Hooq gets hyper-local for new Southeast Asia strategy

Hooq CEO Peter Bithos tells TBI how he is transforming the Singapore-based streamer from the ‘home of Hollywood’ to the home of hyper-localized content for emerging markets. Kaltrina Bylykbashi reports.

In what is now one of the most competitive SVOD environments in the world, Hooq – the WarnerMedia, Sony Pictures Television and Singtel–owned streamer operating in Southeast Asia and India – is looking to differentiate its service by targeting the hard-to-crack mainstream audience across emerging markets.

Based in Singapore, the streamer serves local audiences as well as those in India. But it is the emerging territories such as Indonesia, the Philippines and Thailand that it has recently set its sights on.

As Bithos (left) describes it, the audience Hooq is after makes at most US$350 a month, do not have a long-established culture of paying for content and are yet to see regular, high-quality episodic content that is localised.

“Most services [in Asia] are attempting to reach the iPhone customer base, and we’re going after the Android customer base, to put it simply,” says Bithos.

Apple’s iPhone is more likely to reach the quickly growing middle classes, like those more often seen in India and China. Android, in-turn, looks to a wider consumer base and entices them with a lower price point.

Creating a monetisable business model for such an audience is a “very hard challenge” and hasn’t been done yet according to Bithos. But since 2015, the company’s core aim has been, and continues to be, to adapt the common European/US-based monthly subscription model to work at scale in Southeast Asia.

While in pursuit of its goal, Hooq has been able to innovate on two significant fronts. The platform was the first in the world to offer download rights for its Hollywood content, ahead of regional competitors and the likes of Netflix and Amazon.

Hooq is also the first platform to have offered “sachet pricing”, giving audiences access to seven-day subscriptions since 2015. It continues to experiment with new ways of delivering content to consumers, recently introducing one-day packages in Indonesia for as low as US$0.25 cents.

“Monthly subscriptions in Southeast Asia don’t work,” says Bithos. “There will be days when the customer doesn’t have money, so our various packages across territories are an example of us addressing the needs of the market.”

Hooq’s most ambitious plan yet, however, is to offer 100% localised programming to these audiences – at the very least offering subtitling – and to create original, episodic content.

Building episodic

The “bulk” of content on Hooq’s service in emerging markets is a result of licensing. With access to Warner Bros. and Sony content, it holds titles such as The Flash, Supergirl, and The Big Bang Theory and brings them to new audiences.

But in Southeast Asia, the company has recently doubled its local content in certain markets. Across Indonesia, Thailand and the Philippines, local programming now accounts for more than 50% of viewing minutes, according to the company.

“Most of what we try to do is lead and differentiate with local. We have great Hollywood content, we have great regional content, but we’ve really doubled on local,” explains Bithos.

“I suspect the bulk [of content] will be licensing for some time, but we’re trying as fast as the ecosystem can allow, to shift to episodic originals. There’s a limit on how fast you can do that because there are not that many opportunities to produce great stories at scale in the region.”

Up until now, audiences in emerging markets have either relied on movies or high-volume series for entertainment, with very few limited series available from the region.

Hooq is attempting to shift these tastes by increasingly investing in local talent across the emerging markets and building out a library with more of these titles. It established talent development competition Hooq Filmakers Guild in 2017, leading to a new Indian original, Bhak (above), for the platform, and has ramped up its investment in originals as a result.

“Original content for us is one of our largest investment areas, from an incremental dollar perspective, so we want stories in Southeast Asia for Southeast Asia,” says Bithos.

Hooq currently has 30 original titles either on the platform or in the pipeline across the region. In Indonesia, these include 20 original movies, one drama series and two pilots.

A recent addition to the platform is Indonesian crime drama Brata (pictured, top), which is co-produced with telco Telkomsel, while movie original Marlina The Murderer in Four Acts (below) has already proven popular since its premiere in February.

The company will also roll out two movies in Thailand and two pilots for development in Singapore, in addition to the release of Bhak.

“We have to do a lot of different experiments. We have done co-productions with studios, telcos and directors, so we have lots of different business models that we’ve been trying,” adds Bithos. “We’ve also done hybrids where we launch a movie that we take to the box office, followed by episodic.”

For the second year in a row, Hooq will also launch a pilot from Hooq Filmakers Guild which encourages filmmakers, directors, producers and screenwriters to enter a competition scheme where they can win US$30,000 to produce a pilot.

Diverging strategies

Despite its investment in Bhak, Hooq’s strategy in India is shaping up to look quite different from that of emerging markets.

In the territory, Hooq is looking to be the prime destination for English-language content licensed from Hollywood studios. Its landmark partnership with Hotstar in October defines how different its approach is in the market, which is more developed in production and services, compared to Southeast Asia.

Under the deal, Hooq act as an OTT channel on Hotstar at no extra cost to the consumer. It will bring its wide library of series and movies from Warner Bros., Sony Pictures, Lionsgate and Miramax to Hotstar’s already packed portfolio of HBO, Fox and Disney titles.

“As of today, we’re on Vodafone, we’re on Airtel and there’s more coming. We have the largest Hollywood catalogue of any of these players,” says Bithos.

Hooq’s local-language strategy also differs here. Whereas in Southeast Asia all content is delivered in local language, it’s mixed in India. But even here Hooq aims to have all Hollywood titles dubbed in at least two or three regional Indian languages by the end of 2019.

“In many cases in India, many of the great Hollywood titles that you would know, like The Flash or Supergirl, may have never been seen in a local language like Tamil, Telugu or Bengali,” says Bithos. “So we’re out to change that and try and be one of the first players to highly localize deeply in all the territories we operate in.”

This shifting strategy could prove wise. India is a quickly maturing market with some stiff competition within its borders from Fox’s Hotstar and Viacom18’s Voot to Amazon and Netflix – which described extensive plans for the market during its third quarter earnings report this year.

Instead, Hooq has focused its streaming capabilities on Southeast Asia’s largest market, Indonesia. With 260m people to serve, the nation has become an attractive market for the company, where it has introduced a string of new offerings to serve its audiences.

Most recently, it launched a skinny bundle package, which will roll out regionally at a later date. This will mean the streamer will offer 20 pay-TV channels including Discovery Channel, Animal Planet, TLC, Dreamworks and E!, with local language subtitles across its premium offering.

Pay-TV penetration in Indonesia is very low, accounting for around 10% of its population. For the first time, many Indonesians will be able to access titles such as Keeping Up with the Kardashians or BattleBots, for as little as 25 cents a day – a first in the region.

“It’s not a bolt-on or an additional purchase; it’s part of the offering so that in addition to on-demand Hollywood content, you get 20 channels of pay-TV on your phone on any device. For the first-time millions of Indonesians have access to something they have never had access to before,” explains Bithos.

The move follows the launch earlier this year of Hooq’s freemium layer, with live streaming of nine Indonesian free-to-air TV channels in Southeast Asia’s largest market. Among the channels now provided are JakTV, MNC TV and RCTI.

The competitors

Hooq is using its efforts in the emerging spaces as a point of differentiation in a market that is developing at break-neck pace.

At the end of 2017, Ampere Analysis data across Asia showed that Hooq’s 2.6m subscribers were dwarfed by platforms such as iQiyi, which draws near 50.1m. Amazon and Netflix were also growing their presence in the region drawing 9m and 5.7m, respectively. Meanwhile, Hooq’s direct competitors iflix and Viu had 4.9m and 2.6m subscribers, respectively.

While Hooq frequently leads with new innovations, the streamer still has competitors snapping at its heels. It may be taking a step back in India, but its focus on Indonesia and lower-tiered price points are also becoming a target for other companies.

Netflix, in particular, has suggested that it will look at varied price points for the region, recently testing a cut-price mobile-only offering in Malaysia. In addition, in an interview with India’s Economic Times Netflix CEO Reed Hastings also expressed the desire to support content in Asia with more regional languages and storytelling styles.

But Bithos doesn’t see these platforms as competition quite yet. “We’re not trying to take on Netflix anywhere. They’re after very different customers than we are. We’re really after a mass-market play and they’re after high-end customers and that’s okay,” he explains.

“We’re more deeply local and way more differentiated in local content by a mile. We will never stop on that, so our belief is if you want to match the mass-market customer you have to have content that speaks to them and while we’ll always have great Hollywood content– and won’t try to differentiate there – we’ll try and differentiate with amazing local programming.”

In the meantime, Hooq will stick to its core territories until it has pinned down a business model that truly works for a mass-market Asian audience, according to Bithos.

“We’ve seen players go to 30-40 countries and do that before they have the right business model, which we think is a very foolish idea,” he says. “We’ve stuck to our knitting and we’re really interested in creating a consistent business where we are. We might see a future in Vietnam – it’s always been an important play in Southeast Asia – but we’re not rushing.”