- Subscription revenue set to overtake advertising this year
- Tie-ups with IHQ, CJ, others deliver distinctive content
- Seeking deeper engagement, as comptitive costs rise
A new content strategy, marked by exclusive windows and original production, is driving paid subscriber growth at Viki, the six-year-old international streaming service with a focus on Asian drama.
SVOD is on course to become the company’s biggest source of income this year, says partnerships and programming SVP, Joanne Waage.
That’s up from a ~10% contribution at the beginning of 2016, when Viki started pushing the benefits of paid viewing (earlier windows and no ads) to its users.
Latent ambition to become a global internet TV operator has been put on hold in favor of securing Viki’s main audience base.
“This last year has been focused on winning at our core and, with that, we have also started being very, very strategic about the content we buy,” explains Waage, who joined in mid-2015.
“We used to be afraid that we would miss something and buy everything,” she adds. “It makes it harder to spend more money on exclusives if you’re doing that.”
For now, those exclusives are mainly from Korea and Taiwan.
Viki’s audience, which largely resides outside Asia, is more familiar with stars and TV shows from these markets, and thus more likely to pay for an earlier, ad-free window.
At the same time, Viki is maintaining a freemium approach to encourage viewers to sample shows and celebrities from elsewhere, reinforcing its wider appeal.
“We can’t engage them or convert them without letting them experience the content,” Waage tells Media Business Asia.
As an added bonus for subs, Viki is also experimenting with paid-only content. The first four episodes of Korean hit Legend Of The Blue Sea are free, but the rest are behind the paywall.
It's a small-stage trial for now.
“We will see how that works out,” Waage says. “I wouldn’t expect that to be Viki’s full-blown strategy.”
The US and Canada contribute the most to Viki’s top line, raising the importance of including these territories in premium rights deals.
In general, Waage aims for broad global coverage outside a title’s home market.
Alongside North America, viewing time is also high in Latin America, led by Mexico and Brazil, as well as some European markets such as France.
The platform has a lighter footprint in Asia, generally less monetizable than the Americas and Europe for the time being, and already home to fierce competition for top-tier dramas.
Nonetheless, key operational areas such as engineering, product development and customer service are still run out of Singapore, although company headquarters – once sited in the Lion City – have now relocated to the US.
Viki also has offices in Seoul, Shanghai and Tokyo, a proximity that Waage hopes provides an edge over its rivals.
Direct competition comes from DramaFever, a similar service now owned by Warner Bros.
Global SVOD majors Amazon and Netflix, as well as local rivals, are also in the market for Asian drama, pushing up prices for premium rights.
Community and content
Viki, acquired by Japanese ecommerce operator Rakuten in 2013, still nurtures global ambitions, aspiring to attract fans for dramas from across the world, not just Asia.
This year however is about sustaining the current focus, doubling down on community and original content.
Production has started on Five Year, a drama commissioned from Walking Dead creator Skybound. This follows Viki’s first original series, 2016’s Drama World, which was set in Seoul and LA.
The company has also placed an order for five distinctive web dramas from Korean studio IHQ. These will effectively serve as pilots, sounding out genres and styles that resonate with viewers.
Meanwhile, a new short-form vertical called Trendsetters went live last July, fronted by a dozen influencers from Dia TV – an MCN owned by Korean major CJ E&M.
Viki executives are also exploring possibilities around ecommerce, without direct involvement from its parent for now, to capitalize on interest in brands and products appearing in shows on its platform.
It’s been a time of diversification, in both content and revenue, to fortify the company’s foundations. There is more to come in 2017.
“If everything is executed correctly, a company like ours can thrive off our current audience,” Waage says. “But nobody wants to do that.”