The Asia TV Forum (ATF) is an international market for companies involved in financing, co-production and distribution of TV content across all platforms. Held in Singapore from 6-9 December 2016, it attracted more than 5,000 attendees this year. The event brought together content creators, brands and media platforms to discuss the latest developments in the Asian TV landscape.
Among the key takeaways from the event were:
- Increasing demand and the cost of content production are expected to result in more co-productions involving Asian TV companies
- As in other parts of the world, linear broadcasters are investing in emerging digital platforms
- The Indonesian TV market will continue to grow despite digital disruption
- The changing role of telco providers is demonstrated by the Korean market.
Broadcasters including EBS of Korea, NHK of Japan, CCTV of China and MNC of Indonesia were on the lookout for co-production partners at the event. IHS believes that this is a consequence of the increasing cost of content production. Content providers, both traditional and digital, are increasing investments in content thanks to the ever-growing demand. This has caused production costs to skyrocket and we expect this to result in more regional co-productions. At the event, Chinese OTT player LeTV revealed that online companies are spending RMB4-5 billion ($575-720 million) annually on content and this expenditure is forecast to double next year as they up originated programming to lure viewers.
The emergence of new media models has prompted broadcasters to reassess their position in the content triangle (creators, brands and media platforms). As part of the wider trend of digital disruption, the industry observed the rise of branded content on digital platforms. This content is being produced by production houses which approach brands directly (or vice versa), without going through the broadcasters. Sometimes the transaction involves media agencies for the knowledge they have about the brands and consumers. One of the early movers is Singaporean broadcaster Mediacorp which invested in Indonesian multi-channel network KapanLagi in 2015.
Indonesia has the world's third-largest national population of 250 million, nearly four times that of the UK. The adoption of smart devices is ubiquitous; however, this will not pose an immediate threat to traditional free-to-air broadcasters. Firstly, the spending power of Indonesians remains relatively low and thus, free TV content is preferred. Secondly, internet connectivity is still low due to Indonesia's geographical challenges. Indonesia geography consists of mainly rivers and sea, thus, making developing internet infrastructure more difficult. According to IHS Markit, TV programming spend in Indonesia grew 8.7% in 2015 to be INR6.6 billion ($49 million); and driven by the above reasons, IHS Markit expects it to continue to grow in the next five years.
IHS Markit agrees with the panel that the role of telco providers is changing, as demonstrated by the South Korean market where all the major telcos provide IPTV services: Olleh TV from Korea Telecom, U+ TV from LG Uplus and Btv from SK Broadband (a subsidiary of SK Telecom). D’Live, a South Korean cable TV provider, revealed the challenge of its positioning with no support from a telco provider. In order to stay competitive, D’Live is working with Netflix to enter the OTT business, investing in new technologies including UHD and home internet of things (IoT), as well as investing in content.