Received US$110 million in strategic financing, Viu wants to borrow OTT to dig into emerging markets

the Viu business is similar to Netflix: users can subscribe to videos on their platform to watch the content. Compared with traditional digital TV and OTT services such as IPTV,Viu, when consuming video content, it will leave data such as identity information, interest preference and behavior trajectory.

original title: strategic financing of US $110 million: Hong Kong version of "Netflix" and "Viu" want to borrow OTT Nuggets emerging Markets

when Thai girls look at "Star you" silent and Indonesian boys cry at "Wolf Warriors", please don't be surprised. This is when OTT went out to sea ~ when Zhen Huan and Nirvana in Fire became popular a few years ago. It is said that overseas institutions in North America, South Korea and Southeast Asia are also scrambling to buy broadcasting rights.

at that time, some comments said that this is the new generation of quintessence of our country following the "Belt and Road Initiative" out of the country.

Thai version of the poster

Cultural works have not gone abroad, I don't know. But the Internet TV service industry behind cultural works has gone out to sea to tell the story of "internationalization".

"the size of the Hong Kong market is not large, so it is inevitable to go out."

Li Kaiyi, managing director of the Media Group of PCCW (hereinafter referred to as PCCW), said this before the interview.

and on behalf of PCCW "going out" is its OTT project, Viu, which was launched in March 2015.

it has been learned that PCCW's Viu-based OTT service has recently received US $110 million in strategic investment from Hony Capital, Foxconn Capital and Temasek. It is reported that the funds will mainly be used to continue to expand the existing market share and expand business to other high-growth markets.

We know that the word OTT has been mentioned more and more frequently in the past two years. The so-called OTT is the abbreviation of over the top, which refers to the provision of various application services to users through the Internet, such as Internet TV business.

when it comes to Viu, to put it simply, the business is similar to Netflix: users can subscribe to videos on their platforms to watch the corresponding content. Compared with traditional digital TV and OTT services such as IPTV,Viu, when consuming video content, it will leave data such as identity information, interest preference and behavior trajectory.

Viu official website page

in fact, according to the data released by the Boston Consulting Group (BCG) at the end of last year, global OTT TV video revenue increased to US $25 billion in 2016. Although OTT TV currently accounts for only 5% of the global industry, it is growing at an annual rate of more than 20%, and its market share is beginning to be higher than that of traditional TV.

however, in the two major markets in the world: the United States and China, OTT video service providers compete fiercely. In the United States, for example, there are more than 100 OTT video service providers, and the 28 effect is obvious. Users are mainly in the hands of three leading players, Netflix, Amazon and Hulu.

this is why Viu chose to set up emerging markets when it launched its efforts to go to sea in 2015.

Li Kaiyi said that Viu currently covers 15 countries and regions, including Hong Kong, China, India, five major countries in Southeast Asia (Singapore, Malaysia, Indonesia, the Philippines and Thailand), and eight countries in the Middle East (Bahrain, Egypt, Jordan, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates).

however, according to the reporter's observation, there is also a lot of competition in emerging markets, such as Netflix and Amazon, which are following the path of globalization, as well as local players such as Iflix and Hooq in Southeast Asian markets. Li Kaiyi believes that Viu has its differential playing style and advantages.

the OTT business essentially connects both ends: content and hardware.

at the content level, Li Kaiyi believes that Viu focuses more on content close to Asian culture than European and American giants such as Netflix and Amazon, including South Korea, India (Bollywood and other Indian local languages), Japan, China, Thailand, Indonesia, Arabia and Indonesia.

compared with local players, Viu has the most video content in Asia. "in South Korea, for example, Viu has nearly 90% of the copyright of all its overseas video content," Lee said. "and we can provide subtitles with local languages four hours after the show's premiere to ensure the user experience."

Localization of emerging markets in addition to content selection, the network environment and hardware are also a major pain point.

Southeast Asia and other emerging markets are actually moving directly beyond the PC era into the mobile era, and mobile phones have become the preferred channel (hardware) for mainstream consumers. However, due to the overall economic level, most of its mobile phones are in the middle and low end at the current stage, and the network infrastructure needs to be strengthened.

Technology acquisition is the solution for Viu. In 2015, PCCW improved its technology through the acquisition of Vuclip, a US mobile video-on-demand platform. Li Kaiyi told reporters that Vuclip's patented DynamicAdaptiveTranscoding technology can maintain the fluency of video streaming under different network conditions, and at the same time, it can also timely adjust the resolution to match the corresponding definition according to the buffer bandwidth during playback.

in the profit model, Viu includes basic subscriptions (medium price, $7.99 per month), value-added members, and OTT ads.

Li Kaiyi said that the specific number of advertisers could not be disclosed for the time being, but it has reached cooperation with many international well-known brands in different industries, including pimg, Unilever, L'Oreal, Estée Lauder, McDonald's, Samsung, LG, Sony, Adidas, Nike, Louis Vuitton, Chanel, Expedia, HSBC, Standard Chartered Bank and so on.

in fact, according to Statista's revenue forecasts for several emerging market video subscriptions (SVOD) and advertising (AVOD), in 2016, SVOD was US $211 million, a growth rate of 24.8% and a growth rate of US $599 million, with a growth rate of 38.3% and a high compound growth rate.

asked about the data, Li Kaiyi told three reporters that so far, the DAU of Viu has exceeded 12 million. In the first half of this year, the total number of downloads exceeded 18.6 million, an increase of 163% over the same period last year. Among them, a single user has about 15 weekly video clicks and a daily stay of 1.3 to 1.8 hours.

and from the point of view of the investors this time, it is also in coordination with PCCW's business. Foxconn, for example, is trying to get rid of its "hardware contract manufacturer" and tell the story of the transformation of a "technology service provider". And Hony Investment and Temasek have a layout in video-on-demand, so this entry OTT is not difficult to understand.

of course, I am also concerned about why no one has told the story of "soft culture" at a time when a large number of established video websites in China have been engaged in "hand-to-hand combat" for ten years.

is it possible that this year's excellent soil is not good enough, and that we have to rely on YY and Kuaishou?

Edit: mary