Olivier Laouchez and James Ross
Q: I hear you have some announcements to make?
Laouchez: We have two big announcements to make. Firstly, we are going to launch a channel in South Korea on CJ which is one of the biggest cable operators. There are not many international channels now that are really getting access to the South Korean market. The second biggest announcement in fact; is we are going to change the name of TRACE Sports to TRACE Sports Stars to really show the faces that we put on the sports celebrities because just as the word sports can be very broad; you can have sports news and live sports, a lot of things in an environment where you have got hundreds of channels; we decided that the positioning will be extremely clear from the very first time you see the logo. So this is why the logo will evaluate for TRACE Sports Stars starting on 1st October. That will be for all our Asian partners, distributors and subscribers in Singapore, Indonesia, Malaysia, South Korea, Thailand, Philippines, Mongolia and India.
In another announcement also, last week we broke the 10 million subscriber mark in India. One thing that is also important: most channels are paying to get carriage in India to get distribution, but we are not paying. That means the distributors are really geared to get the channels; they really see the value of the channel in the sense that it is all complementary with their existing traditional sports channels. So it’s also a major breakthrough for us. We’ve got a very good local partner in India which is NDTV Group. They are very good with their distributions and they are very professional; so we have a great relationship with them and we are very happy with this new milestone and our development in Asia.
Q: Let’s start with CJ HelloVision, how did that deal come about and why South Korea?
Ross: Let me give a little bit of background on that: South Korea is a very tough market for foreign channels primarily because there is so much of great local talent now coming out of South Korea. And just like any country, they are focused on their own culture, programming and of course stuff that is in local language. We have been working very closely with a lot of operators there and to be honest with you, it’s been very tough; it takes time. I think CJ HelloVision has really seen the opportunity to deliver a channel in HD that is something different, unique and special. As Olivier already said, we don’t do sports news; we don’t do live sports. We do sports celebrities, lifestyle and entertainment; it’s all about the people; it’s all about the David Bechkhams, Roger Federers and Usain Bolts.
It’s fun; it’s a fun channel. CJ HelloVision which is one of the major cable operators in South Korea has just seen that opportunity. We’re very pleased to be partnering with them. They have 22 system operators under their control and so we’re going to have pretty wide distribution. So we’re very happy about that deal, actually.
Q: Since we’re talking about it being launched as a linear channel, what about VOD and OTT type of services. Is that something you’re going into?
L: Our model is a pay-TV model so we’re not going to launch on a free platform like OTT but obviously we are trying to get advantage of all the different distribution platforms. We can protect the pay-TV model and certain countries will be available on the OTT platforms which are paid-TV, OTT platforms. Tomorrow, if CJ wants to develop an OTT platform to carry TRACE Sports Stars on it, obviously we will be able to do it. We are using some existing YouTube platforms to promote the shows; we broadcast the short version of different programming on this platform so that it is more teasing of the channel. Unfortunately, right now you cannot make enough money with a free OTT platform. YouTube is great with the guy from South Korea-PSY. PSY made 25 million dollars but he had more than 1.6 billion worldwide views on YouTube on only 25 million dollars. You can imagine the number of clicks on YouTube. For us, all these platforms are very interesting and complementary for TRACE Sports Stars.
R: It already in Asia, in terms of some sort of mobile OTT things that we’re doing. We’re working closely with Maxis and Astro to deliver VOD content; a huge amount of VOD for the platform which is still Maxis but is operated by Astro in Malaysia. We’re delivering about 250 hours of content every year for that. Also going back to South Korea, we’re on another platform which is growing very quickly – tving, which is a mobile TV platform which delivers linear channels to a huge number of people now. It is also operated by the CJ Group; this is different from the CJ HelloVision. TRACE Urban and TRACE Sports are both carried on that platform as live mobile linear channels delivered to mobile. In South Korea, a lot of people watch TV on mobile than other places.
L: I think that one of the market maybe, Japan, where the mobile consumption of TV is the biggest because from the very beginning, they have very good bandwidth. They started the 4G before other countries. Their business model was quite affordable for people even if most the operators were losing money at the beginning. But it was more to educate the market, but the mobile usage. Especially now with the tablets and all the big smartphones, it’s really easier, cheaper than before to get access to the content. So, the smart phone is becoming a universal remote control to gain access to entertainment programmes.
Q: Where do you plan to replicate this mobile model across Asia? Are there any territories that you are also looking at?
L: Everywhere, potentially. As you know, Asia is a very big market with different cultures. Each country has got its specificities and particularities. So, we decided to be very agnostic; we go where we can see some opportunities. It really depends on the relationship that we manage and establish with the distributors. You know to negotiate with mobile operators; it can take a long time.
R: I think one of the things that we worked on with a lot of the operators already carrying TRACE in Asia, is the TV-everywhere principle. Pretty much local distributors or operators now that take rights: want that ability to deliver the channels on multiple platforms. One of the great things about the TRACE content is pretty much all of it is created by TRACE itself. TRACE controls all of the rights which very easily results in delivery across all the platforms. With all our friends whether they are cable operators like TrueVisions or TM Net or ABN in Malaysia or Singtel; all of these people; we’re working very closely with to deliver the TV everywhere rights and it’s working well.
Q: Where in Asia are you not distributed or not sufficiently distributed and would like to see more distribution?
R: I think we would like to be distributed more everywhere but we’re in eight countries, so we think that’s pretty good. And if you look at us comparatively against some of the other newer channels that are in the market, we’re actually doing very well. I think people would say to me well, we’re surprised you’ve got that amount of distribution. Of course, we want to be a multiple operator in multiple countries right across the region. We’re getting there, but it takes a little bit of time.
L: So, one of the key to also get more carriage and distribution is the localisation of the channel because of the different languages in Asia; you cannot use your English version everywhere. This is also something that we need to find a solution for each market. It is not always easy, it takes time, and sometimes it’s expensive. We’ve got Thai, Chinese and English so we’re getting there but this is also something that we need to discuss on this localisation being the key to get additional carriage. Out in China we’ve got a deal for the channel with CCTV, so we provide them some programming blocks. You know that we’re not allowed to distribute on any other channel, so we have this partnership with them.
R: I think one of the other important things about the development of TRACE Sports, particularly TRACE Sports Stars in Asia, is the growing of Asian stars that are competing in some of the global leagues. Whether it is football, baseball or basketball, we are seeing the growth of people from Korea, China and all over the region. And as more of those players become more successful in the global leagues, then we are seeing a lot more interest in the channel because as soon as you have some local connection with the global leagues, then that is when it becomes very special.
Q: Is there a concerted effort to shift programmes to include more Asian athletes?
L: Obviously, definitely. Even in certain countries: we did it recently in Israel, Turkey and we are going to do it in Russia. We create a localised channel not only for the languages but for the content where we took more local content and mixed it with our international content. It’s true that the more emotional connection that you’ve got with the sports people, the more you will watch the channel, but you need to reach a certain scale. As for the distribution, its concept is that you can really amortise this additional investment because this is additional investment. It’s really tough. Asia is very fragmented also; it is not always easy to make one channel for Thailand, Indonesia, Malaysia, Singapore and Hong Kong. We have to deal with this really tough market which makes it sometimes a little bit complex.
Q: You’re currently on a single feed?
R: At the moment, yes.
L: But with multiple dubbing or subtitles.
Q: Let’s talk about the rebrand from TRACE Sports to TRACE Sports Stars, why was this done?
L: Once you read the word sports; most people would think that this is a traditional sports channel with live sports and sports news but this is not TRACE Sports. TRACE Sports Stars is about sports celebrities; to know everything about their lives, lifestyle, and entertainment and behind the scenes; this intimate relation that we established with the sports people. So we wanted to give the positioning of the channel very clearly into the branding, the logo and the name of the channel. This is why after a few researches that we did and for us the one thing which is important: we want to have a big female audience for our channel, which is not the case for the traditional sports channel. And a lot of girls when they see sports; they see that this is not for me but this for my husband, boyfriend or brother; this is not for me. Now we move on to study this change a few weeks ago and all the territories. You’ve got a lot of interest from a female audience; that’s all sport stars; I’m interested in knowing more about David Beckham and then there’s Cristiano Ronaldo; all these guys. So we can really also broaden the audience; potential audiences to the channel; not only male audience but also female audience.
Q: So is it fair then to say that TRACE Sports should be competing in the lifestyle genre than a sports genre?
L: It’s a kind of a hybrid channel between lifestyle, entertainment and sports because the core thing is: we deal only with sports people, but it’s still more of a lifestyle and entertainment perspective. This is a discussion that we have with each carrier and operator to see based on their existing offer; where is the best place that we should put the channel. So in certain countries we are in the entertainment section or lifestyle section or sports section and sometimes in documentary but it is not a good place, I think.
R: In Singapore: for mio TV, we’re put as part of their entertainment block. And actually some of them were huge operators from around the world; similarly so if you look at BSkyB in the U.K; we’re in the entertainment plus package which is close to 10 million households. And the whole idea for them is to really drive interest, as Olivier says, in other products as well, and in other sports channels and bring a female and family audience into the deepest sports channel; this seems to be a very successful strategy both for us and for the operators.
L: Absolutely, I want to get to this point: Because of this emotional connection that we create with the sports people; especially for female audiences who were a little bit reluctant to see the live game; it’s not the same story; once you know the guy; when you see it on the pitch, on the ground; it’s a different relation. This attracts more people to subscribe to the premium package or sports package which are very expensive; this is key for the operators to get more subscriber’s attention and more money. So it’s also a kind of marketing tools for the operators, it’s really deal or no deal; everybody is getting something out of it.
Q: Who exactly is your core audience? And where do you think you would like to grow that audience base to?
O: Our core audience, based on our research, is 15 to 40 aged groups; we’re a little bit younger than the traditional sports channel. For the time being, we are 60 per cent male and 40 per cent female audiences. But we aim at being more or less 50/ 50; so this is it. I mean obviously you need to have a certain interest in the sports environment but not that much in fact; we never give the results, but we will say okay: who’s got the biggest salary, who’s got the biggest cars; the nicest house. These types of rankings are really interesting for the audience. So far, we get very good feedback from the different countries from where we are. We are already in 105 countries; in two years time, we managed to get about more than 30 million subscribers which for an independent group like us, is a major achievement.
Q: How much are you producing out of Asia right now, in terms of original productions?
L: Globally, we produce about 250 to 300 hours of content per year. Out of that, we must have about 20 to 30 hours from Asia; so it is about 10 per cent.
Q: Are you looking at doing more?
L: Yes, in fact, if we could localise the channel tomorrow; we can go up to 100 to 150 hours. But what is important also for the time being is the type of content that we do with Asian sports celebrities; not only will it be played (aired) in Asia but also all over the world. So it also gives exposure to your local sports people; it gives them global exposure. Whereas if tomorrow we do a localised channel, this local content might have the same exposure for the rest of the world.
Q: Any last things that you want to add?
L: One last thing that has nothing to do with sports; it has to do with a music proposition. We are going to introduce; hopefully next year; the most advanced personalized music channel in the world that we’ve been developing for the last three years. It is called MyTRACE; we’re in active discussion with a number of operators. The content adapts with your taste; so if you don’t do anything, it becomes a linear music channel: back-to-back music videos. But when you go there for the first time; it will do what we would call speed rating; the idea is that you will rate a number of music videos so that we know your taste. The more you do it; the more the recommendation engine will know about your taste and adapt to your taste.
MyTRACE on the iPad
Q: So you’re gathering data at the same time?
L: Absolutely. This is also connected to your Facebook; so if you have your music taste through Facebook connect; we interpret all this. We take different bases; so that we have a clear understanding of what you like.
R: The great thing about this is that it gives us the opportunity to add added value to pay TV operators. Pay TV operators all want new and innovative products delivered to their describers; particularly something that is interactive. Not only can you watch this on your iPad or phone but the idea is that; with the set-top boxes, as the technology grows and software upgrades go in; you can actually control a personalised music channel on your big screen or with your tablet. So you can, effectively; everybody in your family can have their own personalised music channel on TV; so that is the big picture!
Q: So it is non-linear then?
L: It is non-linear but also sometimes linear; you have a unique stream for yourself and you have a separate stream for yourself.
Q: It delivers a stream by default and it changes with your preference?
L: Exactly. If you want to listen to a specific music genre; you can go to a specific genre; if you are a big fan of hip-hop, you will only have hip-hop music. If you want to skip to another music video or if you want to stop the music video because you’ve got a phone call; you stop. If you also want to play; we created a few games.
R: It also gives you the opportunity to do background; different types of music as well. If you’re just having dinner at home; you just want fairly quiet soul or something relaxing; you can have that. If you want to have a party; you can have a party channel.
L: If you go out with your boyfriend or girlfriend, and you want to have a romantic evening; you can have only love songs. You can always also go on iTunes and buy the music video that you’re watching and you can share it on Facebook and Twitter; so there is also all the social elements that is quite important. It’s very easy in fact; in two minutes, everyone knows how to use it.
Genre selection options on MyTRACE
Q: So you have the social media component and the e-commerce component to it as well, how are you launching this?
L: So we are now in advanced discussion with some operators. We have got some set-top-boxes that can integrate that; that means it’s has the internet connection; they’ve got internet broadband bandwidth also because this requires quite a big amount of bandwidth.
R: We’re looking further ahead at Europe already.
L: We are launching it next month with Numericable which is the biggest cable operator in France. We are actually discussing with everybody in Asia from Singtel to Indovision to Foxtel. The music rights for that are also very specific; it is not a linear channel, it is not a VOD, it is not like Spotify; so it’s something different. So we had to develop more relations also with the record labels. Some of the biggest record labels are really interested so they would like to partner with us. We are having some discussions with Universal Music, we have got Sony; even with Microsoft, with the Kinect thing; the Xbox. If you do it like this, you don’t even have to touch the screen; to move for once. So that can go into the Xbox and the Playstation; we are discussing already.
Q: So you’re ready to launch this next year?
J: Next month, in Numericable which is the biggest cable operator in France.
There is a lot of enthusiasm particularly from people with the cable and broadband infrastructure. It is obviously more difficult to do it with the DTH. Although, as the DTH platforms roll out their own IPTV services like Astro is doing it, various other ones are doing it; there will be that connectivity to be able to operate with customers as well.
Q: Are music rights complicated?
R: We have been dealing with music rights for TRACE for many years so we have very good connections with Universal, Sony and all of the big labels.
L: But it is true that sometimes money will be granted in terms of all that. We found some solutions; they are very supportive. Now, the record labels; they want to use as many platforms as possible to sell their content. On the music streaming business; it is really growing very-very fast; so we will be a part of this growth. We are being very innovative and very simple to use; the user experience and the consumer experience is great. So I can tell you these are millions of dollars investments to get to this stage.
Speed Rating on MyTRACE
