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These are challenging times for pan Asian broadcasters. The economic downturn has meant that ad revenue targets will not be easy to meet. And for the action-oriented broadcaster AXN, this is more so with its parent Japanese electronics major Sony scaling back as it posted its first loss in many years. Sony Pictures Entertainment (SPE), however, is looking at opportunities to snap up assets in the Asian region that would come at an attractive price.
AXN, which launched in 1998 as an Asian channel, has grown in stature and moved to the matured markets, attracting male audiences. Localisation has also worked as a strategy.
In an interview with Indiantelevision.com‘s Ashwin Pinto, Sony Pictures Entertainment (SPE) Networks Asia senior VP, GM Ricky Ow elaborates on the channel‘s brand positioning, growth, challenges and expansion plans.
Excerpts:
Parent company Sony is scaling back due to a downturn in the global economy. How is this affecting SPE Networks Asia in terms of investing more in content and channels?
SPE Networks – Asia will continue to invest in content and channels because opportunities are presenting themselves in Asia. Especially during such tough economic times, people realise the need for television as an affordable form of entertainment. With the wave of TV digitisation starting to sweep through the region, there will be opportunities for us to grab some real assets in the new digital world.
What are the challenges that pan Asian broadcasters like AXN face in these tough times?
Firstly, there remains substantial revenue leakage through piracy. Secondly, competition continues to increase with more channels and choices entering the market. As audiences become increasingly fragmented with growing competition for their attention, business plans have to remain relevant.
In addition, new media offers opportunities for the brand to go beyond television – for content to be consumed anytime, anywhere, in many forms. At this time, however, all players in the industry are still in the race to find the perfect business model that will work for new media platforms.
Another challenge is that the English GEC genre is perceived to be used as a ‘snack‘ by viewers. How do you go beyond that and try to build stickiness?
It is a misconception that AXN offers ‘snack TV‘. Many of our shows are of an hour‘s length per episode and others are even two hours long. AXN programmes offer a destination to escape to. One of the reasons why we have remained as the dominant player in this genre is that we offer something different and viewers actually watch and follow, not just surf through our content.
When Sony launched AXN in India way back in 1998, it was to be an action and adventure channel for male audiences. To what extent have the objectives been achieved?
When Sony launched AXN in India back in 1998, it was the first action and adventure channel. We had set out to be the first to create such a genre, and to be the best. I think we have succeeded as we continue to offer the best today, even in the face of rising competition from channels trying to replicate AXN‘s successful model.
We also wanted to offer high quality English entertainment to audiences in India as well as the rest of Asia that is growing in sophistication and affluence. We felt that a channel with unique content of distinguished quality will not only excite the top end of the market, but also markets that are as a whole more mature, with viewers that are sophisticated and well-travelled. I believe that these goals have also been achieved today.
How has AXN evolved as a brand over the years?
AXN began as a high-end proposition. It was one that targetted affluent adults as well as children from affluent households. Since then, action and adventure as a genre has in many ways extended itself to mass markets because it is a universal language. With the viewership numbers that the action and adventure genre is delivering today, AXN is definitely not a niche channel, but a unique content destination with far wider appeal than we originally thought.
‘Investments of the earlier days into on-ground events, then into original programming, and more recently into the Action Awards, have all worked out well for AXN‘
What were the challenges AXN faced in establishing the brand?
AXN was blessed to have started out when competition was not that great in the market. A brand is made up of a brand promise and product fulfilment to the consumer. For AXN, our brand promises and product fulfilment have always been very closely aligned since its early days. In a lot of cases AXN over-delivered on brand promises, and that has had a long term positive impact as the channel has won over audiences‘ loyalty and affection.
The best evidence of that was seen during the ban on AXN in India some years back. Viewers missed AXN and wanted the channel back on TV. This was strong testimony that AXN has indeed done well as a brand.
Investments of the earlier days into on-ground events, then into original programming, and more recently into the Action Awards, have all worked out well for what AXN stands for.
AXN started as an Asian channel and then moved elsewhere. How far has it succeeded in this?
AXN was born in Asia and was then marketed around the world. This shows that quality channels need not always be created in the West or elsewhere and then parachuted into Asia. Sony had the belief and confidence we could launch a channel first in Asia, and then bring it around the world.
We have created original content like AXN Asia‘s The Amazing Race Asia. The reality race has been one of the most difficult to produce, and yet we have done well at it. In doing so, we have achieved our goal of creating original Asian productions which are good enough to be watched around the world.
AXN Asia‘s sister channel Animax, Asia‘s anime and youth entertainment channel, has also made breakthroughs. In 2009, Animax offered content in shortened broadcast windows, via simulcast deals with Japanese studios and broadcasters. Shows like InuYasha – The Final Act and Fullmetal Alchemist Brotherhood have been broadcast within the same week as the Japanese broadcast, and Tears to Tiara in a same-time-as-Japan simulcast. This has been a big step to ensure fans and viewers catch the shows on the channel and nowhere else.
AXN and Animax were among the first channels in the region to provide mobile offerings. Animax Mobile 3G streaming service was launched about two years ago, while AXN also had mobile-based content for its top shows. A highlight of AXN‘s mobile venture include exclusive video footage which was unavailable on TV, for The Amazing Race Asia in ‘The Host‘s Diary‘ where show host Allan Wu shared his thoughts and added to the entire show viewing experience for AXN viewers.
And on the marketing front?
On the marketing front, AXN prides itself on always being a challenger brand. We continue to view AXN as a challenger and are prepared to pursue innovative and creative marketing strategies to grab attention, but without offending the cultures, sensitivities and sensibilities of each market.
The ads that we have created over the years have always been outstanding, and can capture viewers‘ attention and excitement of the channel, but never offensive. We have been consistently doing so and AXN is one of the few TV networks in Asia that have pursued such aggressive marketing strategies.
In 2002-2003 AXN made a deliberate shift away from movies and focussed more on top line shows like Alias, 24. What factors prompted the move and how did this help in terms of ratings?
In 2002, AXN shifted in focus away from movies, but the channel continued to offer regular movie slots. The shift in focus was to ensure AXN had a richer variety in the programming mix that still offers action and adventure to our viewers.
Back then, drama series such as 24 and Alias were not as well watched as movies, but seeing that the quality of production in such series were as good as some movies, we were confident viewers would take to the new drama series on AXN.
Indeed, movies widen the overall reach of channels. However, our reduction in movies has not affected AXN‘s reach in this case; movies continued to be part of the programming mix. The increase in drama series offerings enhanced AXN‘s connection with viewers at the top end of the market. This is difficult to measure by ratings, but there are considerable viewers that AXN reaches out to. They are opinion leaders and trend-setters, and they demand such content.
AXN‘s ability to successfully market such drama series has also contributed to greater viewer ‘stickiness‘ to the channel. While a movie is a one-off show, drama series average 13-15 episodes per season, and that has worked to keep audiences coming back to AXN.
How big a role have local shows played?
We started off with local events and progressed to producing local shows, both of which added to the overall AXN experience. In recent years, AXN has focussed on regional or international shows that India is a part of. While such regional shows are not dedicated to India alone, these offer a totally different experience to Indian audiences. We will continue to produce more of such regional shows that will include India and the rest of Asia.
Local events, local shows and regional shows with local elements have all brought different types of experiences and enjoyment to Indian audiences. With India becoming an increasingly important market for everyone including SPE Networks – Asia, we expect to offer more of the three different initiatives – local events, local shows and regional shows – in time to come to provide even more connectors with AXN.
Is the localisation strategy the same across Asia?
Localisation strategies are very similar across Asia, but with some markets having more localised shows and others able to participate in the regional shows that AXN creates. In that regard, we have been able to rope all markets in, and offer the same AXN touch and feel across the region.
The economic downturn has helped SPE Networks – Asia as a whole to refine our plans. It has helped us re-set our priorities, re-evaluate our templates of success, and rethink if we can do things better. The economic downturn has definitely impacted us and everyone else, but we believe we can derive a positive outcome from it by re-examining what we assumed had worked in the past, and come up with new strategies to move forward.
How has AXN fine-tuned its localisation strategy this year?
We have invested in local productions such as the AXN Action Awards, and will be looking at opportunities that can bring a very different touch in original productions that are relevant to India.
In addition, we have introduced English subtitling in India to enable viewers who may not be used to some of the accents to still enjoy the shows on AXN.
What is the programming focus this year?
AXN has embarked on three major changes in 2009. Firstly, we have made aggressive efforts to introduce magic-reality programming in a big way, in India. We have brought two of the biggest magicians in the world – Criss Angel and David Blaine – to AXN viewers. These two are now household names not just in the U.S., but in Asia too. Coming up, AXN will be introducing another world-class magician in our brand new original production, called Cyril: Simply Magic.
All three have been some of the most sought-after street magicians. With Cyril, his exposure in India has been limited so far, but with the upcoming production, viewers can see for themselves his brand of magic.
In addition to the three magicians, we also premiered Breaking the Magician‘s Code. Unveiling the secrets behind the illusions and tricks, the show is able to really bring in both the high-end viewers as well as a wider audience base. I have high hopes that the series will do very well in India.
A second new initiative that AXN has embarked on is the expansion of AXN‘s reality block to three-hours. The key difference here is that a large number of channels are now offering reality programming that have been successful on AXN, but audiences still recognize that we brought them the original, and continue to do so, and hence viewers are still watching AXN. Anchoring this block are good shows such as So You Think You Can Dance? and the latest reality game show WipeOut, which is produced by the same team that brought on Fear Factor.
Thirdly, we have also increased our movie slots over the weekends to offer a wider appeal to audiences and broaden the viewership base.
To what extent have programming costs risen over the past couple of years with attempts to bring in the latest shows and seasons?
AXN has always been bringing first-run and latest seasons of shows to offer the newest and best programming from the US, Europe and around the world on our channel. This is not new as it is one of the key reasons why viewers continue to tune-in to AXN.
Indeed, the cost of programming has gone up over the years. But since this has been what we have been doing all along, the increased cost continues to be within our expectations.
Is new media going to play an important role for AXN in the coming two years like what it does in countries like Korea?
There is no doubt that new media will play an important role in the future. The Internet has already proven its importance with governments having won elections using the medium cleverly. The growth of mobile usage, with ubiquitous ownership of mobile phones and lines among the masses, make the mobile platform very attractive to marketers. However, we, like everyone else, are still figuring out the business model for new media platforms at this point in time.
New media adoption however, differs from market to market. Infrastructure, strategies, timelines, and market forces determine the rate of new media adoption in individual markets. Korea and Japan are leading at this point in time as early adopters of new media, while smaller markets like Singapore and Hong Kong are also ahead as these are smaller markets that offer ease of policy implementation and infrastructure establishment.
We believe that there will be a lot more experimentation with new media in the next few years as the world races to find solutions to tap into new media platforms. As for India, it continues to be a volume game due to the size of the market. We are optimistic that with the right pricing, consumers will be persuaded to use new media, and because of the size of the market, the returns can still be very attractive for firms. We believe that once the necessary infrastructure is in place, there could be an explosion in new media take-up in India.
In the US, CBS opened an upscale restaurant where fans can experience the brand. Would this concept work in India and Asia?
We certainly believe such a concept can work in India and Asia. In fact, we have been previously approached to set up AXN Cafés and Animax Cafés in the region.
We believe that with the right partners who have the necessary expertise, coupled with the right level of commitment they put behind our brands, such a business opportunity will prove an interesting proposition. We have had some discussions so far, but we believe we have yet to find the right partners at this point in time.
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