Interviewing HBO Asia CEO Jonathan Spink, one gets the amicable impression that he’d rather be doing business rather than talking about it. And it’s been a busy time for the CEO, with an ever–expanding portfolio of channels, now in dual–languages, and a slew of exciting new HBO Original content like The Pacific and True Blood season 3. “Why are we offering more channels? Because, as a pay–TV offering we have to provide value for money for our partners (the operators) who in turn are adding value for their customers, as well as encouraging new subscribers, with services like SVOD and HD. Offering more channels also goes hand in hand with operators’ increased capacity. There are a finite number of subscribers in markets like Hong Kong and Singapore, but that doesn’t make the competition for those subscribers any less intense. And in other markets there is significant room for pay–TV growth, as well as operators looking to differentiate their offerings with value–added services and premium offerings like HBO.” So, is there an increasing pressure on networks to launch more channels and venture beyond their traditional genre boundaries? “It is an admission that consumers have more leisure choices, more choice of everything, not just TV. And in some ways it is easier to put up extra channels when you have the existing infrastructure. But then our content isn’t cheap, we have our Originals, as well as a lot of premium first–run movies.” Asked whether the expansion of the channel bouquet was due to top–down pressure or was an initiative pushed from within the region, Spink said it’s been the latter. “The multiplex idea, when I first came in (to the job), it was all too hard, the studios wouldn’t go for it. The opposite proved true, the studios are happy with it,” especially as between the majors there’s such a huge inventory of content to programme multiple channels. He continues, “Screen Red is Asian, Asian movies are a very popular genre in the region. There are a couple of Asian movie channels out there so it’s a natural progression for us. Warner TV is slightly different – it’s owned by Warner Bros, we are the sales agent for that channel. Warner Bros is the single biggest, and strongest, producer of content, so it compares very favourably with the other general entertainment channels out there. (WB are) still producing more major shows than any other studio and they don’t have a home network in the US. Babyfirst TV is a bit of a learning curve for us,” he adds with a smile. Spink says there are other ways that the network in Asia is reaching out to the viewer, in partnership with the operators. Saturday and Sunday movies are now dual–language across English/Cantonese/Mandarin/ Bahasa depending on market. “We introduced this within the last few months, it definitely makes the channels more attractive. Regarding HD, HBO HD mirrors our HBO movie channel, the HD version of our SD service. We don’t think it’s right to charge customers more for that channel, if they’re already paying or it, we see it as a way to add value.” Are you worried about other new players, particularly movie channels, coming into the market? “We have first run access to the biggest Hollywood studios. We’re a profit centre for many operators as we split revenues with them. It’s a completely different model. Other movie channels will be on the basic tier, they become a cost rather than a revenue generator. HBO Originals are very expensive to make. The Pacific cost 100’s of millions of dollars, we’ve got Spartacus from Starz Media. We’re buying premium first–run product.” He continues, “We have stayed very close to our core business of movies. It’s becoming increasingly difficult to launch channels in Asia as there’s nothing out there that hasn’t already been done. Many operators are at full capacity, hence they are looking at other services like HBO and SVOD. Increasing their number of channels isn’t high on operators’ agendas. We launched Red even before we had any carriage deals, that’s how confident we were of the product. Unlike a number of channels that were supposed to be launching for the past 4 or 5 years.” HBO is also narrowing the windows on its Original content, bringing those top shows to Asian viewers much more quickly after they’ve aired in the US. The Pacific, for example, airs here only two–weeks after the States. True Blood 3 will also air in Asia only weeks, rather than months, after the US. Spink thinks two or three companies will continue to dominate in certain genres. “In my opinion nobody watches more than 10 channels, at the most 15 channels on a regular basis and they have their favourites within each genre. Viewers are creatures of habit, they know their destination channel for the content they seek and tend to stick to those. There’s a tendency to offer 100’s of channels, but people don’t watch 90–95 percent of the content on offer. People tend to have their favourite channel brands, one news, one or two GE, one sports, one movie, one documentary channel.” What about HBO Asia’s foray into advertising support, with some on–screen sponsorship by LG? “We will remain ad–free, (it’s not who we are) we have no intentions to carry on with it. HBO is ad–free in the US. We offer a premium service to customers. There is a demand for commercial free services and I think that demand will grow. It’s always been our philosophy not to interrupt the movies, people are increasingly fed up of adverts and commercials, especially if you’ve paid for the content. If you buy a box–set you can watch that uninterrupted. We ran a test, with little or no reaction so we’re not pursuing that route.” Overall Spink says that HBO’s and pay TV’s business is in good shape. “The pay TV business is robust, even in a recession, the business flourishes. We’ve not seen a drop–off in subscribers (except in Indonesia due to the failed Astro JV). And advertising has seen some growth in the region (for ad–supported networks). HD, SVOD have been slow to roll–out, Red has significant opportunities, in Taiwan for example, and Warner TV is rolling out. We are always looking at what else we can do to improve our offering, and boost our (operator) partners’subscriber base and JonathanSpink, CEO, HBO Asia revenues.”
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