Opinion

Television is ‘a thing of the past’ for much of Asia’s consumer base

Netflix, Amazon Plus, Hulu and other giants entering the premium content space have effectively upended the longstanding tradition of programmers dictating what viewers get to watch, and when and where they watch it – argues Alon Shtruzman

The explosion of mobile apps and internet platforms like Netflix and Amazon Prime – delivering premium video content in China and India – has left many global media players awestruck. This rapid phenomenon contrasts deeply with the slow technological transformation over decades in the western world.

So what gives? To fully understand the exponential change, you need to look no further than the cable industries in the more mature media markets, where the operators and networks are facing an existential threat. Although they are doing what they can to slow progress, the battle already seems to be lost.

The cord cutting brought about by the advent of video-on-demand services has created unprecedented challenges for this besieged industry. Netflix, Amazon Plus, Hulu and other giants entering the premium content space have effectively upended the longstanding tradition of programmers dictating what viewers get to watch, and when and where they watch it.

With cable’s subscription levels shrinking and viewing levels declining for its two primary pillars – scripted drama and lifestyle programming – the critical dual-revenue stream model on which it was built, and depends on for its continued survival, is now at risk.

The US cable industry, for instance, has seen market penetration fall from 90 per cent of the country’s population down into the 70 per cent range. And in an ironic twist, American broadcasters that once considered cable to be their biggest threat still remain near full national coverage; even while witnessing diminishing viewing figures.

Contrast this scenario with the perfect set of conditions for the technological revolution underway in China and India. They have been able to move straight to broadband very quickly, because there is no strong cable industry in either of these enormous Asian sectors to fight against it. And their booming economies are able to build the significant two-way infrastructure needed to support rapid development.

Today, with the near-universal use of mobile phones among the younger generation across these two Asian nations, there is an insatiable appetite among them for content of all sorts. And they only want to watch it all through VOD apps. Television is a thing of the past for this sizeable segment of the audience.

To feed this frenzy, a multitude of big and small services have emerged with massive programming budgets. These fund the production and acquisition of both locally produced content and exported American shows, movies and videos. Enter MTV Networks, CNBC, Universal Music Group, Sony, Discovery Communications. Even the America’s National Basketball Association being among those that have made China’s nascent internet TV and mobile ventures a key part of their deals with media giant the Shanghai Media Group.

Illustration: Jacu Amansec

They all recognise that to succeed in China, mobile and internet must be an essential part of their overall sales strategies, regardless of whether we are talking original or adapted intellectual property. The quick pace of this Asian technological revolution has been matched by an equally monumental rise in production values and creativity.

Viewers are now blown away by the great content and talent coming from India, where production and script values today are easily on a par with the US. And you have to marvel at the absolutely brilliant stories and mind-blowing cinematic values on display.

Asia, like America, is in the middle of a creative renaissance. In both cases, it has been spurred by the entrance of new players, technology and new distribution methods. But Asia, unburdened by the constraints of a more mature media landscape as would be the case in the US or United Kingdom for example, has a distinct advantage. No wonder Netflix and Amazon Prime have set up shop there. It is the ‘Asian Century’ after all.

Alon Shtruzman is chief executive officer of the Keshet International media group

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