After having toughed it out through the economic slowdown of the late ’90s, the SARS crisis of 2003 and countless regulatory U-turns in China, Western media companies are starting to see their patience rewarded in the fast-developing Asian market.
“Definitely now there is exactly that same energy and vibe that was happening back in the early ’90s in terms of the opportunity and entrepreneurialism and all the investment that’s happening around the region,” says Christine Fellowes, managing director of E! Networks in Asia.
There are plenty of reasons for sellers to be excited. In India and China, the region boasts two of the world’s fastest growing advertising economies, while South Korea remains well ahead of western markets when it comes to new platforms like IPTV and mobile broadcasting.
“It does feel like the mid-90s — the markets are firing on all cylinders,” says Steve Macallister, senior VP and managing director at Buena Vista Intl. TV-Asia Pacific (BVITV-AP), which has sold “Desperate Housewives” to 15 broadcasters in 41 territories across the region.
With a growing middle class and an increasing number of program buyers, China and India remain the most talked-about markets. South Korea, which has a well-established free-to-air and cable TV market as well as a dizzying array of new platforms, is the more established one for many companies.
“The real growth markets for us are China, India and South Korea,” says Macallister.
Despite the fact that China remains highly wary of investment from Western media companies, a shortage of local content means imported series are in demand. E!, for example, is selling about 200 hours of programming to the market, while Disney’s “Desperate Housewives” made a strong debut on CCTV 8 last December, pulling in the channel’s highest ratings for a Western program in Beijing.
Even the BBC, which was dropped from News Corp.’s Star TV paybox in 1994 after a much-publicized run-in with Chinese authorities, is seeing growth in the market, thanks to the rollout of digital TV. “It’s big in terms of potential, and growing,” says Nic van Zwanenberg, general manager of Asia at BBC Worldwide. “We’re selling to more platforms in China now.”
Key to success is a strong local presence — and plenty of perseverance. “The reality is it requires a lot of patience,” says Ross Pollack, senior VP, distribution, Asia, at Sony Pictures Television Intl., which has enjoyed success in the country with its Russian telenovela “Poor Anastacia.” “It is a challenging market because of layers of censorship and regulations, but you can be successful there with a team on the ground.”
Both Sony and BVITV have local teams in place, while E! works with local distributors. “It’s important for us to work with distributors,” says Fellowes. “We license programs to them, and then they consolidate 20 major cities and make their money with ad sales on the local channels. That’s not a business we want to get into.”
India, meanwhile, has fewer regulatory barriers to overcome, and growing demand for both English- and local-language content is fueling strong sales. “That’s a robust market, not only for English language but we’re also seeing increased interest in Hindi, Tamil and some of the (other) regional languages,” says Pollack. “That’s what’s driving that market.”
Even the most successful U.S. product can find it tough to compete against local productions, though. “One of the challenges we have generally, is competing with local primetime shows,” Macallister says. ” ‘Desperate Housewives’ and ‘Lost’ are winning their timeslots in a number of markets across Asia Pacific, but week in, week out, it’s normally the local shows in the top 50.”
As a result, a growing number of studios are licensing local versions of Western formats in the region. BVITV-AP, for example, is working on local versions of “Extreme Makeover” and “The Amazing Race” with India’s Sony Entertainment Television (SET) and Sony’s panregional channel AXN, respectively.
Sony is itself working with Indonesia’s Indosair on a local version of its U.S. sitcom “The Nanny,” which will launch in the early summer, while its joint venture with China Film Group, Huaso, has just finished producing its first MOWs and is now moving into original TV series.
“We’re the only studio with a license to produce and distribute content in China,” Pollack notes.
Sony’s Chinese programming also will sell well elsewhere in the region, and as well as producing local versions of U.S. series, both studios are acquiring shows from local producers, with a particular focus on South Korea.
“Korea’s an interesting export market for us,” Macallister says. “Korean content is very hot in other Asian markets, and this ties into our localization strategy.”
Last year BVITV-AP struck a deal with Korean Orion Cinema Network, to acquire the Asian distribution rights to its five-part murder mystery “Coma,” while SPTI inked a distribution agreement with Korean producer and distributor CJ Entertainment for the Asian rights to two Korean movies, “The Greatest Expectations” and “How to Keep My Love.”
At the same time, the country also is a major buyer of Western programming, thanks to a strong free-to-air and pay TV market.
“It’s a market that requires a lot of time and energy to be invested in it, and that’s what we’ve done over the years,” says the BBC’s van Zwanenberg. “There are more channels, they have developed more new-media outlets than anywhere else, (and) broadband penetration is very high, although broadband penetration really results in more local content.”
As well as output deal with fellow public broadcaster KBS, the Beeb sells to the other main outlets and its two channels, BBC World and BBC Prime, are carried on satellite platform Skylife. Traditionally its factual and children’s programming has done well in the country, but more recently KBS enjoyed strong ratings for sci-fi drama “Doctor Who.”
Perhaps the most exciting development in South Korea, though, is the growth of new technology. “Koreans are early adopters of technology, and Sony wants to be there to offer our product through our partners in whatever format or medium they find to watch it on,” notes Pollack. “It’s a laboratory for technology like DMB.”
In particular, the country has been a pioneer of DMB (Digital Mobile Broadcasting), and both Sony and BVITV-AP have licensed content to wireless operators. The latter deal saw SK Telekom-owned TU Media Corp. acquire more than 250 hours of programming, including “Desperate Housewives,” which has been streamed to more than 200,000 mobile phone subscribers since last year.