Moderated by Francis Kan, this roundtable discussion focuses on the evolution of television as new technologies emerge, featuring key digital media players Rohan Tiwary (Head of Broadcast, Media & Entertainment Partnerships, APAC, Google), Vishal Dembla (Chief Commercial Officer, HOOQ), Ed Barton (Chief Analyst, Entertainment, Ovum), Krishnan Rajagopalan (Director of Payments, APAC, Netflix) and Samuel Sweet (Senior Vice-President, Sales – EMEA & APAC, TiVo).
The Business Times (BT): What are the key trends impacting the Asian TV and media industry today?
Rohan Tiwary: We continue to see aggressive investments by global and local players on content and viewer acquisition for the D2C (Direct-2-Consumer) business, despite some deceleration in linear TV ad revenues. Freemium will likely be the dominant model for OTTs (Over-the-top services) in the region, as the pressure continues to mount on profitability.
Consumers in Asia are now spending 2.5X time on digital video compared to the US. They are also exercising more choice and requesting control of the entire media experience. With improving virtual assistant technology and proliferation of smart speakers, Voice is now heading towards becoming the dominant way for consumers to access content. Apart from mobile, we are also witnessing a rapid rise in consumption of video on the Living Room screen and this will further refine both distribution and monetisation models for the Connected TVs.
Furthermore, there has been an emergence of new content genres like Short Video, eSports and Gaming which are likely to impact content creation, monetisation formats as well as share of screen time for premium content.
Vishal Dembla: The TV and media industry is becoming increasingly fragmented.
Traditionally, competition came in the form of different channels and content offerings. However today, the TV screen itself is competing with multiple categories of entertainment from social media platforms, games and even utilities. Furthermore, all of the players have aspirations of being fully data-driven but aren’t able to transform quickly enough into a data-centric business. Without data to act as an insight or validation point, a lot of what they do is guesswork.
Ed Barton: Competition from YouTube, Netflix, Facebook Video, messaging platforms such as Line and their growing efforts to build video businesses. Younger audiences watching less linear TV. The growth of mobile video consumption.
Samuel Sweet: Over the last few years, the TV and media market in Asia has seen phenomenal growth in both the amount of content and the ways to consume it. Viewers from all demographics can access their favourite entertainment from wherever they are on the device they choose at the time they want. Key to this has been the proliferation of mobile devices, OTT (Over-the-top) services that deliver both local and global content to consumers at affordable subscription rates and high-speed data networks that can cheaply deliver the content.
Krishnan Rajagopalan: In terms of payments, most consumers in emerging APAC markets have not experienced subscription services before. The payments infrastructure in most of these markets is optimised for one-time payments and not for seamless recurring transactions. Over the past few years, fast-growing innovative payment systems such as digital wallets have gained rapid mind share, but these have continued to focus on one-time payments, given the primary focus on non-recurring categories such as transportation, e-commerce and travel.
This is changing with the move to the subscription economy. Apart from Internet subscription entertainment, there is a growing number of services across categories which could benefit from friction-free recurring transactions such as news subscriptions and membership fees. The payments ecosystem is rapidly evolving to address these needs, and we see the emergence of new recurring payment options (besides credit and debit cards) for consumers.
BT: What challenges are industry players facing in dealing with these trends?
Rohan Tiwary: Traditionally, broadcasters have been mostly planning for and executing their linear TV business. With strong user adoption of D2C offerings coupled with significant content and marketing investments by global players, local broadcasters are looking for robust and flexible monetisation solutions. The pace of change, both in technology and consumer behaviour, is daunting and requires efforts across the media value chain. Also, the ad tech and data skills required for the new business models are different and need traditional companies to look for experienced talent which is scarce across markets.
Vishal Dembla: There are a number of challenges facing the industry today, however, the biggest would be competing for engagement, which becomes even more challenging as the industry continues to fragment. Ultimately, all in the industry are trying to solve for engagement – how to keep viewers engaged with their platform, service or channel for as long as possible.
There are already some well-established international services that do this especially well, such as social media platforms and short-form content aggregators that monetise through ad revenues.
Ed Barton: They tend to be heavily invested in traditional TV business models such as commercial broadcast and pay-TV and must, to an extent, disrupt themselves, which is always very challenging. Also, they tend not to have the same scale or technical expertise as the native digital platforms.
Samuel Sweet: These trends are placing different challenges on different players in the ecosystem as consumers demand more and more. One area that TiVo has consistently seen in our research across the globe is consumers can be very fickle if they can’t easily find their content. A concept known as “Show Dumping” has come to the fore where consumers give up on a series they liked because it became too difficult to watch it. Over one-third of our respondents in TiVo surveys have experienced this and it’s often the biggest, most popular series that suffer this loss of viewers.
BT: What strategies should they adopt to thrive in a fast-changing landscape?
Rohan Tiwary: To keep up with the rapid pace of change, remain relevant for users and build scalable businesses for the future, innovation-led partnerships and collaborations will be critical for all players. Partners must constantly innovate and stay at the forefront of these trends – whether that’s offering distribution platforms and interaction models, providing cutting-edge advertising solutions to support short, portrait, live or other emerging formats, or leveraging data analytics and machine learning-driven insights to tailor content to individual consumer preferences.
Also, it is beneficial to form partnerships that allow flexibility and scale, be it for publishing content and ads into multiple formats concurrently or for developing new genres like virtual and augmented reality. Players who have developed strong and sustainable partnerships along with a strong local content play are already benefiting across markets.
Vishal Dembla: First and foremost, we believe that the future of TV is OTT However, three things will define the future of OTT. Building a data-centric business with data-driven insights will help inform who, what, where, when and why consumers want to watch specific content.
This in turn will exert a strong influence on how media companies package, deliver and monetise their content. Secondly, by digitising live streams, there’s an opportunity to monetise different audiences from TV and increase revenue. Thirdly, e-sports has grown immensely in popularity over the past few years, particularly in Asia. Providing easy access to content which is engaging, as well as social and “gamification” support, and producing a combination of live and video-on-demand content specific to e-sports would be a real boost for any OTT service in the region.
Ed Barton: Competing more effectively in OTT and mobile video advertising and subscription-based services is the key. Depending on the country, exclusive content and smart go-to-market approaches including working with carriers around bundled offerings can help. Broadcasters are increasingly cooperating on combined OTT platforms which might also help. Investing in the mobile UX is also important despite the short-term ROI challenges.
Samuel Sweet: Clearly, media companies need to stay agile and embrace the changes that are happening in the market. Keeping abreast of changes and trends is important but media companies should also make sure they are working with suppliers that have a solid background and the experience to deliver projects on time and within budget.
Companies like TiVo have invested hundreds of millions of dollars to remain at the forefront of content discovery, allowing our customers to take advantage of trends like Voice, artificial intelligence and complex data analysis and understanding to help them optimise their businesses.
BT: What changes can we expect to see in the next 5-10 years?
Vishal Dembla: In the next few years, we expect that international players will be marginalised and vertical-focused. The big studios are all looking at developing their own platforms and OTT services, which will house their IP, and we expect that they will start pulling their content from other services to hold dominant ground.
With Hollywood content constituting about 2 per cent to 4 per cent viewership of most markets in the region, we foresee a renaissance of local and regional content. We have already seen increased “verticalisation” of the OTT space, with platforms finding their niche, offering specific types of content to their audience base.
Ed Barton: There will be five or six truly global video platforms. There will be fewer pay-TV service providers and commercial broadcasters. There will be fewer TV channels and channel brands. Those which survive will be stronger, but the low-to-no growth environment for traditional TV will persist. OTT and mobile video services will increasingly be aggregated to simplify and improve the experience for audiences.
Strong growth in OTT and mobile video advertising will continue globally for years to come. Content production will be concentrated among fewer, larger organisations mostly based in the Western hemisphere and serious questions regarding the longer-term viability of broadcast news will have to be addressed. People’s homes will get smarter with digital assistants in the handset, smart speakers and a growing number of other devices in the household.
Samuel Sweet: One thing that is certain is people continue to have massive appetites to be entertained. The desire for episodic content isn’t diminishing, whether it’s Game of Thrones, a local telenovela or a YouTube star playing Fortnite. Similarly, while the 30-second advertisement is always at risk, content creators need to be financed, so commercial models will continue to develop and adapt to ensure people can view the content they love at the time and place of their choosing.
Krishnan Rajagopalan: Payment systems have to find the right balance between consumer convenience and friction-free experiences with customer protections. We see a number of innovations addressing both these aspects.
On the convenience front, the introduction of new payment methods such as digital wallets is rapidly seeing consumer adoption. On the consumer protection front, there are many innovations such as tokenisation (a standard to create a unique representation of the consumer’s card that is specific to a single merchant), fraud detection and control as well as customer authentication that will serve to boost the growth of online payments and increase consumer confidence in digital payments by addressing key consumer concerns about security and fraud.