By Shaun Lim
While the sheer diversity of the Asia-Pacific region is creating many challenges for video service providers, the same factor is in turn helping foster creativity in addressing these challenges. “What we are seeing is the world of video becoming more heterogeneous as the need for profits in the streaming world is throwing up new solutions,” said Louis Boswell, CEO of the Asia Video Industry Association (AVIA), in a discussion with APB+ on a rapidly evolving world of video characterised by diversification of services and business models.
He stated that the onus is very much on operators to find what works best for them.
“There is no one answer and every company needs to decide what is right for them, but increasingly, additional services are being packaged together with video — for instance, gaming or e-commerce.
“Meanwhile, business models are expanding from an over-reliance on only subscription to focus more on advertising and now in some cases, e-commerce revenue. TV shopping is being reinvented in the online world, and the lead is coming from China.”
APB+ spoke to Bowell after the successful conclusion of the Asia Video Summit (AVS) 2023 in June, which besides highlighting how diversity is the key to success in the Asia-Pacific region, also delved extensively into how monetisation can be driven by Connected TV (CTV) and free ad-supported streaming television (FAST), the latter of which offers streaming TV services supported by advertising, as opposed to paid subscriptions.
While acknowledging that FAST is already a “major business” in the US, Boswell is more cautious when assessing whether FAST can prevail in APAC.
“It would appear that the answer to that, at this stage, is different market by market,” he said. “The appeal is clear – you have a large number of free ad-supported linear channels for viewers so it is a good consumer proposition, and it is a good opportunity for content owners, if there is enough advertising and viewership to generate significant revenue.
“The conditions for success look as though they may be present in markets like Australia, South Korea and Japan, but currently it is premature to talk about FAST in most markets in South-east Asia.”
During AVS 2023, he also shared key findings from a recent AVIA commissioned research, where consumers felt that premium over-the-top (OTT) was of higher quality than mass streaming video environments (58% vs 36%), and commanded higher attention (49% vs 35%). Where product recall and brand recall for ads were concerned, those shown in a premium environment received 10% and 12% uplift respectively.
This, said Boswell, provides a unique and not sufficiently exploited opportunity for advertisers of all sorts to increase the efficiency of their campaigns. Many media planners and their advertising buyers however, fail to recognise that not all video environments are equally effective because consumers engage with video ads in different ways.
He elaborated, “In a nutshell, the levels of consumer engagement with premium video is higher and therefore advertising is more effective. If you are looking for a digital alternative to TV for your ad buy, then it seems obvious that the place to go is the digital alternative to TV that is being embraced by consumers – namely premium OTT services.
“All too often, TV is being replaced by social media and video sharing services in advertising buys. These are clearly legitimate and often effective advertising options, but we don’t believe, and the research supports this, that they are adequate replacements for TV.
“When it comes to the content environment, premium OTT basically is TV, just delivered by different technology.”
Another key theme of AVS 2023 was around the success of Asian content and storytellers, particularly those hailing from South Korea.
With Hallyu, or the Korean Wave, which refers to the global popularity of South Korea’s cultural economy exporting pop culture, entertainment, music, TV dramas and movies riding high, it is hard to look beyond this country for inspiration.
Netflix, encouraged by the global popularity of iconic titles such as Squid Game and The Glory, plans to invest US$2.5 billion in South Korea over the next four years to produce Korean TV series, movies and unscripted shows, doubling the amount the video streaming giant has invested in the market since 2016.
Ted Sarandos, Co-CEO, Netflix, declared, “We were able to make this decision because we have great confidence that the Korean creative industry will continue to tell great stories.”
While it would appear that South Korean creators have cracked the code on engaging storytelling that offers what consumers want, it has been the result of years of hard work, and others who wish to achieve similar success must be ready to forge their own path forward.
Boswell concluded, “What was clear is that the success in South Korea was not by chance. Instead, it is through years of planning, investment and co-ordination between industry and government.
“There is certainly the desire to emulate South Korea in many markets, and Thailand appears to be the one about which there is most optimism … but only time will tell whether they or anyone else has laid the foundations for success as rigorously as South Korea.”