video services, designed for low-bandwidth markets, that can be used to wean subscribers onto data plans and more value-added services.

In return, Vuclip benefits from telco billing relationships and direct consumer access, enhancing its bargaining power with content providers.

These kinds of relationships play a key role for PCCW’s regional plans, with the telco also distributing pay-TV channels it has aggregated using programs from mainland China.

“The local access to a customer base is still going to be key, so I don’t underestimate the work that needs to be done,” Lee said.

“If you’re just pure over-the-top, Netflix has done a phenomenal job but there’s one Netflix that’s been that successful," she added.

"We are actively seeking partnerships; we would like to work people in each of the markets who have a customer base and access.”

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