What’s the content strategy for Amazon in Asia? Or are there multiple strategies?
You’ve got to balance licensed content with original content. When a customer comes to the site, they expect to see stuff they know – popular series, big movies. Start with that as the baseline. Then add stuff that is differentiating and original and give people a reason to come to a video platform they haven’t been [to] before. That’s where our originals come in. Combine the best of what you already know and expect, plus something new and differentiating.
How does strategy vary from country to country? In Japan, local content dominates the box office, but in Singapore, Hollywood is king.
Japan and India are hugely local markets, so more than 70% of content in those countries is local. And it is probably going to get higher than that. We put up the biggest new Bollywood movies, the biggest U.S. movies. We are going to keep skewing towards local content.
Does Amazon have local development staff in each territory, as well as acquisitions staff?
In some cases if you’ve got somebody acquiring variety series and the comedian turns round and says: “I’ve got a great idea,” then you don’t pass on to somebody else. But for the most part they are different people and different skill sets.
Original content is not just about writing a check and expecting a cool show to come back. You have to plan out multiple seasons, character entrances or turning a two-hour movie into a 10-hour series. So far we have been lucky to work with super high-end people, who have a good idea what their customers want for generations, people like Yash Raj or Excel Entertainment. Excel is both a licensing partner and producer of “Inside Edge,” our first original in India. They knew how to make it popular. Then we said this is how you can use international guidelines on multi-season format to make the show even stronger. It was a great collaborative process.
Is the weighing of originals to Japan and India because Amazon has the retail infrastructure, or because they are the markets with the heaviest local-content demand?
Those are the two countries where Amazon has a great retail service. It is really important for those customers who join Prime to have that flywheel where maybe they come in to watch a video program and they find that the retail offer that comes with the bundle is fantastic. And maybe it goes the other way around: They come in to do shopping and discover through “Inside Edge” that Amazon has great content.
They are countries where local content is important. In other countries where U.S. content is more popular, then the content won’t be as local.
How much does global strategy inform Asian operations? How much do Asia’s peculiarities inform HQ?
If we produce an Amazon Original in the U.S., or buy global content form the U.S., that will come to Japan, India and the rest of the region. We will look to see how it does. If it does really well, the data goes back to L.A. and they will look to buy more stuff that works in those locations as well as Latin America and Europe. They have a very positive feedback loop.
Is there anything that defines an Amazon show and distinguishes it from Netflix or HBO shows?
There is no one specific genre or single taste-maker for these companies. The next “Lord of the Rings” will be on Amazon.
What are the key, qualitative data you use on individual shows, data that persuade you a show has a long-term future when it might initially be loss-making?
There are a lot of great examples from the linear days, like “Breaking Bad” or “Community,” where Season 1 was not great, but people believed in the creative and stuck with it. We certainly face that as well and have cases where we really like the show and think it just didn’t get a fair shot with Season 1, and so we commit to a Season 2 that is bigger and better.
Do you have examples of shows that work in unexpected markets?
In Japan the example is “The Bachelor.” Everyone told us not to do that. Variety, drama, anime works in Japan, but a large-scale dating reality show has never been attempted, nor should it be. But we just saw this giant area of white space. Nobody is in this space so let’s go in and make the biggest and best dating show and see how people respond. That certainly over-performed in Season 1.
When Amazon launched in India it went with 18 commissions. Netflix went in with one, since expanded to five. What was the thinking, going in so big?
We had a lot of great licensing partners on the Bollywood, Tamil, Telugu and Marathi licensed film side and great partners on the kids’ side – for instance, we have “Chhota Bheem” from Green Gold – so we are solid there. We have deals with Warner, Paramount and others who have great U.S. content. But look at what is playing really well in the U.S. and other markets, and it is really high-end drama series. And there was this big blank spot on our Indian content section. Local TV, there was nothing there. And we thought we can’t just make one and see how it does, and then wait two years before No. 2 come along.
We didn’t start with 18 in mind. We solicited 100 opinions, 50 of those are good, and then as the scripts came in from development we decided to make those 18.
In India most consumption is off Hotstar, which had 67 million subscribers in August, and has free and paid-for content. Now Jio is coming in, in a big way. How does Amazon compete with these mass-market platforms?
Everybody has their own thing. Hotstar does very well with its ad-supported base. Jio bundles with mobile devices. [With] Amazon, the value is that you pay 999 rupees [about $15.50] and you get this great shipping service, plus content with no ads, latest movies, early windows, original series.
What is Amazon’s China strategy in this sector?
China is a market we have to keep looking at. Hugely successful local services like Tencent and iQIYI, Youku Tudou. Netflix, Warner, HBO, Disney have announced some deals there.
Those are deals licensing Western content into China. Is that Amazon’s strategy too?
We haven’t settled on that. With China we have to be patient, keep talking to people.
Is there an intention to produce Chinese content?
I’d put that in the same bucket as Korean or Australian content. If somebody has great ideas for original Chinese-language series, then great.
Would that be viable if you didn’t have distribution in China?
It would depend on the series. [On the possibility of making Hong Kong or Taiwanese content,] you’ve got to look at the potential in those home markets and other markets, and the decision process is very similar to any other show. If we make a Korean show, the question is not just how it will do in Korea. The decision would look at cost and the potential in the markets we are in.
Is competition for original content in Asia driving up prices?
So far we haven’t had a bad experience with our partners in Japan, India and Korea. Nobody has come into the room at the 11th hour and said, “Someone else has just offered me more money, so pay me more.” We know there is a limited talent pool out there. But I haven’t see any price gouging like that.