As is the case with many topics, off the record discussion about joint venture strategy in-market proved much more interesting than the party line toed by many executives in their official responses. Obviously no-one can admit to having used a joint venture partnership as a short-term entry strategy, to get a foot in the door until the brand gains traction. Similarly no-one wants to bad-mouth an existing joint venture partner, even if it’s well-known to be an unhappy union and even if, in some cases, existing partners were being given notice at the same time as senior executives were painting a rosy picture of in-market marital bliss. And a reluctance to ‘go-it-alone’ by entering a new market without a strategic JV partner can be interpreted not only as a lack of real commitment to international strategy, but also as a lack of confidence in the strength of your channel brands. That said, the wisdom of joint ventures was also praised as common sense by some senior executives. “You’re basically sharing the risk, sharing the downside with a JV partner – but you’re also sharing the upside which means less revenue for your company,” said one regional network head. “JV’s also often mean tapping into your in-market partner’s infrastructure which, let’s face it, would be extremely costly to set up on your own for the entire region.” A&E Television Networks (AETN), which boasts The History Channel, History HD, Crime & Investigation Network and The Biography Channel amongst its channel brands, is quite ardent about its in-market JV strategy. But senior vice president international Sean Cohan previously admitted that the search, and the thoroughness of those searches, has in some part contributed to the network’s later entrance into Asia Pacific. That said, the network is rapidly gaining traction in the region, building on a long-term JV in Japan, having had JV’s in Korea and India, and having formed AETN All Asia Networks Pte. Ltd. (AAAN), a joint venture between A&E Television Networks (AETN) and ASTRO All Asia Entertainment Networks Limited – a subsidiary of ASTRO All Asia Networks plc. AAAN builds and operates branded channels and services across South East Asia, Hong Kong, Macau and Taiwan. Headquartered in Singapore, AAAN also has operations in Kuala Lumpur, Malaysia. Most recent news from AAAN sees new carriage deals in the Philippines and Papua New Guinea, and the appointment of a distribution representative in Thailand. Louis Boswell, general manager of AAAN, said, “Despite the current economic climate, AAAN is going from strength to strength. We program and distribute some of the best and strongest factual television brands, and we continue to see a strong demand for our channels throughout the region. I am delighted that we have achieved critical distribution in the Philippines and Papua New Guinea, and am pleased to say we are poised to announce additional launches in the near future.” In the Philippines, an agreement was signed with leading cable TV service provider, SkyCable, for AAAN’s full suite of channels. History, Bioand CI launched early March on SkyCable in Metro Manila, while History HD launches in April 2009. Earlier in February, separate agreements were reached with Cignal Digital TV to launch Bio, and with Dream DTH to launch History, CI and Bio on PMSI’s Dream DTH platform. In addition to these platforms, History, Bio and CI are distributed to cable operators throughout the Philippines by ACCION. In Papua New Guinea, Bio launched on HITRON on 1 March. Bio joins History and CI which are currently available on the platform. In Thailand, AAAN has appointed Triple T Network to distribute Bio and CI to cable operators in the territory. Currently, History is available in Thailand via True Visions through its cable and DTH platforms. History is now available in Brunei, Cambodia, Hong Kong, Indonesia, Malaysia, Philippines, Papua New Guinea, Singapore and Thailand. Bio is now available in Cambodia, Hong Kong, Philippines, Papua New Guinea and Singapore. CI is now available in Brunei, Cambodia, Hong Kong, Indonesia, Malaysia, Philippines, Papua New Guinea and Singapore. Asked about AETN’s international joint venture strategy, Sean Cohan said that partnerships, whether for distribution, content or advertising, are part and parcel of any network’s business. “By seeking local partners we are tapping into their infrastructure, their knowledge and relationships as well as their distribution clout. It also helps speed our time to market, as well as taking some of the risk (operational not just financial) out of the equation.” That said, Cohan does not rule out AETN taking its channels into a market without a local partner, “Different markets merit different approaches,” but he tends to deflect questions about the mitigation of risk – preferring instead to attribute JV strategy to cultural and regulatory motives. “Having a local partner helps hone our cultural sensitivities, but is often also a necessity due to regulatory constraints on foreign shareholders. Conducting due diligence on potential partners greatly diminishes your chances of things going wrong,” says Cohan. “It cuts down a lot of the risk; things haven’t yet gone south so we’ve either been lucky, or diligent! We constantly align agreements with our partners, managing expectation through consistent communications.” Interestingly, Sony Pictures Television International (SPTI) has decided to pursue two different strategies for two of its channels in one market, namely Korea, where AXN is a foreign retransmission channel while Animax is a JV. “The essence of each channel brand affects the strategy we pursue in launching the channel in each market,” explains Todd Miller, SPTI’s executive vice president and managing director, Asia. “With AXN, we are leveraging off a pan-regional feed and AXN’s top-notch English language programming and thus, distributing it for foreign retransmission was a better strategy for the channel. Animax, on the other hand, requires a tremendous amount of localization – from programming to local language dubbing – so we needed to obtain a South Korean partner in order to achieve this level of localization and to satisfy local regulations.” “It is crucial to find the right joint venture partner in each market and that is certainly not an easy task. We are very pleased to have found a supportive joint venture partner in SkyLife for Animax in Korea and I’m happy to say that the channel obtained its best ratings ever this past January. We have also found great local partners in other markets such as China, where we are quite fortunate to partner up with China Film Group in our production joint venture called Huaso.” One downside of being a foreign retransmission channel in Korea, however, is that advertising cannot be sold locally. “The advantage of being able to sell advertising locally is obviously the additional revenue stream it provides,” says Miller. “But as always, the flip side is that you will have to give up some ownership of your channel when setting up a JV to sell ads locally. All of these issues and options have to be considered before launching the channel in each territory.” Miller says the channels are doing very well, “AXN upgraded its Korean feed to HD from 1 March, (making it) the first channel and feed to do so in our bouquet. In the meantime, both AXN and Animax are now available on KT’s IPTV platform in addition to being available on SkyLife’s DTH platform. Animax in Korea continues to build momentum and is now one of the top ten channels on SkyLife’s platform out of a total of 90 channels.” So why do some networks choose to find in-market channel partners rather than going it alone? “Quite often it is not a choice for foreign channels to enter a market without setting up a local JV. And if that option is available, the choice of partnering up will depend on the strategy for each channel and channel brand as demonstrated with the different strategies we pursued for AXN and Animax in Korea. Government regulations notwithstanding, it is advisable to setup a local partnership in countries with complex government regulations and where a large amount of localization is needed for the channel,” says Miller. On CNBC Asia Pacific’s strategy on in-market JV’s in the region, the network’s president and managing director Jeremy Pink says that key local markets are determined that show growth opportunities in both viewership and revenue. “Then, we look for great partners with strong editorial and commercial reputations in each key market.” “Our two key partnerships have been thriving the past few years. In Japan, Nikkei-CNBC continues to grow distribution, and now reaches more than seven million homes in Japan. Nikkei-CNBC will debut HD studios in May this year. In India, our relationship with Network18 is also doing well. Both of our channels, CNBC-TV18 and CNBC-Awaaz, continue to dominate an ultra-competitive market and niche. Our partners are all our doing well, and we have strong commitments to all of them.” Continues Pink, “Most markets require local knowledge to understand their nuances and opportunities. For markets with sufficient scale, that local market knowledge is crucial to developing those opportunities. It depends on the market, but generally scale determines the necessity of a partnership. We feel there are opportunities globally, locally and regionally for CNBC, and local partners are a natural extension of the local play. And despite significant upheaval at MTV Networks International (MTVNI), president Bob Bakish has this to add on the network’s successful JV in the Indian market. “Our partnership in India with Network18 to create Viacom18 is about a long-term commitment to the Indian market to build the leading multi-platform entertainment organisation that serves audiences across multiple brands and demographics. The assets of each partner complement each other and support India’s robust TV and film production industry, as well as fuel the growth of digital media. In the year since the JV was created, we have seen each of our existing businesses (Nickelodeon, MTV & VH1) grow substantially to either strengthen their number 1 position (MTV, VH1) or challenge the number 1 player in their respective categories (Nickelodeon). In addition to this, our new general entertainment channel in India, COLORS, has performed tremendously well in the first six months to equal the market share of the category leader.” TVAplus