Red Flag to a Bull
If you could look in my window, you'd often see my wife and I sitting on the sofa, each with a tablet watching our favorite TV shows. She likes "I Am a Singer", the Chinese version of a popular Korean reality TV format. I've gone from "Breaking Bad" to "Game of Thrones" to "Daredevil". You'd see this in a number of households. But it used to be a very different story in Asia. A decade ago, it was almost the opposite; you'd see dozens of people gathered around a single TV set in an auto repair shop or factory front. For ordinary people, you were outside a lot as your home probably didn’t have air conditioning or TV. Binge-watching your preferred shows was non-existent. Time shifting... some kind of Sci-Fi thing?
Fast forward to today. The trends redefining TV in the West are exploding in Asia, very quickly. Programmes, channels, online video, formats. Deals and tie-ups. FremantleMedia and the Shanghai Media Group, HBO and Tencent, Netflix and Alibaba-backed Wasu Media. Youku Tudou's (ADR)s are up 72 percent YTD. Got your attention?
The increasing digital streaming opportunity is but one identifiable trend that is reshaping one of the hottest areas of New Consumerism in Asia. A recent report by Juniper Research predicts that subscribers to "over-the-top" or OTT TV services will jump from about 92 million in 2014 to 332 million globally by 2019. The data suggests that after North America, Asia will be the next fastest-growing region. It's getting very stimulating.
And it's not just streaming; there are myriad other significant developments providing a wealth of opportunity (and also heated debate), which include the impact of mobile on premium content; the ever slippery regulatory landscape; changing viewing habits in Asia from entertainment to drama to factual formats (does the demise of American Idol presage anything?); the growing footprint of social media; the thundering herd of big data, analytics and programmatic advertising and the concept of Asian producers "Going Global". That Korean format export to China ("I Am a Singer") is a big success for Hunan TV. The production values are extraordinary - they use an astonishing 50 cameras in the "as live" production. It's a heady mix, in both the micro and macro sense!
For the Asia-Pacific region, much of this is being driven by the convergence of three mega macro trends: technological breakthroughs in TV and online video, the creativity migration from cinema to long-form TV and the rising Asian consumer. It's not that difficult to follow the money. The Juniper report said the Ad spend on Video on Demand will quadruple by 2019, with the APAC region in ascendancy by that time.
In addition to creative collaborations and the expanding talent mix (showrunners, writers and directors) opportunities abound for the investment community. While investment to date has been more into the Asia Pacific, new spending plans are being directed at taking shows out. A feature of the collaboration between FremantleMedia and SMG is to combine so-called Asian values with Western creativity, to create new global properties. Ian Hogg, CEO of FremantleMedia Asia Pacific, was recently quoted as saying, “The opportunity to create and execute story telling that focuses on Chinese values and tastes blended with Western structure and creativity is a very powerful combination.” It is hard to argue with the notion that outbound production and investment is gathering pace.
So it's an exciting time for the industry. In business, one always counts on new opportunities because if you look hard enough they're always there. But now does feel like a special time. I might pop up to Shanghai next month for a media conference, the 3rd FORMATS ASIA, 9-10 June, in which delegates will discuss trends affecting the TV and online video industry. There's likely to be an eruption of new ideas at the event, and also at China and the World, held on June 10. Lightning International (LI), a TV and online video distribution firm and CASBAA are organizing the latter and LI is staging the former with a university in China.
So what's the red flag to the bull? For content and format owners, producers, broadcasters, advertisers and investors, it's the exploding market. James Ross, CEO of Lightning International contributed to this blog. Photo - Carriage by Sea