A number of challenges exist for the emerging over-the-top landscape in Asia, including widespread piracy and infrastructure issues in some markets. Ashley MacKenzie, the CEO of Brave Bison, recently sat down for an interview to talk about the various technological and programming challenges facing OTT providers in this region. Brave Bison is a global video network solution provider that supports cloud-based services to optimize the distribution, sourcing, audience engagement and monetization of live and on-demand video. The company also operates a multi-channel network on YouTube, consisting of over 3,500 channels. What follows is an edited transcript of the interview.
Ashley MacKenzie: Asia is now a significant revenue driver for our business and we are investing in additional resources to support the growth we are seeing.
Ashley MacKenzie, CEO of Brave Bison
Source: Brave Bison
The differences in language and culture — not just at country level, but also regionally within markets like India — require very specific approaches. While subtitles and dubbing can be simple tools to extend the reach of international video content, they will never replace localized productions in the eyes of the consumer. This is why companies like Netflix [Inc.] are investing in local content as they launch in markets like Japan. On platforms like YouTube, we see strong viewership of English-language content from the U.S., United Kingdom, Canada and Australia in non-English-speaking Asian markets, however, while the actual numbers seem high, they are dwarfed as a percentage of total viewership by local-language content in each Asian market.
There are cultural and technological factors at play here. In many markets — Malaysia and Indonesia, for instance — the infrastructure, so cost and speed, is a major barrier to delivery and user-adoption of a seamless OTT service. In India, however, where several high-profile OTT services have already launched despite the same infrastructural barriers, the sheer scale of the new middle-class population is such that one or more paid services can potentially thrive in the market where YouTube has been the best available distribution platform for premium long-form content until now. Markets like Singapore and Hong Kong, with relatively high personal income levels across culturally diverse populations coupled with reliable and affordable internet access, have high potential and already strong take-up for OTT services, whereas the likes of Japan and South Korea, with their ultra-fast broadband and mobile networks, have seen slower-than-expected uptake. In some of these markets and elsewhere, including China, Australia and New Zealand, OTT adoption is increasing sharply as the likes of Optus [in Australia], Coliseum Sports Media [in New Zealand], leTV and PPTV [in China] outbid traditional broadcasters for key live sports rights and turn mobile and connected TV into the new cable.
Hugely important, particularly for populous emerging markets like Indonesia, Malaysia, India, Vietnam, Thailand and others where demand for mobile video content is growing exponentially and the current infrastructure is barely sufficient to support the load.
It may seem a surprising strategy to anyone trying to protect the traditional pay TV business, but not when you consider that the role of this business has always been about aggregation and curation of niche content. Such a move is clearly aimed at retaining users, gaining new ones and making the platform an indispensable go-to. The key challenges, as always, will be how to retain these users in the face of such an open ecosystem and convert them into sustainable profit.
Absolutely. As more users sign up to the increasing number of services, they will expect larger and better libraries of content, so OTT services and existing cable TV channels will need to source new types of content to satisfy demand. We are already seeing this in the U.S., where low-cost creators of web-first content are being commissioned to develop original programming for platforms like Go90. The key thing to consider is the sustainability of the platforms, which without the financial backing, infrastructure and marketing power of a large established telco or media company may struggle to compete with the global OTTs, and their local telco-owned equivalents.
Piracy is a product of supply and demand. A lack of supply at the right price (for huge numbers of people in Asia, this is still zero) and on the right device through the right platform combined with immediate demand for the latest programming will result in users finding alternative ways to consume content. As supply of in-demand content increases across Asia, along with the imposition of government regulation and filtering that is now common across the region, it is natural to expect a decrease in usage of “unofficial” video services. But still, consider the frustration of a Singaporean who has canceled his cable subscription and now pays $13 per month for Netflix, only to find that this does not include “House of Cards,” which Netflix sold to a local Singaporean cable distributor. Having already cut the cord, he is not about to enter into another fixed-term cable contract just to get one show, which can be easily found on any number of streaming sites. It is incumbent on the emerging OTT platforms to satisfy user demand for the best content without restrictive windowing.