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Fox Renews Its Korean Ambition

Fox International Channels (FIC) is continuing its push for a bigger share of the spoils in Asia’s second biggest pay-TV market, Korea.

Weeks after taking control of the local National Geographic Channel feed, formerly run as a JV with local entertainment major CJ E&M, FIC is bringing its Fox Sports channel brand to Korea, via a partnership with another local media company, JTBC.

In addition to its brand, Fox is supplying international rights as well as ongoing production and creative input to the new channel, JTBC3 Fox Sports, which will officially launch tomorrow (August 1) in more than 8 million homes.

JTBC, which already runs a specialist golf channel as well as a general entertainment offering, will handle local distribution and monetization while securing local sports rights.

The company, owned by Korean newspaper publisher JoongAng Ilbo, is an ambitious player in the TV space that has stepped up its scope of operations and investment after a change in the regulatory landscape in 2011.

JTBC3 Fox Sports will replace another channel, recently acquired by JTBC, putting it enough homes to start tapping the ad market from day one.

JTBC hopes to build on this initial reach, securing carriage in 12 million homes by the end of its first year, says JTBC’s broadcasting sports advisor, Seongwan Hong.

The launch will also complete Fox Sports Asian footprint, strengthening the broadcaster’s hand in rights negotiations, following the launch of the Fox Sports brand in Japan two years.

Growth In North Asia

Both are large markets where international broadcasters have made relatively little headway.

Nonetheless, they are key components for FIC’s growth plans in the region, notes the broadcaster’s president for APAC and the Middle East, Zubin Gandevia.

“On a macro level, if you want to hit it out the park, you’ve got to have these growth engines as well,” Gandevia tells Media Business Asia. “You can’t just depend on Southeast Asia, Taiwan, and so on.”

Japan is a far bigger market than Korea for FIC at present, although Gandevia is keen to push for further growth in both markets.

This means sprucing up FIC’s channels in Japan (including the launch of a new channel brand Fox Classics, replacing Fox Crime) while exploring scope to launch more linear channels in Korea.

OTT and branded SVOD represent additional distribution and monetization opportunities in both countries.

“There are opportunities in Japan as much as in Korea,” Gandevia says. “We have to grab both of those markets. We can’t afford to take our foot off the pedal anywhere.”

The tie-up with JTBC in Korea opens up the opportunity for more collaboration in the future, in sports as well as other genres.

“We have a long way to go to build out the business in Korea with the scale that we have in a Southeast Asia or a Taiwan,” Gandevia says.

“We are not present in all the categories we have in Southeast Asia for example. There’s more to build out and they will be a good partner for us.”

An ad-driven market

Korea, a market where almost all homes subscribe to pay-TV, is a tough market for new channels.

Pay-TV Arpu is low, making life harder for more premium channels without the ratings of more mass offerings in the battle for advertising.

Korea's TV ratings system used to direct ad buys remains heavily weighted to cable, although rising penetration of IPTV and uptake of VOD is driving much of the country's current pay-TV growth.

Nonetheless, Gandevia is optimistic on finding room for a few more strong channel brands from FIC as the distribution landscape evolves, citing the Fox Sports deal with JTBC as an example.

He is also open to using inorganic growth to shift development up a gear, should the right opportunities arise.

“In a market like Korea, where we are subscale, we will use our existing assets and others we have around us to build as much as we can, but if there ways to bolt on acquisitions, we will certainly look at that,” he says.

“But it has to be sensible, and work for us strategically and financially.”

New competition in sports

A more immediate priority is building momentum for JTBC3 Fox Sports.

FIC had already secured Korean rights for Bundesliga, Formula 1 and three of the four tennis grand slams, giving it enough critical scale to launch a sports channel in Korea – its first since SBS ESPN, when ESPN Star Sports was run as 50/50 JV with Disney in Asia.

Popular local and international rights will provide the foundation for JTBC3 Fox Sports, but Gandevia wants to bulwark the channel’s appeal with original programming, such as pre and post shows for major sporting events such as Bundesliga and Formula 1.

It’s part of an ongoing push for Fox Sports across the region, helping differentiate FIC’s sports play as regional competition increases from Eurosport, now with backed by Discovery, and BeIn Sports, poised to make a major push of its own after securing La Liga rights across much of the region.

FIC had La Liga rights in some key Southeast Asian markets, including Malaysia and Singapore.

Nonetheless, competition should help grow the pie for pay-TV and sports in particular within Southeast Asia, Gandevia muses.

“Hopefully, we’ve created enough entry barriers for ourselves,” he says.

“We’ve got full distribution, a well-known brand; all of our major properties are locked up by us for the next five to seven years, we have existing good partnerships with our platforms, and we have a healthy business line,” he adds.

“Somebody new will have to go after the content owned by the platforms or us, which will be an interesting dynamic to watch.”

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