Asia’s regional broadcasters have discovered - somewhat belatedly -
that local content is the key to growth. It’s a fact of life that people
are most interested in what’s happening closest to them. It is likely,
for example, that many of the people reading this article will do
business regularly in Asia, or at least be intending to start. I call
this ’the wardrobe syndrome’, an expression I stole from an English
media executive with whom I used to work when I first arrived in Asia
more than 11 years ago.
This young woman came from a small village near Manchester. Her brother
took a six-month trip around the world concentrating on Asia,
backpacking extensively through Micronesia, Borneo and the Philippines
as well as visiting the more traditional attractions of Thailand,
Singapore and Hong Kong. On his return, he went down to his local pub
and met up with his mates. They all eagerly asked him about his trip. He
launched into a detailed description of all the exotic places he had
visited, the sights he had seen and the many fascinating people that he
After he had been talking for about 15 minutes he became aware that his
friends’ eyes were glazing over. A minute later, one turned to the other
and said: ’I bought that wardrobe I was telling you about.’
The brother realised that his friends weren’t really interested in
hearing about the trip. It was outside their sphere of experience and
rather irrelevant. Perhaps they found the idea of all these strange
places threatening because of their unfamiliarity and remoteness.
This story simply serves to illustrate what everyone already knows. News
is more interesting when it’s from your own home, entertainment is more
relevant and fun in your own language, music tends to be more popular
when it’s local. All of these are, of course, sweeping generalisations,
but in the business of mass media what the masses want can make the
difference between success and failure.
Amazingly, the regional satellite and cable broadcasters who have been
setting up shop in Asia over the past ten years seem to have taken a
long time to grasp this elementary fact. They singularly failed to
understand that consumers predominantly want local content, or at least
a localised version of foreign content.
Between 1991 and 1996 there was an invasion of foreign broadcasters into
Asia-Pacific, each of them no doubt clutching their copies of Kagan
forecasts showing tantalising projections of exploding advertising and
Star TV, originally a homegrown broadcaster, launched in 1991 with five
channels, four of them originally in English. Hot on its heels came
Discovery, Asia Business News, CNBC, NBC, Cartoon Network, MTV, ESPN,
AXN, Bloomberg, Disney, MGM, Jet TV, Animal Planet and National
Geographic. This is by no means a complete list. One is reminded of the
’railway fever’ that gripped 19th century Britain when railways were
built in such a rush that in some cases no-one had checked the economic
viability of the proposed line.
In few cases were the broadcasters’ initial business objectives
Programme offerings were misguided and often of a poor quality.
Advertising revenues were significantly below expectations and, for many
channels, subscription revenues failed to take off.
Other significant factors included the high cost-base of locating
offices and people in Asia and the lack of any form of syndicated
audience measurement system. The fact that local cable operators had a
glut of channels to choose from - many competing directly with each
other, such as MTV and Channel V, ABN and CNBC and Discovery and
National Geographic - did nothing to help push up subscriptions.
It is also fair to say the regional broadcasters underestimated the
strength of Asia’s terrestrial channels. TVB in Hong Kong, for example,
has for many years enjoyed a formidable library of local content and
proprietary talent all broadcast in Cantonese - the local language of
Hong Kong and Guangdong. The hard reality hit the parent companies of
the Asian regional broadcasters in 1994-5. The result was a number of
closures and mergers.
MGM, Jet TV and NBC have all disappeared, ABN and CNBC have merged, as
has Star Sports with ESPN. Over the past four years there has been some
serious rethinking and the process has largely been driven by Star TV,
the grandfather of regional broadcasting in Asia.
When it launched in 1991, Star (Satellite Television Asia Region) was
owned by the Hong Kong-based Li family and was by any standards an
ambitious initiative, leaving many industry observers in awe of its
scale and vision.
The original concept would have been unlikely to succeed in the long
term, however. At its launch Star unashamedly targeted the top 3 per
cent of Asians with four English channels and one in Mandarin. The
channel line-up was BBC World, MTV, Prime-Sport, Star Plus and the
It soon became clear that such an elite audience would not support the
business and, when Rupert Murdoch bought Star in 1993, the localisation
process began in earnest. The most visible early sign of this was the
disappearance of MTV from Star after a dispute over content. Star wanted
a music channel with more local content but MTV disagreed. They went
their separate ways, with Star launching its own, more Asian-oriented
product, Channel V. MTV set up on its own and competes fiercely with
Channel V to this day.
Since 1993 Star has pursued its localisation strategy aggressively. It
has been particularly successful in maintaining headline channels such
as ESPN Star Sports and Channel V, while developing market-specific
This has allowed access to both local and regional budgets. Of the two,
it is local ones that are proving more lucrative.
Today Star has 36 feeds with localised versions of all the major
The strategy is succeeding to attract both viewers and advertisers. It
is through localisation that Star is coming closer to stemming many
years of heavy financial losses. In 1996 Star had around 600 advertisers
split roughly 50-50 local/regional. In 1999 it is believed to have more
than 900 advertisers with only 300 of these being regional. It is clear
that local budgets are now the priority at Star.
Localisation is, of course, a profound test of a product and is a very
expensive process to undertake. The economics make good sense
The size of the regional advertising cake that finds its way on to
television is estimated to be only worth between dollars 100-130 million
a year. Compare that with the local TV budgets across Asia which are
worth between dollars 8-9 billion.
It is no coincidence that the more successful regional broadcasters that
still survive in Asia are the ones with the most developed localisation
strategies. Discovery now has six feeds in Asia which provide local
output for a vastly diverse set of markets. Separate feeds go to China,
Japan, Australia, Taiwan, India and south-east Asia. MTV, CNN and CNBC
all provide local feeds for different markets and are enjoying varying
degrees of financial success as a result.
It appears, therefore, that after an extremely turbulent start that has
seen closures, redundancies and mergers - not to mention many bewildered
locals questioning the value of all these new foreign channels being
thrust upon them - the satellite and cable sector has matured into a
real business in Asia. One which can begin to compete effectively with
This is good news for advertisers, of course, who now have the choice of
a number of successful media outlets. Star’s mainland Chinese channel,
Phoenix, is just one example. In the 10 per cent of Beijing homes in
which it is received Phoenix is second in popularity only to CCTV1, the
leading government terrestrial service.
The TV executives who made the decision to go ahead with the launches of
many of these channels in the early 90s would have done better to
remember that Asia is the name given to the region by the Romans who
never came close to exploring all of it. It was simply a convenient
moniker to cover a huge and extremely diverse group of markets, many of
which had little in common with each other. An hour or two spent in
conversation with a Filipino, an Indian, a Singaporean or someone from
mainland China would have confirmed this unequivocally - and saved them
a lot of wasted time and money.