Within some of the world’s most populous nations cooperation, rather than outright competition, may be the best route to success in the streaming video sector.
That principal was neatly illustrated by the recent deal to integrate Asian OTT player HOOQ into the lineup of Indian OTT giant Hotstar. The “seamless” connection between Hotstar’s Premium tier and HOOQ has been live for a few days, and was unveiled officially on Monday.
It is strictly a business deal based on mutual interest, and does not involve any equity investment. But, overnight, the move expanded the potential Indian audience for HOOQ by several multiples. And in a market like India, where all the pay platforms aggregate a largely similar roster of channels, HOOQ’s strength in localization of Hollywood content helps Hotstar cement its market lead. Together, they boast of being the “Home to Hollywood” in India.
“Hollywood content needs to be appropriately localized. ‘Supergirl’ may never have screened in Kannada- or Telugu-language versions,” says HOOQ’s CEO Peter Bithos. “Localization is not just about sub-titling. Dubbing creates exposure at a different scale.”
Hollywood content has been slowly but surely growing in India over the past decade. Accountancy firm Ernst & Young and trade association FICCI recently reported that Hollywood is now earning 13% of India’s theatrical box office, up from low single figures, a decade ago. That has been achieved by Hollywood distributors going further down the localization route than almost any of Indian cinema’s strictly regional film businesses had done ever before – and by Indian audiences’ increasing familiarity with overseas content, due to travel and the Internet.
HOOQ’s India strategy emerges from a recent pivot, to focus entirely on the English-language sector in the world’s second most populous nation, and to take the linguistic localization effort further. “We are playing the OTT channel strategy in India,” says Bithos. HOOQ was already carried on Airtel and Vodafone, but Hotstar, backed by 21st Century Fox’s conventional pay-TV leader, has grown beyond all expectations, and now has over 150 million subscribers.
Bithos also claims there is “almost no overlap” between its HOOQ’s 6,000 hours of Hollywood content, and Hotstar’s existing supply deals. Hotstar previously offered HBO Showtime and some of the Disney lineup. HOOQ brings with it swathes of Miramax, BBC, Starz, Endemol Shine, PVR, Turner, Mattel and Lionsgate content in addition to films and shows from HOOQ shareholders Warner Bros. and Sony.
The two Hollywood majors bought in to a venture initially backed by Singaporean phones and TV group Singtel. They were last reported as having stakes of 17.5% each.
While HOOQ is still at the loss-making, development stage, and could do with a couple more strategic investors, it represents a smartly differentiated play that contrasts with the strategies of the global players.
Netflix and Amazon are both believed to be making only modest headway in the parts of East Asia situated between Australia (one of Netflix’s best international success stories) and Japan. With their model of monthly subscriptions and developed market price points, the pair are not as nimble or within financial reach of the region’s 1.8 billion population, as native Asian OTT services.
“South East Asia takes a lot of innovation, you can’t just apply the made-in-California model,” says Bithos. HOOQ, for example, has struck co-op arrangements with dozens of telcos and payment facilitators in its other business in South East Asia, and offers single day, full access subscription for as little as $0.25 per day.
The business plan in its four South East Asian territories – Indonesia, The Philippines, Thailand and, since 2016, Singapore – is distinct from its India strategy. It seeks OTT market leadership through localization and adaptation.
The company claims to be the OTT leader in Indonesia and to offer “the best of local” film and episodic TV content. That has meant moves into original production, something it does not do in India. It has backed shows such as “On The Job” from The Philippines and movies such as “Marlina The Murderer in Four Acts” from Indonesia. Low-budget, telenovela-style series that run for hundreds of episodes are the staple in much of the Southeast Asia. “We aim to bring to market the golden age of TV. There was nothing like (a local equivalent of) ‘Breaking Bad’ or ‘The Sopranos’, quality, binge-worthy content,” says Bithos.
While HOOQ and regional rivals like Iflix, Viu, and Catchplay may be able to outsmart Netflix and Amazon, a more nuanced picture emerges with the giant Chinese video groups. They are not only geographically closer, they are culturally closer. And for iQIYI, Tencent Video and Youku, expansion outside China in the video sector, would logically follow their parent companies’ Southeast Asian and Indian land-grabs in sectors such as groceries, taxis and online ticketing.
Whether, in the long run, the Chinese players will turn out to be collaborators, competitors or corporate investors, remains to be seen. For the moment, Bithos says: “We’ve learned a lot from them, such as the combination of (advertising-supported) and subscription video.”