Is the strategic partnership between CANAL+ and Viu enough for them to compete globally?

French broadcaster CANAL+’s recent investment of US$300m in Viu, PCCW’s pan-regional OTT video streaming service, has dominated headlines over the past week as PCCW is looking to expand the presence of Viu’s video streaming business across Asia, the Middle East and South Africa, as well as strengthening Viu’s offerings to compete with Netflix and other global streaming giants.

According to the PCCW, partnering with CANAL+ as an important strategic investor is a recognition of Viu’s position in the video streaming markets spanning Asia. With over 66 million monthly active users (MAU) and 12 million paid subscribers, Viu has been consistently ranked as the top video streaming platform in terms of MAU and second in terms of subscribers and streaming minutes amongst both global and regional players in Southeast Asia.

Furthermore, having established a robust dual model of advertising video on demand (AVOD) and subscription video on demand (SVOD), Viu recorded over US$250 million in revenue last year by offering premium regional and local content with language localisation, representing a growth of 36% year over year.

Industry players MARKETING-INTERACTIVE spoke to also agreed that the investment came as a strategic move by CANAL+. Antony Yiu, CEO of PHD HK said with the investment, both CANAL+ and Viu can expand their footprints beyond the existing markets in Asia. “This also allows Viu to tap into the content produced by CANAL+ to further increase its viewership with an even more diversified content that is only available on Viu,” he added.

Agreeing with Yiu was Kate Kwan, general manager, TEAM LEWIS Hong Kong, who said the deal is highly strategic, giving both parties some strong foothold in markets where a lot of synergy could be created.

She added:

Not only does it enable CANAL+ to enter Asia more efficiently, but also lands Viu on a more global platform. This is a great example of a "silk road" model in the online content market.

The US$300m investment by CANAL+ is stated to get Viu to a profitable operation. However, Ranga Somanathan, co-founder at RSquared Global Ventures and former CEO of Omnicom Media Group said this is a challenging task for Viu. “As content monetisation, especially when operating within closed ecosystem, is a challenge for OTTs, given the low CPMs and subscription fees in the region,” he added.

Can Viu or CANAL+ beat Netflix or other streaming giants with the new partnership? 

The strategic partnership undoubtedly contributes to a win-win situation as it helps Viu and CANAL+ expand their audience reach and diversify their content offerings. However, some industry players said it’s hard for both companies to compete with global streaming giants.

RSquared's Somanathan believed that Netflix is in a league of its own and will be hard for any regional operator, let alone global OTT to challenge. “Not only the early lead, sole focus and massive investments (in both western and Asian programming) that are made by Netflix, causing an entry barrier to other OTT players, the mindset for a long haul to profitability, or lack thereof, will hinder Canal+Viu’s ability to compete effectively at a global level,” he added.

On the other hand, it might be still early to tell whether Viu or CANAL+ can defeat global competitors with the new investment. PHD HK’s Yiu said the success or failure of each streaming service depends on the content and the pricing model that the streaming companies can charge the users. He added:

The content needs to be refreshed quickly and has to be uniquely available to Viu platform to increase the stickiness of it. I think the investment from CANAL+ will provide the much-needed cash for growth but whether Viu content is attractive enough to worldwide users is yet to be seen.

How would this affect the APAC video streaming market? 

From a wider perspective, CANAL+ tapping into the Asian video streaming market also indicates that the French company sees the huge growth potential for developing local content in Asia.

RSquared's Somanathan believed that CANAL+‘s foray into the region could potentially bring other global operators to APAC and this is an exciting development for the region. He added:

Scale exists in local language and the ability of streaming operators to create programming that reflects local nuances and produce it with international standards will unlock the potential of Asian content and give it a global platform.

After all, it all depends on how the streaming companies roll out their strategies and the content, as well as the pricing structure of it in each market. PHD HK’s Yiu said: “Producing unique original content that has a mass appeal does not come cheap and let’s see if the CANAL+ investment can help spearhead the content diversity to attract a wider range of customers,” he added.

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