As a seasoned media analyst with over two decades of experience under my belt, I must say that the ambitious expansion plans of Warner Bros. Discovery (WBD) through Max into Asia are nothing short of intriguing. Having closely followed the evolution of the entertainment industry across the globe, I am particularly impressed by the strategic approach WBD is taking to enter new markets, starting with Australia and South Korea.
Following its successful debut in Japan in September and a launch in the smaller market of New Zealand at the end of October, the Max streaming platform by Warner Bros, Discovery is set for a broader expansion into seven additional East Asian countries starting from Tuesday.
JB Perrette, head of streaming at WBD, states that the Asia Pacific region likely offers our greatest potential for expansion, predominantly due to Max. He made this comment during his conversation with EbMaster.
Starting from five Southeast Asian countries (Indonesia, Malaysia, Philippines, Singapore, Thailand) as well as Hong Kong and Taiwan, the service HBO Go will be replaced by a modern platform called Max. This old service, which has been in operation since 2010, was long ago surpassed technologically by competing services and by WBD’s own Max.
In May 2023, Max, a new media company formed by merging Warner Bros., known for its iconic film studio and HBO pay-TV service, with Discovery, which boasts an impressive software structure and a wealth of unscripted content, started operating in the U.S. Over the past 18 months, it has expanded into international markets such as Europe and Latin America.
Perrette expresses his wish to have accelerated Max’s progress in Asia more swiftly. However, he contends that the delay, due to bandwidth and scheduling problems, enabled the company to release a significantly improved product for Asian customers, featuring three significant updates.
In other regions, we switched to HBO Max, primarily focusing on its content. However, [Asia] stands out as a unique case, encompassing all the shifts and adaptations: original HBO shows, Max Originals, movies from Warner Bros., Universal, and Paramount that are purchased once, among others. Over time, we’re regaining popular franchises that were previously on other platforms, such as ‘Friends,’ ‘Big Bang Theory,’ and ‘DC,’ while also incorporating all the unscripted content from Discovery. Essentially, the main enhancement is a more extensive, stronger, richer, and deeper selection of content.
Regarding our product’s user experience, it’s advantageous for Southeast Asia that we’ve had a two-year delay in launching, as all advancements made in our tech product during that period are already integrated into the service at launch. Furthermore, Perrette mentions there are more updates planned which will significantly enhance the user experience from ‘good’ to ‘exceptional’.
Due to the varied cultural and economic landscape, the company is finding it essential to adjust to regional and market conditions specifically within Asia.
As a cinephile penning my thoughts, I found myself intrigued by the strategic move in Japan. Instead of launching independently, they chose to embed Max, their brand, seamlessly into the established streaming platform of U-Next, the reigning king of local streaming.
In Southeast Asia, the app Max is being introduced independently. However, in Indonesia and The Philippines, Warner Bros. Discovery (WBD) will introduce special, affordable mobile-only subscription plans for Max for the first time. Perette and WBD’s Asia Pacific president James Gibbons argue that being the first to market isn’t always beneficial, and that WBD and Max can avoid some of the mistakes made by other international streaming services in Asia by learning from their experiences.
Perrette suggests that we may successfully dodge the traps that other companies have fallen into by over-investing in local content without seeing a return,” he remarks.
This statement can be rephrased as:
Gibbons states, “From a customer’s perspective, it matters whether Max can be found on other service providers or not. If you have Max as part of a bundle, you’re not paying for it separately. Essentially, everyone gets Max through the app. The choice between different business models is a strategic decision aimed at reaching every fan effectively. In each market, there’s a consistent retail price.
Perrette mentions that the concept of launching an ad-financed subscription level (AVOD) similar to what Netflix and Disney+ have implemented in the U.S., Canada, and certain overseas regions was contemplated but ultimately dismissed for Southeast Asia.
It seems the advertising market isn’t fully developed enough at this point to support premium video in a profitable way. However, considering other markets such as Australia where the premium video inventory market is more established, an AVOD (Advertising-supported Video on Demand) option might be a viable choice.
In New Zealand, similar to the U.S., they are keeping the traditional Max channel running, primarily for an audience who haven’t yet switched to the individual channel selection (a la carte) offered by SVOV. This older demographic hasn’t fully adopted these options yet.
Traditional media firms have shifted their focus from various platforms to solely streaming services, according to Perrette. He explains that his company sees itself as a universal distribution entity. In a unique and practical approach, Max in Japan – a market known for its local content preference – had to make some changes.
Instead of launching our product independently, Perrette suggests teaming up with an established partner who already has a vast market presence. By introducing our [WBD] product, service, and content through this partnership, we can familiarize consumers with the brand, learn what it stands for, and achieve a level of success that would be difficult to attain alone.
Gibbons says that Max’s partnership launch within U-Next also adds to Max’s global offering.
Gibbons explains that the plan is to obtain content from Japan for Max worldwide, as U-Next has collaborations with numerous Japanese broadcasters who generate a large amount of dramas. These dramas are essential for our global service. On the other hand, in our partnerships across Southeast Asia, our partners are primarily pay TV operators and telecommunication companies, with agreements mainly centered around the distribution of the app, rather than encompassing a broader scope.
WBD does not disclose which specific metrics, such as subscriber numbers, revenues, time to profitability, market share, or rankings, it will employ to measure its success in Asia. However, Perrette and Gibbons confirm that with nine launches in the Asia-Pacific region already under their belt, they are only halfway through their mission in this part of the world.
Previously announced, we plan to introduce a direct-to-consumer Max service in Australia next year. This will be a collaborative effort with several partners and will be accessible via an app. Australia holds significant value for us due to the strong connection our content has there, as stated by Gibbons. Perrette considers Australia as one of the top three potential territories for Max globally. As for South Korea, we are still working on finding the best approach, he added.
The task at hand is particularly important for several reasons. Firstly, Max’s entry into Korea occurs later compared to market leaders such as Netflix, Tving, Disney+, Apple, and local players like Wavve and Coupang Play, who have already established a presence there, including hosting platforms like Paramount+. Secondly, Korean dramas, films, and increasingly, unscripted shows are among the most exportable genres globally. This means that Max will need to compete aggressively to gain a foothold in this market.
According to Perrette’s statement, the content with the highest travel-ability, meaning it has the potential to be popular globally, seems to be Korean content, Japanese anime, certain Japanese dramas, and Chinese content. When deciding which content is suitable for local markets, these are definitely three areas we should consider and find innovative strategies in one or two of them.
There are many more possibilities and challenges in the broader Asia-Pacific area for Max or its predecessor HBO Go. One such challenge is determining when and how to enter markets that are new to us. These include countries like Cambodia, Myanmar, Laos, and rapidly developing Vietnam. Entering low-middle income territories isn’t just about finding suitable distribution partners. It also involves reclaiming rights previously licensed to other parties and localizing a large amount of WBD content to make it culturally relevant.
In India, where Warner Bros. Discovery (WBD) content is currently licensed to JioCinema, a platform owned by Reliance Industries that’s in the process of absorbing Disney India, including its popular streaming service Disney+ Hotstar and pay-TV platforms like Star, a standalone Max India operation may emerge as a latecomer but a premium player. This could be challenging in a market sensitive to prices, but with such a vast population, it might not necessarily be an obstacle for WBD/Max. Alternatively, they could form strategic partnerships with some of India’s mid-sized media operations that are striving to expand their scale but possess valuable local content and sports programming, thereby complementing a well-rounded offering.
For Max, there are only two certainties in Asia: “Australia is the upcoming destination,” and there remains a significant growth potential in this region, as mentioned by Perrette.
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2024-11-18 01:18