PCCW looks at Viu as just the start

• OTT to tap on ‘seismic shifts’ in consumer lifestyles and viewing habits
• Viu consistently topped the app store charts in Singapore and HK

 
THE video streaming space is certainly heating up in South-East Asia. You have regional players like Catcha Group’s iflix out of Malaysia and Singtel’s Hooq out of Singapore, and even US giant Netflix went global earlier this year.
 
PCCW Media Group, a subsidiary of Hong Kong telco giant PCCW Ltd, threw its hat into the ring with its Viu streaming service launching in Singapore in January, and in Malaysia a month later.
 
Despite the competition, PCCW Media managing director Janice Lee (pic above) is pretty pumped up.
 
“Take Hong Kong as an example – just three months post-launch, the Viu app had garnered over 500,000 downloads,” she tells Digital News Asia (DNA) via email.
 
“In both Hong Kong and Singapore, we have consistently topped the charts for most popular app or top downloads of free apps in iTunes and Google Play,” she adds.
 
She however declines to disclose user numbers, saying that Viu is “still in the initial post-launch stage.”
 
“The fact that there are a lot of competitors or new entrants in the market really reaffirms our belief that OTT (over-the-top) has a lot of business potential which has thus far been unexplored,” she argues.
 
PCCW Ltd is more well-known as a telco, with its broadband, fixed-line and mobile businesses, but via PCCW Media, it also plays in the content production, distribution, paid TV, free TV and OTT space, according to Lee.
 
“PCCW Media has always been at the forefront of innovative entertainment solutions for consumers,” she says.
 
Among the examples she cites are NOW TV, the first IPTV (Internet Protocol television) service in Hong Kong; and Moov, the first Internet OTT music platform in the island.
 
The launch of the Viu OTT video streaming service comes in the wake of PCCW Media’s acquisition of a major stake in Milpitas, California-based Vuclip for an undisclosed amount last March.
 
The US company operates a mobile video platform that claims over nine million subscribers across 12 countries.
 
Seismic shift
 

 
OTT is a key part of PCCW Media’s strategy because of shifts in consumer lifestyles and audience’s viewing habits, which Lee describes as “seismic.”
 
“Especially with millennials, who are tech-savvy, platform-agnostic, on the go, budget-conscious, and who demand flexibility of access to quality entertainment,” she says.
 
“Currently, Asia alone accounts for over 48% of the world’s Internet population, with the majority accessing the Internet through mobile devices.
 
“There were 494 million active OTT video viewers in Asia Pacific in 2015, according to Media Partners Asia analysts.
 
“A recent Horowitz Research study on OTT found that nearly half (48%) of millennials spend more than 50% of their viewing time streaming,” she adds.
 
And it’s a multi-screen era too, Lee notes, pointing to a Millward Brown Digital Study which found that in Hong Kong, after dinner, 26% of people tune in to content on their digital devices; while it’s 33% in Singapore.
 
“66% of Singapore netizens stream and/ or download video content each month,” she says, citing yet another study, this one called the We are Social study.
 
“If you do the math, Singapore netizens spend over 25 million hours each month watching online video – that equates to a staggering 32,500 years of online video watching in one year,” she adds.
 
The last study also found that 28% of Malaysian netizens watched videos on their mobile phones.
 
In fact, users in Malaysia and Singapore are spending more time online than they are watching TV, more than four to five times as much.
 
Telco might for OTT fight
 
When it comes to video-streaming in South-East Asia, especially in the emerging economies, a key challenge is the varying and generally weak infrastructure.
 
PCCW intends to bring to bear its own experience as a telco and OTT player, its partnerships with other telcos, as well as its investment in Vuclip to address infrastructure issues in emerging markets, Lee declares.
 
From Vuclip, it also acquired an “advance patented adaptive streaming technology” that would help “overcome any infrastructure hurdle in emerging markets’ with inherent bandwidth limitations,” she says.
 
Advertisers and subscribers
 
While other video streaming services have paid models, Viu has a free tier. This is in part to build another revenue stream from advertisers, according to Lee.
 
“By adopting a freemium model, Viu OTT will get revenue from advertisers for the massive support from viewers, along with subscription income from users who want to upgrade their service to access more advanced features,” she says.
 
“According to Google Consumer Barometer, 61% of Singaporean users remain highly focused when watching video on mobile phones.
 
“From advertisers’ point of view, highly engaged audiences correlate highly with [advertising] recall and impact.
 
“VIU OTT offers advertisers a cost-effective means to reach out to the ephemeral millennials,” she adds.
 
Lee cites a study by The Diffusion Group which shows that OTT TV ad revenue will be approximately US$40 billion by 2020, just under half of the projected US$85 billion in total TV ad revenue.
 
As for catering to subscribers, one bet Viu is making is the demand for Korean content, a decision made after some research into the viewing habits of the company’s target audience.
 
“The recent Acorn Study research we commissioned to look into viewing habits and preferences of online drama viewers across multiple Asian markets found that some content travels particularly well across the region,” she says.
 
“Topping the list are the latest popular Korean drama and variety shows; and animation from Japan, Taiwan and China; so we are capitalising on this mass demand with our VIU OTT offering.
 
“According to our research, 53% to 80% of viewers surveyed across Singapore, Malaysia and other markets like Jakarta, watch Korean dramas on a regular basis; and prefer Korean dramas over Western dramas produced in the United Kingdom or the United States,” she adds.
 
Localised edge
 

 
It is demand like this that would also position it well against a global giant like Netflix, which lacks “local cultural knowledge,” argues Lee.
 
“Our global team has local in-depth market knowledge which is perfectly well-perched to acquire and/ or produce engaging localised content that users want.
 
“Take Viu OTT’s amazing speed in localisation of content – in Hong Kong, our team can turn around and produce local subtitles within four hours for select Korean content; for Singapore, it is eight hours after the Korean telecast,” she adds.
 
This home ground advantage also stretches to working with local telcos and navigating past regulatory hurdles, a key factor in ensuring the success of any OTT service, according to Lee.
 
Within five months, Viu has launched in four markets – Hong Kong, Singapore, Malaysia and India – and this is just the start.
 
“We plan to continue our rollout progressively across Asia; Indonesia will be launched very shortly,” says Lee.
 
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