Just because the Internet is a global phenomenon does not mean it is easy to launch a global OTT video service. Here are four tips from four continents on how to get it done.
I had the pleasure of moderating a panel entitled Strategy for Launching OTT/IPTV and Optimising Content Delivery into Emerging Markets at OTTtv World Service conference in London last week. Here is what the panelists had to say about the challenges of launching in China, the Middle East, Australia, and Africa.
China – can a foreign provider launch service in China.
When Netflix launched globally at the beginning of 2016, Reed Hastings, the company’s CEO, carefully exempted China. He said executives were studying how best to enter the market. Later, rumors suggested Netflix would form a joint venture with a Chinese company. However, recently the company simply abandoned any attempt to enter the market.
Akash Bhatia, Chief Financial Officer & Interim Head of Content ShowMax, has much experience dealing with the Chinese market. His company owns a third of Chinese Internet giant 10cent. Given Netflix’ failure, I ask him if any content company could successfully launch a service in China. He was not
“Getting into China can be very difficult from a regulatory perspective, from a launch strategy perspective. Audiences there are generally captive to three or so internet giants. So, trying to disrupt that process, 10Cent aside, would be very difficult. Content alone isn’t going to get you through that.”
Middle East – popular international content is not enough
Alpay Guler, Chief Digital Officer at Dogan TV, explained that Turkish television and movies are second only to U.S. content in the world market. He said Turkish shows reach 150 countries and account for 25% of worldwide TV show transactions. In the Middle East, Turkish content is so popular it feels to Mr. Guler like a home market. However, even here, that is not enough to guarantee success.
“The Middle East was a natural extension for our products. We launched our SVOD service BluTV very softly in the Middle East. At moment we are talking with different <local> partners to make this more effective. Yes, we know there’s demand for Turkish content, but we still need to be more local.”
Australia – on the need for local streaming capability
Paul Abfalter, Director OTT and Emerging Markets at Telstra, has plenty of experience helping online content providers launch services in emerging markets. He said a common mistake service operators often make is to run a “long-line” from their base of operation to the remote region where they are launching service. Though this might work for light usage, if the service takes off the operator must scramble to get a point-of-presence (PoP) in place. By way of example, he talked about how Telstra has helped Netflix meet its quality and scalability goals in Australia.
“We’ve seen with Netflix, who we’ve partnered with in a number of countries, they’ve gone in very light initially. The take up in Australia was dramatically higher than anyone was expecting. We had to move much more quickly than we were expecting. Not only did we have to build the right PoP solution, but also the right caching solution, which was the thing that really fixed the experience. Because the first three months were not good for anyone’s network, nor for the end user as well.”
Africa – On the need for good local content
One of the themes that ran throughout the panel discussion was the need for good local content. I asked Lindsay Servian, Head of ONTAPtv.com PCCW Global Limited, how to figure out pricing of a service in a particular market. He immediately honed in on local content as being a key determining factor in what a service provider can charge.
“We are working together with an African content provider, one of the largest, called Cote Ouest. In addition to a first-class platform and user interface, it’s that element of being able to get the right content at the right price with relevant local compelling content that’s so critical.”
Why it matters
To have an effective launch in an emerging market, service providers must expect to have:
- a network presence in the region
- premium, well known international content
- plenty of local content
Launching in China is not advised!