Streaming 'Round the Globe
JumpTV’s Borakas believes that India provides a giant growth opportunity not only within mainland India, but also in the growing Indian diaspora around the globe. Expatriates in general make a great case for global content distribution, and JumpTV—with more than 250 channels from more than 70 countries—is a prime example of a company that is serving the needs of displaced viewers around the world.But until those expatriate populations are supported by broadband penetration and CDN expansion, MTV’s Rockwell forecasts that the "largest international growth digitally for MTV will come from the U.K., Germany, Japan, and Korea. While India is hopeful for MTV, infrastructure in the subcontinent has a long way to go."
Attempts
Some of our experts have first-hand experience hand-launching digital businesses in emerging markets, and their attempts provide us with priceless insights on challenges and lessons learned.
ESPN recently launched ESPN360 in Mexico with partner TelMex, the local ISP/national telco in the market. "We are looking to expand into South American markets and can hopefully leverage our television businesses there to strengthen our relationships with cable companies and telecommunications companies in the region," Rees says.
MTV also has tried to launch digital businesses in Latin America and has learned that dealing with ISPs and CDNs can be difficult at times in these regions. "Content caching is necessary for the end-user experience to be decent," says Rockwell, "and ISPs are sometimes state-run and unresponsive, and CDNs are not focused on these markets yet, adding to the difficulty of launching digital businesses in the area."
JumpTV has taken a bottom-up approach to building out its global business. Borakas tells us that "every channel [on their system] was cultivated on the ground. We work with our channel partners to help them extend their reach into the digital world."
Challenges
Several factors prevent streaming media companies from entering emerging markets. The biggest challenges include poor infrastructure in these markets to handle rich-media delivery, as well as a lack of sustainable business models necessary to justify market entry and investment.
There are also cultural challenges, both from an ethnic standpoint and from a corporate standpoint. "A disease that big media companies have is that they are not front-runners," says Gennadiy Borisov, a consultant on global digital media initiatives and former GM of MTV Ukraine. "They want someone else to prove it and then they’ll just go buy them out." Borisov also believes that you can serve current international markets with lower-quality streaming video that works within infrastructure constraints internationally but says that Wall Street and advertisers expect at least the level of video quality that exists in the United States. The lack of desire on the part of media companies to be first-movers in these markets, and high expectations for technology, make it hard for media companies to justify risks in international streaming markets.
Rights are also a major concern for several of the companies we interviewed. "When opening a new pipe into a market, you have to understand that the pipe needs to live well with the existing pipes in the market from a legal, economic, and emotional standpoint," says Rees. "Rights are still sold on a territorial basis. Combining territorial restrictions with global language and cultural and passion verticals makes for an extremely complicated rights matrix."
Borakas believes you can overcome the rights issues through a combination of technology and best-business practices. "Rights and geofiltering are extremely important for all stakeholders," he says. "At JumpTV, we have technology to help us with this. We also feel that we need to be mindful and respectful of our content partners’ traditional business models. Being transparent with our own model is one way to achieve this."