Original content is increasingly becoming a must-have for an OTT service. With Netflix proving the value of such an approach, an increasing number of OTT providers have started producing their own content. The most recent is Hong Kong incumbent PCCW Ltd. (NYSE: PCW; Hong Kong: 0008), with its OTT service Viu.
Viu was launched by the operator in 2015, and delivered over a million downloads of the app in just over six months. The service offers thousands of hours of content, with a heavy emphasis on Asian programming. It was launched because "there is rising demand for mobile video entertainment, especially with millennials. The paradigm shift is significant, and so is the business opportunity in terms of subscription and advertising revenue," according to Janice Lee, managing director of PCCW Media Group. (See PCCW's Lee Discusses OTT Service Viu.)
Growth has been impressive already, with Viu announcing it had 6 million monthly active users across its markets in March 2017, up from 4 million in November 2016. Since its launch in Hong Kong in October 2015, Viu has expanded into Singapore, Malaysia, India, Indonesia, the Philippines, Oman, UAE, Saudi Arabia, Qatar, Jordan, Kuwait, Egypt and Bahrain.
While very much a regional player, in Asia Viu could take on the major global heavyweights, such as Netflix Inc. (Nasdaq: NFLX) and Amazon. With a sizable content library focused on local Asian content, a sizable pay-TV business (PCCW's nowTV service in Hong Kong) and relationships with mobile providers across Asia, it has some heavy artillery.
It seems the company is also following the global players' strategies, recently launching Viu Originals, a slate of exclusive content leveraging nowTV's production arm. It will include Chinese drama and variety shows from ViuTV, recently released thrillers, dramas and comedies produced in collaboration with Indian directors, and "premium Southeast Asian content from markets such as Indonesia."
The stated goal is to further increase engagement (beyond the already impressive 100 minutes a day currently spent by users) and create more value for Viu's advertisers and operator partners.
Viu is particularly excited about a new Viu Original show called Song Ji Hyo's Beauty Views, hosted by a former member of the cast of Running Man, a popular South Korean show. Viu is attempting to leverage the "Hallyu" wave of popularity for Korean content in Asia with this show. Typically, the Korean content genres that have taken off have been pop music and TV dramas, so a show on fashion and lifestyle tips is a little different.
But it also emphasizes the differences among OTT players even as they pursue original content strategies. Netflix focused on drama for its original content strategy, while Amazon's flagship show is on automobiles (The Grand Tour) and now Viu is focusing on lifestyle and fashion. (See Amazon Announces Grand Tour of 200 Countries .)
Viu is not only competing with Netflix and Amazon though: It also competes with Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY)'s HOOQ, a joint venture between the operator, Sony Corp. (NYSE: SNE) and Warner Bros. Entertainment Inc. ; and iflix , who counts Sky among its investors. In fact, iflix just announced its own expansion into the middle-east and north Africa, extending its service to include Saudi Arabia, Jordan, Iraq, Kuwait, Bahrain, Lebanon, Egypt and Sudan. (See Can Asian OTT Providers Challenge Netflix, Amazon? and Is Sky Eyeing a Global OTT Empire?)
On the face of it, this should all be good news for the Asian consumer, who will have far more variety and a plentiful high-quality content to enjoy. The only problem with competition is that content options get fragmented; and consumers then have subscribe to multiple services or miss out.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation