Just because you can launch globally, doesn’t mean you should, attendees at day two of OTT TV World Summit heard.
Chairing a panel of global OTT leaders, Colin Dixon, owner and principal analyst of nScreenMedia, stressed that knowing your market “is absolutely critical”, not only in terms of the content you provide, but also the infrastructure, cultural and regulatory constraints of a market. Balancing these challenges varies by region.
In terms of delivery, Paul Abfalter - Director OTT and Emerging Markets, Telstra explained: “If you are on the US West Coast launching in the far east you might try to long-line a service at launch, then it takes off and you could find you don’t have a footprint on the ground and have to build up a CDN very quickly.”
He cited the example of when Netflix launched in the region. “They went in quite light, had a look at the take-up and then built up their network from there. In Australia, the take up was much quicker than [Netflix] expected, so they had to scale up really quickly”.
By not being fully prepared, they had a lot of damage limitation to do, he explained.
In Africa, the technology challenges are different again, Akash Bhatia - Chief Financial Officer & Interim Head of Content, ShowMax, explained. “In Africa, you have to think about how you pitch your services,” he said. “In some countries there is superfast broadband but it is expensive and most viewing is done on 4G or even download. So you have to think about whether you are pitching high end or low-end, where you might also be competing with pirates.”
Lindsay Servian - Head of ONTAPtv.com, PCCW Global, agreed: “It is that element of being able to get the right content at the right price. Getting that local content it critical.”
In terms of pricing, Servian noted: “There’s different ends to the marketing. Being able to target your market and having the infrastructure in place. If they are mainly downloading, it really is about having to have the right content. It is about freshness of the content how you implement that content and all of those come into the mix to get the right pricing.”
One common thread the panelists agreed on was the need to have good local content, preferably originals. For Alpay Guler, Chief Digital Officer at Dogan TV, originals were the cornerstone in its launch of its BluTV OTT service in Turkey. Launched earlier this year, BluTV boasts 1.5 million registrations, 11,000+ hours of Turkish and foreign movies and more than 30 live channels. Its next target is the Middle East. “The Middle East was a natural extension for us. We launched Blu TV very softly there,” he explained. “We are now in negotiations with partners to make this more relevant. We want to be local, not just through content partnerships, but also through media partnerships.”
A market that seems impossible to crack for outside interests is China. Dixon asked the panel: “Can a foreign company launch in China?”
The response was a resounding no. Or at least not on their own. ShowMax’s Bhatia said: “Naspers [ShowMax’s parent] is a minority investor in Tencent in China and believes China represents structural challenges, and regulatory challenges, when is comes to launch strategy.”
Telstra’s Abfalter agreed. “China has been a real wasteland. Minority investment is the way to go. You’ve got ownership issues to get around, you have got piracy issues to get around. Quality of service is a challenge. Thee Western media is used to a higher price point. You also have censorship issues, not just around pornography, but also political. Even Winnie the Pooh is censored in China at the moment because of his likeness to Xi Jinping in an election year. And a lot of OTTs have struggled to get their heads around these issues.”
Bhatia warned: “If you don’t due diligence in advance you can quickly run into problems. Understanding that content game needs to be part of your launch strategy.”
This content game has originals as its cornerstone. As Guler explained: “This is the core of the business, especially for new entrants. If it was 20 years ago launching with just a library you might have been successful. You have to really distinguish yourself now. OTT is becoming a TV channel, so you need to be unique. Original content is the only way to success.”
Bhatia agreed. “Originals are very important to us. Disproportionately our subscribers veer towards originals. You need to give subs a reason to subscribe and library isn’t enough for that,” he said.
So what is the role of content library’s in the OTT mix? “If content is like having a good meal, library is like having a good seat in the restaurant,” Guler said.
Turning to competition, the shadow of Netflix is omnipresent. For the panelists though, unless Netflix starts producing good original localised content, OTT’s with a strong local strategy and partnerships can succeed. “In every market, you can’t really compete directly with Netflix. We are not targeting markets where we don’t thinks we will be able to compete with Netflix,“ Guler said. “We believe in partnerships. We need local partnerships, local media content partnerships. We believe this is the only way to be successful.”
While entering a new market is complex, Servan summarised: “For any market you have an ecosystem. You have to have the right operator and the right platform. Regardless of other questions, it about knowing your target market. You have to ask what that market wants, thinking about local content, currency, price. It’s an end to end business. It all comes back to localisation.”