TV ASIAPAC MIPTV 2016

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APRIL 2016

MIPTV & APOS EDITION

State of Pay TV / Netflix’s Ted Sarandos / STAR India’s Uday Shankar / CJ E&M’s D.J. Lee

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CONTENTS FEATURE

A New Battleground

8 WATCH THIS SPACE

Amid market disruption and economic concerns, Asia’s leading multichannel brands are charting new success strategies.

European pay-TV giant Sky made a significant, and surprising, investment in Asia this March when it shelled out $45 million for a stake in iflix.

Ricardo Seguin Guise Publisher Anna Carugati Group Editorial Director Mansha Daswani Editor Kristin Brzoznowski Executive Editor Joanna Padovano Managing Editor Sara Alessi Joel Marino Associate Editors Victor L. Cuevas Production & Design Director Phyllis Q. Busell Art Director Simon Weaver Online Director Dana Mattison Senior Sales & Marketing Manager Elizabeth Walsh Sales & Marketing Manager Andrea Moreno Business Affairs Manager

Ricardo Seguin Guise President Anna Carugati Executive VP Mansha Daswani Associate Publisher & VP of Strategic Development TV AsiaPac © 2016 WSN INC. 1123 Broadway, #1207 New York, NY 10010 Phone: (212) 924-7620 Fax: (212) 924-6940 Website: www.tvasiapac.ws

The fledgling OTT platform, available in Malaysia, Thailand and the Philippines, has been up and running since last May and has about a million subscribers for its low-cost subscription service. The platform boasts the largest library of top Hollywood, regional and local TV shows and movies in Southeast Asia.

The CEO of iflix, Mark Britt, has said the Sky investment will go toward accelerating the platform’s expansion plans as it targets additional markets across Asia. With Netflix now available region-wide and HOOQ—backed by Warner Bros., Sony Pictures Entertainment and Singtel—also making moves, the battle for dominance in Asia’s emerging OTT landscape is now in full swing.

These disrupters have Asia’s leading pay-TV channel operators feeling somewhat cautious as they brace for potential audience erosion and escalating content prices—against a backdrop of slowing economic growth and challenges in the ad market. This disruption, however, is pushing channel brands to be even more aggressive and innovative in how they position themselves in the market. As my report in this issue on the state of pay TV indicates, changes in technology and viewing trends are leading channel execs to be smarter and more strategic as they plot new models to keep driving ad revenues and find better ways to engage viewers—on whatever devices they may be using.

This MIPTV and APOS edition of TV AsiaPac also includes an in-depth interview with STAR India chief Uday Shankar, who discusses the breadth of the company’s portfolio—which spans entertainment, news, sports, movies and more—and weighs in on why its hotstar OTT platform is resonating with Indian consumers.

And speaking of OTT, this edition also features Netflix’s chief content officer, Ted Sarandos, discussing the company’s first few months in Asia.

We also hear from D.J. Lee, the president of the media content business at CJ E&M, about how the Korean conglomerate is expanding its presence worldwide through its export of dramas, entertainment shows and formats.

Building its business with OTT platforms is a key priority for the year ahead, Lee told me.

—Mansha Daswani

INTERVIEWS

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STAR India’s Uday Shankar

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Netflix’s Ted Sarandos

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CJ E&M’s D.J. Lee

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ABS-CBN International Distribution The Promise / Dolce Amore / On the Wings of Love ABS-CBN’s newest prime-time hit is Dolce Amore, and thanks to ABS-CBN International Distribution, global broadcasters can add this romantic-comedy drama to their schedules. “Its fairytale-like love story is guaranteed to pull heartstrings in any part of the world,” says Evelyn “Leng” Raymundo, the company’s VP of integrated program acquisitions and international distribution. ABS-CBN International Distribution is also presenting buyers with The Promise, which is the 2015 remake of the Philippines’ most successful drama. “Its updated setting, reimagined characters and powerful dialogue have raised it to a level worthy of the legacy of the original series,” says Raymundo. On the Wings of Love, meanwhile, is about a young couple’s quest for the American dream.

“ABS-CBN is committed to raising its level of production in telling heartfelt Filipino stories set against the backdrop of stunning and scenic regions of the Philippines.”

—Evelyn “Leng” Raymundo Dolce Amore

Bomanbridge Media The Dark Side of Crocs / Fit for Fashion / Mom Made Me a Star In the genre of nature and wildlife, the documentary The Dark Side of Crocs shines a light on the crocodiles that inhabit the Nile river in Africa. “The Dark Side of Crocs is one of a handful of our newest documentaries coming from the award-winning Nature Conservation Films Worldwide library,” says Sonia Fleck, the CEO of Bomanbridge Media.

“We expect that the new collection of wildlife titles will be an attractive addition to the catalogue.” Also of note for Bomanbridge are the lifestyle series Fit for Fashion and the music-based reality talent show Mom Made Me a Star.

“These shows are reflective of the consistent quality that Bomanbridge offers,” says Fleck. “The programs sell well and perform well ratings-wise for channels.”

“We are known for having a stronghold on Asian distribution, which shall continue, but we are bringing very commercial product to the international table and look forward to expanding our network of broadcasters.”

—Sonia Fleck The Dark Side of Crocs

Busan Contents Market May 11-13, 2016 Sponsored by the Ministry of Culture, Sports and Tourism and Busan Metropolitan City, Busan Contents Market (BCM) is celebrating its tenth anniversary. There will be a special focus on formats and co-productions in the genres of documentary, animation and mobile, according to Jong Sang Koo, the chairman of BCM’s executive committee. Alongside the market, event highlights include BCM Forum, with the Asia Next Contents Forum Seminar; BCM Academy, as well as MIP Academy, in partnership with Reed MIDEM; BCM Pitching; and the Asia Documentary Awards. “To celebrate our tenth anniversary, we are premiering Asia Documentary Awards for the first time with categories installed for undersea documentary and coproduction,” Koo explains.

“BCM 2015 had a spectacular record of attendance, with a total of 1,325 buyers and sellers participating from 554 companies from 45 countries reaching $93.6 million worth of sales and coproduction deals.”

—Jong Sang Koo Busan, South Korea 398 World Screen 4/16

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FremantleMedia International The Young Pope / Serena / Jo Frost: Nanny on Tour Jude Law stars alongside Diane Keaton in the drama The Young Pope, which FremantleMedia International is highlighting for the Asia-Pacific region. The series focuses on the beginning of Pius XIII’s pontificate, during which time he struggles with the responsibility of leading the Catholic Church. “In drama, I don’t think there’s been a more hotly anticipated series than The Young Pope,” says Ganesh Rajaram, the executive VP of sales and distribution for Asia at FremantleMedia International. The company is also offering up Serena, a documentary spotlighting tennis star Serena Williams, and Jo Frost: Nanny on Tour, which follows the titular parenting expert as she gives advice to families living in America.

“This slate reflects our high caliber of programming across all genres and demonstrates that we’re a one-stop shop for buyers.”

—Ganesh Rajaram The Young Pope

Rewind Networks HITS Rewind Networks has been working to expand the distribution of its HITS channel into more countries and pay-TV platforms. HITS, which is dedicated to classic TV programs, is currently in 8 million homes across Singapore, Malaysia, Indonesia, the Philippines, Hong Kong, Thailand and Taiwan.

“We’re proud to say that HITS is the fastest-growing entertainment channel in the region,” says Avi Himatsinghani, the CEO of Rewind Networks. He adds that the company is pursuing distribution partnerships with more platforms in territories where the channel is currently available and is “continuing our push for entry into new markets like Vietnam as well as smaller ones like Myanmar and Cambodia.” Among the series in the HITS lineup are The Golden Girls and Seinfeld.

“Rewind Networks specializes in curating the best from the past, all in one place, and we will continue to deliver awesome experiences with the HITS franchise.”

—Avi Himatsinghani Seinfeld on HITS

Sony Pictures Television Networks, Asia AXN / ONE / GEM Sony Pictures Television Networks, Asia operates five channels in the AsiaPac region. AXN is an English general-entertainment channel; ONE is dedicated to Korean entertainment; and GEM provides the latest in drama, variety and comedy shows from Japan and other North Asian territories. Animax is the home of Japanese anime, while Sony Channel is the network for Hollywood dramas and comedies. “Our priorities for 2016 include delivering a steady pipeline of compelling series that viewers want to watch and engage with,” says Hui Keng Ang, the senior VP and general manager of Sony Pictures Television Networks, Asia. “This means partnering with our cable operators across Asia to support their digital platforms, while finding new ways to ignite conversations around our shows in the social sphere.”

“Content curation is both an art and a science, so we’ve been building our library with new and returning shows that are meaningful to our viewers.”

—Hui Keng Ang The Art of More on Sony Channel 400 World Screen 4/16

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Amid market disruption and economic concerns, Asia’s leading multichannel brands are charting new success strategies.

By Mansha Daswani ragmentation. Disruption. Opportunity. Change.

Talk to anyone involved in the multichannel business in Asia (or anywhere, for that matter) and you’ll hear those words time and again. After years of surging growth in the pay-TV ecosystem, speed bumps have popped up across the region, prompting Asia’s leading pay-TV brands to rethink how they produce, program, schedule and distribute their services.

The good news is that the forecasts are still upbeat—albeit far more measured than they were in the past. A study last summer from Media Partners Asia—which stages the Asia Pacific Video Operators Summit in Bali this April—found that subscriber and revenue growth is slowing across the Asia Pacific pay-TV business. Nevertheless, the sector is still expected to increase by a compound annual growth rate of 6.6 percent from 2014 to 2019. The Asia Pacific Pay-TV & Broadband Markets report projects a “robust future” for the business, with revenues rising from $52 billion last year to $72 billion in 2019 and $84 billion in 2023.

The leaders of Asia’s biggest pan-regional groups concede, however, that it’s not going to be easy. “The market has changed,” observes Zubin Gandevia, the president of FOX Networks Group Asia. “It continues to evolve with the entry of new players—both in the new OTT space we all know about and in the traditional space.”

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WINDS OF CHANGE The arrival over the last year or so of regional, low-cost over-the-top streaming services, and the wide rollout of Netflix this year, have made it clear that the market is shifting. The key, executives agree, is having a comprehensive strategy to respond to those changes “The disruptions in the short term by the OTT entrants can be viewed as challenges,” notes Hui Keng (HK) Ang, the senior VP and general manager of Sony Pictures Television (SPT) Networks, Asia.

“The question is how fast we can turn this into an opportunity.”

Gandevia says that one knock-on effect of OTT’s arrival is a short-term escalation in content prices, given the

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SPT is seeing strong ratings for its Korean entertainment channel ONE, which features shows like Please Come Back, Mister.

newly competitive environment. “But the good thing is there’s more dynamism in the market. A good OTT offering leads to less piracy, which is good for all of us. A lot of these territories are still at low pay-TV penetration. We include OTT in pay TV—it’s the same thing, it’s just another way to get video out there. It effectively increases the penetration of pay TV.” Ricky Ow, the president of Turner International Asia Pacific, says that the rise of SVOD services in Asia reflects not only changing consumer trends but also a willingness on the part of audiences to spend money on the shows they want. OTT services in Asia, he says, “will help the pay-TV market redesign the current offering and its proposition—in particular, the way it programs and sells its products to the consumer.”

Ow predicts that “traditional media will reshape its offerings in a very short space of time and become more like these disrupters with a hybrid model. SVOD and OTT providers will co-exist, but the products from the incumbent players, having learnt a lot from these new players and each other, will all start to look very similar in terms of what they offer and how they operate.”

Christine Fellowes, the managing director for the Asia Pacific at Universal Networks International (UNI), agrees that the arrival of new competition, linear and digital, means that pay-TV chiefs will have to adjust their programming and scheduling approaches. “We’re making sure we’ve got unique offerings and we’re aligning ourselves very strongly with our platforms,” Fellowes says.

At Viacom International Media Networks (VIMN), Mark Whitehead, the executive VP and managing director for Asia, observes that online viewing trends have prompted programmers to ask questions like, “How do you curate the programming on the linear channel? [Do you use] thematic time bands and thematic days? How do you deal with marathon scheduling? How do you keep discovery in the schedule? And then, What’s the windowing strategy across various linear and digital platforms?”

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Rewind Networks made strategic scheduling a priority for HITS, a channel that was launched in part to respond to the fragmentation in the market. Avi Himatsinghani, the founder and CEO of Rewind, has positioned the fairly new channel as the home for classic American dramas and comedies—a key differentiator when most major pan-regional entertainment brands are battling it out for the latest hot show out of the U.S. When there are so many brands with a similar proposition, “that leads to confusion and sometimes alienation—you don’t know what to watch, when,” he says. “Our strategy is to build a habit among our viewers. I was sick of seeing fragmented schedules and [broadcast] times that were difficult to remember. We went back to the basics. Watch the show at the same time every weeknight or binge-view and catch up on the weekends.”

MINDING THE GRID “It will always remain about content,” says FOX’s Gandevia about how to succeed in the evolving multichannel business.

“The changing landscape is mostly on a distribution front. A good story is still a good story. Our number one endeavor is to ensure that we continue to have the best possible content, have it first on our brands—we don’t look at our business as a channel business anymore—have it exclusively as much as possible, and increasingly control all rights by making it ourselves. That’s our mantra: best, first, exclusive and our own.”

Being “first” has been a lead strategy for a number of Asia’s top general-entertainment channels, which have made day-and-date premieres business as usual.

“We live in a connected world and it is important for us to provide audiences in the region the best and the latest, otherwise we’d lose them to other sources of entertainment,” says Jonas Engwall, the CEO of RTL CBS Asia Entertainment Network. “From day one we focused on bringing our key shows to Asia day and date with the U.S.” SPT has shortened the windows on its U.S. and Korean content for AXN and ONE, respectively, in large part to combat the

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piracy threat in the region. “You cannot fight pirates, but you can offer as compelling a service or better so that people can find a legitimate way to enjoy the programs,” Ang says.

Innovating their delivery methods is top of mind for Asia’s pay-TV channel execs as they come to grips with how consumers’ viewing habits are evolving. As such, being flexible with affiliate partners is paramount in order to cater to whatever a platform’s needs may be.

“We were lucky with the timing of our launch,” Himatsinghani at Rewind says. “Even though we were a latecomer in the linear pay-TV business, from day one we were able to secure live simulcast, streaming and catchup on-demand rights on set-top boxes and OTT.” The full suite of HITS’s nonlinear services is available on some of its most technologically sophisticated affiliate partners, including StarHub and Singtel in Singapore and Astro in Malaysia.

THE ABC OF TVE The prospect of losing customers to OTT should provide pay-TV platforms with the impetus to “buckle up and start moving very aggressively on ramping up TV Everywhere, on-demand and catch-up services,” Himatsinghani says, particularly when it comes to making “the user interface, the experience, as solid as ever.”

“We work with all our partners to try to make sure we’re giving them, obviously, the best linear channels, and to see what we can do as they develop and move forward into TV Everywhere,” says VIMN’s Whitehead.

That thinking prompted the creation of Viacom’s Play Plex mobile apps, which are coming to Asia this year. “We understand our affiliate partners want more from us [than the linear channel] and the Play Plex model works really well. It unlocks great value for the partners in giving the fans easy access to our curated content, at their convenience.”

SPT’s Ang says that nonlinear services are always on the table in negotiations with its affiliate partners. “We always ask what their plans are, so we can tailor [what we offer] to whether they just have linear TV Everywhere, which is a multiscreen solution, or they have very robust VOD catch-up services. Every platform has its own roadmap into TV Everywhere.

There’s no uniform offering in this part of the world. Some [platforms] are very advanced and some are still in the feasibility study stage. Every country has different broadband infrastructure. Our basic operating principle is, we have the rights, and when the platform is ready, we find a solution to service them.”

that perhaps consumers don’t fully realize yet. Alternatively, we can provide a safe, fully-branded and curated environment such as the Cartoon Network Watch and Play app. We work with affiliates in Thailand and Australia to authenticate the app and offer subscribers a genuine TV Everywhere product with live streaming and a lot more, including games and exclusive content.”

Engwall notes that RTL CBS is “100 percent focused on a 360-degree content approach” that includes linear and VOD access on set-top boxes and on mobile and online. “We are still one of the few international channels that offers all content on all platforms,” he says.

It’s not just viewing that is shifting online—ad dollars are, too. “The ad market is an exciting one for us, but it has its fair share of challenges,” SPT’s Ang says. “There is disruption from all the digital outlets. Our solution has been to provide not just spot campaigns. We have strengthened our in-house resources in terms of original-production capabilities and we built upon our sales team. They are able to provide branded entertainment and partnership opportunities. It’s about how you integrate the client’s brand into content.”

AD TIME “If you’re dependent on advertising sales for your revenue line, it’s not an easy environment,” says FOX’s Gandevia. “The good thing for us is, we’re not overly dependent on it. And because of our scale, we now have advertising operations in 11 of our 14 markets. So we are able to continue to grow. For some players it might be more difficult.”

“Money is shifting to digital in a fairly big way,” Gandevia continues. As such, FOX has made a foray into the digital advertising space with a FOX Sports website and app that have both free and authenticated sections. “If you’re just a consumer who doesn’t have our channels, you can get a rich offering of up-to-date news, highlights and some video,” Gandevia explains. “If you’re a pay-TV customer then you

OTT OPTIONS Ow says that Turner has two ways it usually works with its affiliate partners. “If they already have a great user interface, we can help them further enhance their integrated experience by providing content for their catch-up services. Compared to some of the disrupter options out there, these options are really just as good, if not better; that is something

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Turner is expanding its AsiaPac business with location-based entertainment like the Cartoon Network Amazone waterpark in Thailand.

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sell,” Himatsinghani says. “We’re focused on some of the residual airtime to reach the pan-regional advertisers. We’ve had some really fantastic partners come on board, including Disney and Subaru. In partnership with Subaru we expanded our marketing venture by working with our affiliates Astro in Malaysia and SKYcable in the Philippines to give away two cars [in a promotional campaign]. We continue to pursue iconic brands that would benefit from the halo effect of being associated with our hit shows.”

Perhaps the biggest challenge for channels looking for new ways to monetize viewing is that audience measurement in pay TV is inconsistent.

“Viewership data is lacking in most of the pay-TV markets,” SPT’s Ang says. “That’s why we continue to invest in our own research. We’ve just done some recently in Indonesia and Vietnam to supplement the data [we receive], so we have a better understanding of the profile [of the audience] and the viewership patterns.”

Turner, too, is upping its investment into research. Ow mentions regular surveys on demonstrating “how important and influential kids are in terms of household purchasing power.”

CRYSTAL BALL-GAZING

Previous seasons of Grey’s Anatomy are doing well for HITS, which now reaches some 8 million homes across the region.

can log in and watch everything live. That should result in us being able to go after the ad money that is shifting from traditional, and also build the brand in this new medium.”

Last year was a positive one for Turner’s ad-sales business in AsiaPac, Ow says, with results beating the company’s expectations. “Our biggest successes were client solutions that went beyond the ordinary and demonstrated our advantages. This momentum will undoubtedly continue in the coming months.”

Key examples of Turner’s approach include Cartoon Network’s partnership with Prudential on the financial literacy program Cha-Ching and an animated brandintegration campaign with Unilever.

GOING LIVE VIMN is also looking well beyond the traditional 30-second spot and, in stepping up its live-events business, has created a raft of new sponsorship opportunities for its ad clients.

“We’re very good at driving engagement on the ground with these events,” Whitehead says.

Examples include MTV Music Evolution in Manila, a live event that attracted 22,000 people and was broadcast on MTV around the world under the MTV World Stage banner.

Fellowes at UNI acknowledges that the ad market in Asia for subscription television is “inconsistent,” with slow growth in pan-regional spend and challenges in the local ad-sales space as a result of economic pressures and unfavorable currency fluctuations.

In response, Fellowes says that UNI has been exploring more “creative solutions and building big campaigns with sponsors and local production,” including, for example, product integration in its original series How Do I Look? Asia.

HITS has also been looking at innovative models for the portion of ad time it sells on its own.

“Because we’re a basic-tier channel, in the entry level, we give away a big chunk of our airtime to our local affiliates to

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Having better data, execs agree, is crucial in this evolving landscape where the only constant is change. And in responding to change, many channel chiefs note that the most important strategy may simply be going back to the basics: making sure you’re delivering a service that audiences want to engage with, and that they know where to find you.

“What the consumer wants is changing—they’re looking for more personalized, social, shareable content,” says VIMN’s Whitehead. “We have challenges. And we’ve had significant growth in all of our markets across the core channels business.

What’s driving that is great international and local content that really resonates with the marketplace.”

“In a world that is more fragmented, we believe that brands are more important than ever and we’re investing quite heavily in that,” says UNI’s Fellowes. “As there are more and more viewing choices, as people have a proliferation of apps and SVOD services and free video online and free to air and digital channels and the subscription-TV ecosystem, our belief is that for an audience, it is going to become more challenging to find something to watch! With all that choice it sometimes feels like an endless click-through on the remote control to find something. Our view is that curation will remain important in the future. We’re focused on taking our brands across multiple audience touch points.”

“In general, I believe that people make money in times of change,” says FOX’s Gandevia. “You’ve got to batten down the hatches. There’s a lot of tackling and blocking to be done over the next few years. If you can come out stronger you can be even more successful than you are today. That’s the way we see it. To do that we keep making the best product possible, continue to leverage our scale in order to get as much market share as possible and help the market grow, explore new areas and have a digital approach. The business is changing but in some ways it’s exactly the same. It’s the marriage of great content and great brands delivered in the most consumerfriendly manner possible.”

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TV ASIAPAC: What’s been the strategy for the sports business?

SHANKAR: Starting years ago in partnership with ESPN, STAR Sports set out to reinvent the sports experience, and we did that very successfully with cricket. And after that, for one reason or another, it plateaued a bit. We realized that required a very deep disruption and we decided to take charge of our own sports business. We made a big plunge. We decided to showcase the 4K experience for people last year. It was ahead of its time. With initiatives like the Indian Soccer League and the Kabaddi League and the Hockey India League, we made a big dramatic leap from being a one-sport country—the widely held wisdom [was that viewers would only watch cricket].

UDAY SHANKAR

STAR INDIA

By Mansha Daswani

One of the biggest stories out of India over the last year has been the breakout success of hotstar. The online service delivers STAR’s vast array of content—the portfolio, encompassing 40-plus services in eight languages across every genre, generates 20,000 hours of programming a year—in an ad-supported environment. At the helm of STAR India as CEO since 2007, Uday Shankar is ensuring that the company stays in its pole position by innovating across content creation and distribution. Shankar tells TV AsiaPac about what’s driving the gains at the 21st Century Fox-owned business.

TV ASIAPAC: How are you fostering talent in order to innovate your programming lineup?

SHANKAR: We have focused and invested in a big way in talent development, both creative talent and business talent. We’ve always been very eclectic about taking the best talent from all parts of Indian society. We have developed writers, directors and producers for television. We’ve also [worked with] more Hindi and regional film talent than any other company, starting with Amitabh Bachchan 15, 16 years ago, then Shah Rukh Khan, Aamir Khan, Hrithik Roshan and Akshay Kumar. So we’ve been very eclectic with in-house and external talent development and engagement.

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TV ASIAPAC: How do you stay competitive in a business where the cost of sports rights continues to escalate?

SHANKAR: Most broadcasters have taken the easy way out by just bidding very aggressively for the well-developed sports rights. We’ve bid very aggressively for some of the cricket rights we have, like ICC. However, we are not shying away from the hard work. We are using [the major events] as a beachhead.

We’re building a platform populated by a large number of other sports tournaments that are not expensive but take an enormous amount of hard work to build. We’ll be in a position where we’ll have a bunch of popular sports that are not very expensive and are ready to scale up. That’s a good place to be. When we were going into sports, we had two choices: either we made the same beeline for IPL, BCCI, ICC and other international cricket rights, and stayed limited to that, or we took some of those rights and used them to drive the larger sports development agenda. We opted for the latter.

TV ASIAPAC: How are you managing the acquisition of Bollywood titles, and how important are they to your schedules?

SHANKAR: Movies are important. Movies are a good driver for sampling, they bring variety, they’re good for appealing to male and younger target groups. We [saw that] once a movie was produced and it was out in the market, the prices were going berserk. It was a bidding war among various broadcasters. That’s why we decided to take a step back from that marketplace and we said, We will do a few output deals of a sort. But rather than doing those output deals with studios, where you get a blanket slate, we went to some of the most bankable stars and did backend deals with them. We did one with Salman Khan, arguably the biggest Bollywood star around, and one with Ajay Devgan.

So in the last few years, every movie these guys have done has come to us at predetermined prices. They get dedicated buyers and we get clarity of costs. On top of that we built our own studio. FOX Star Studios is in partnership with our sister company 20th Century Fox. It was created to produce Indian-language films. We just released Neerja, and it’s been making waves everywhere. So we’re bullish on movies, but we’re being thoughtful and calibrated with how we make sure we get a reasonable supply without breaking the bank.

TV ASIAPAC: I interviewed Priyanka Chopra last year and she was super excited that Quantico was coming to India on STAR, day-and-date with the American telecast. How important is imported Hollywood content for your portfolio?

SHANKAR: It’s a small universe, but a very evolved universe of people who have the most refined taste in global content. They watch Hollywood drama. It’s a small base but a very committed and dedicated audience. For almost 20 years now, when it

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comes to Hollywood films and drama, we have been the default destination and we have consistently built on that.

Starting with STAR World and STAR Movies, we launched STAR World Premiere, which is a unique experiment where we got the top American dramas from three or four of the biggest Hollywood studios, on the same day they’re released in the U.S. Usually there’s been a big gap. We realized this was an audience that had become so global that even a few days late for them was going to make them impatient. We also realized that was the root cause for a lot of piracy. So by doing day-anddate releases of top Hollywood drama, we actually delivered a blow to piracy in this part of the world. A few months ago we launched STAR Movies Select, which is the only destination in this country for high-concept, high-quality stories. The reception has been great. [It reflects our strategy of] staying ahead of the curve in anticipating and identifying audience taste and delivering on that disruptively.

I think Priyanka has been an amazing brand ambassador.

While there’s been a lot of affinity for Hollywood drama, it did require a second wind. That’s exactly what Priyanka Chopra has provided through her performance in Quantico. It was not one of those marginal roles that Indian audiences have come to expect from their stars. She is central to the story, she is the lead character, she’s done very well and she’s got international recognition. In terms of what Hollywood drama can do in India, Quantico takes it to the next level. One of “our own” is driving a big-ticket show in the U.S. That has the potential of taking Hollywood drama to audience segments where it would normally not have gone.

TV ASIAPAC: Tell me about hotstar—what did you want to achieve with it, and what’s driven its success?

SHANKAR: For the longest time we were told by everybody, in India and elsewhere, that this was a market that was digitally handicapped. Broadband was rickety and it was expensive; WiFi was not pervasive enough. But we were seeing all this data about pirated video and YouTube and other video destinations that were [gaining] a lot of traction. We felt that if we had high-quality content that appealed to the audiences that spent a lot of time on the internet and on handheld devices, it was a good idea to start offering it to them. This combination of high-quality drama in multiple languages, lots of compelling sports and a lot of big-ticket movies has been the driving force [for hotstar’s popularity]. On top of that, the one thing that has become part of our muscle memory is the viewer experience. We do it on TV. All things being equal, people will go for a better-quality viewing experience. hotstar is one of the most highly evolved content platforms, designed for ease of use and a very enriching experience. In the first year we’ve had about 48 to 50 million app downloads. That is a very large number. As data services become more robust and WiFi becomes more ubiquitous, the power of that platform will grow. We’re seeing that every day. We were very conscious about the fact that while we understood television well, digital was not a business that we understood intuitively. We worked with some of the top engineering and technology companies. We also used that time to develop a very highquality product and technology talent pool internally. That’s paying off. It’s still early days. For all the positive reviews, hotstar is still just a year old. But it’s extremely encouraging and we have once again created a milestone for the rest of the creative industry to aspire to.

STAR Plus’s daily scripted output includes, from top, Sita Ke Ram, Diya Aur Baati Hum and Tamanna.

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People are enjoying Netflix originals such as Marvel’s Daredevil, Marvel’s Jessica Jones, Narcos and Making a Murderer. Asian consumers are responding well to the Netflix experience because they love our originals and they love the control of a flat-fee unlimited viewing, commercial-free experience, which they can cancel anytime without commitments. They can watch as much as they want, anytime, anywhere, on nearly any internet-connected screen. They can play, pause and resume watching.

TV ASIAPAC: What message are you sending to the creative community across the region about the kinds of projects you’re looking for?

SARANDOS: Central to our original content is how we look for talented storytellers with a strong track record and who have stories they are passionate about telling. Great stories travel; for example, Narcos was filmed 70 percent in Spanish but is enjoyed all over the world, and no less in Asia. The story transcended geographies.

TED SARANDOS

NETFLIX

By Mansha Daswani

After steadily progressing across Latin America and Europe, Netflix finally landed in Asia this year. Following its 2015 rollouts in Australia—where, by all indications, the service has been a huge success against stiff competition—and Japan, where it aligned with telco and broadband giant SoftBank for its September launch, Netflix is now up and running across the region. China, of course, remains the big unknown. While censorship issues are still unclear, the OTT platform is busy filling out its content lineup and embarking on a few regional originals, including Hibana in Japan. Netflix CEO Reed Hastings and Chief Content Officer Ted Sarandos will be heading to the Asia Pacific Video Operators Summit (APOS) this April as the service continues to build its Asian presence. Sarandos provides TV AsiaPac with a snapshot of how the regional offering is faring thus far and what his goals are for Netflix’s Asian business.

TV ASIAPAC: What have you learned so far about what your Asian customers are responding to in the Netflix lineup?

SARANDOS: First, it’s important to say it’s just been a few months into our global launch and there’s still much to learn and discover about how we can evolve in Asia. But whether it’s Asia or any part of the world where we have launched, our first audience is usually early adopters of technology, entertainment enthusiasts and the well-traveled. In fact, what we are seeing in Asia is actually similar to what we’re seeing elsewhere in the world.

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TV ASIAPAC: China and India remain the region’s largest and perhaps most complicated markets. Can you comment at all on your strategy for China? And what are your views on cracking the Indian scripted market, which is very much dominated by female-skewing daily soaps?

SARANDOS: We see China as a longer-term initiative. It could be years or it could be faster than that, but at the end of the day we want to get it right.

Our goal is to create an incredible range of series and films, entertainment meant to appeal to people of every age, taste and culture. Because we aren’t courting advertisers, because we aren’t programming to a single demographic and because we are global and on-demand, we have a unique and expansive opportunity to tell great stories.

TV ASIAPAC: You’re heading back to APOS this year— what’s the message you’re putting out to Asian platforms about the kinds of partnerships you’d like to enter into, whether it’s telcos or consumer-electronics brands, to continue building your reach in the region?

SARANDOS: We are looking forward to working with Asian ISPs and consumer-electronics partners; it’s part of how we grow and expand. We want to work with our partners to support amazing innovation for consumer benefit; for example, partnerships on strong net neutrality, where payments are neutral between ISPs and content providers.

Today, our Open Connect program allows thousands of large and small ISPs to directly interconnect with the Netflix network for free—rather than going through third-party transit providers, which lowers both our costs and that of the ISPs. Then for MVPDs [multichannel video programming distributors], we want to work with providers who offer internet-capable TV set-top devices, working with them on integrated viewing experiences (and in many cases integrated billing), which increase the use of the operator set-top device. As for consumer-electronics partners, we are already working with them on Netflix-ready devices this year and our partners can take advantage of the quality of our original content shot in 4K and HDR [highdynamic range] to showcase their innovation for a superior viewing experience.

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grams, such as SNL Korea and Get It Beauty, benefited from these digital strategies.

TV ASIAPAC: International expansion has become a key focus for CJ E&M over the last few years. What led you to make this a priority for the company?

LEE: About four years ago, after having just released many hit shows domestically, like Reply 1994 or Grandpas over Flowers, we gained confidence and then started to look outward.

Formats are traveling faster and further than ever before.

Asian broadcasters have relied on Western content for a long time, especially for prime time. Now it’s time for Asia to capitalize on its creative content skills and resources by producing content that can be enjoyed around the world.

TV ASIAPAC: How do you see the interest in Korean content evolving in the next year or two?

LEE: Recently [Korean] reality entertainment shows have been very popular in China, as well as in North America and Europe.

The Genius Game is being rolled out by ITV Studios Global Entertainment in Europe, and Better Late Than Never [Grandpas over Flowers] was licensed in the United States.

D.J. LEE CJ E&M

By Mansha Daswani

Since it launched its first channel, the music service Mnet, in the early ‘90s, CJ E&M has been at the forefront of the cable-TV landscape in South Korea. Going up against three well-established free-TV incumbents, CJ E&M placed its focus on capturing youth audiences with its portfolio. Today it operates 16 channels, including the entertainment platform tvN and the movie network OCN. Television channel operation is just one element of the Korean media conglomerate’s portfolio, with film, music, live-entertainment and animation divisions. Riding the Korean Wave, CJ E&M has tapped into the demand for the country’s entertainment from foreign shores, exporting its locally developed shows to markets across the globe. Reflecting its commitment to upping its international profile, CJ E&M last year clinched a format collaboration deal with ITV Studios Global Entertainment. It also has a pact with FremantleMedia France for The Genius Game and its travel/reality show Grandpas over Flowers is being remade for the U.S. As the president of the media content business at CJ E&M, D.J. Lee is ensuring that the group continues to lead trends at home while also finding new opportunities for its content overseas. He tells TV AsiaPac about his strategy for the company.

Korean content is gaining popularity. Previously the Korean Wave mostly focused on drama, but now it’s evolving to also include reality and entertainment shows.

TV ASIAPAC: What’s driving the gains at CJ E&M? LEE: CJ E&M is South Korea’s number one content creation and media company. We weren’t always on top, though. In the early 2000s, most prime-time broadcast content was licensed Hollywood movies and shows like CSI. We did not have the means or the acumen to create content that would attract a large number of viewers. It became clear that we had to invest in developing and producing more diverse and compelling content.

The key to our recent success was our deficiency. We didn’t have a huge, loyal audience. That deficiency was the seed for our creation. We focused on digital marketing and social media, as well as emerging platforms that can have a massive impact, especially with the younger demographics. Our pro-

TV ASIAPAC: What about challenges in South Korea?

LEE: The popularity of TV shows is decreasing, as the young generation, especially those aged between 15 and 34, is going digital. In response to these changes, we are expanding our digital content capacity. We also plan to increase our workforce in the digital area.

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TV ASIAPAC: Tell us about your format strategy. How are you working with international companies to expand the reach of your formats?

LEE: We are trying to co-develop with major players like Endemol Shine Group, FremantleMedia and ITV Studios Global Entertainment. We also do co-productions with Chinese companies, and with partners in Thailand, Vietnam and other Asian countries. We are also expanding to target over-the-top platforms and other digital services.

TV ASIAPAC: What are the biggest challenges and opportunities for CJ E&M’s international business in the year ahead?

LEE: Our short-term goal is to succeed in developing and codeveloping IP to meet global standards. In Asia, we also hope to succeed with our content on over-the-top platforms.

TV ASIAPAC: What do you think are the prospects for international OTT services like Netflix in Korea?

LEE: Since our company’s focus is on producing world-class content, we think that distributors coming to Korea, like Netflix, present an opportunity for us. We are also developing our own OTT strategy.

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