Online video play Viu, best known for its day-and-date Korean drama, continues to build up its Asian footprint, just over a year into a long-term gameplan to become a global service.

The app, backed by Hong Kong telco PCCW, went live in the Philippines this week, its sixth market in the region. Entry into its seventh, Thailand, should follow in Q1 next year.

Viu expanded rapidly after making its debut in Hong Kong in October 2015, launching in Singapore, Malaysia, India and Indonesia between January and May.

The ultimate aim is to become the number one Asian content offering in OTT worldwide, playing a central role in PCCW’s quest to diversify and grow its media revenues.

The telco, which also runs Now TV, Hong Kong’s largest pay-TV service, is investing in a free-to-air business at home, called ViuTV, as well as OTT video abroad to support future growth, steering these bets to break even within four to five years.

Executives are careful to keep monetization as well as growth plans on track, focusing Viu’s rollout on India and Southeast Asia for now.

It won’t be long before global platforms such as Netflix and Amazon Prime, already active in India and North Asia, start flexing their muscles in other Asian markets.

Meanwhile, other regional players are also stepping up Asian content investments, notably Hooq and Iflix, after launching with Hollywood-oriented catalogs.

PCCW Media Group MD Janice Lee is confident that Viu can sustain its early momentum.

The streaming service, notable for its freemium revenue model, has four million active monthly users across its free and paid tiers. Daily viewing in Southeast Asia averages between 1.2 and 1.6 hours.

“Our resources are put mostly on Asian rather than spreading ourselves too thin, and try to be everything to everyone,” Lee tells Media Business Asia.

“We will continue to be competitive in how we offer and acquire Asian content.”

COSTS IN CHECK

Content spend is in line with Viu’s revenue, Lee stresses, highlighting the speed with which Viu can air localized episodes of the latest dramas on its service, sometimes within four hours of the original telecast.

Success hinges on the product as well as the catalog, she argues, keeping costs in check with mostly non-exclusive content deals.

In time, local productions as well as regional formats from ViuTV should also make their way onto Viu, adding differentiation in the marketplace.

Meanwhile, Viu’s freemium model gives room to adapt to specific opportunities, Lee says.

Overall, subscriptions contribute 70% of revenue, all from direct-to-consumer deals. Pricing, as well as the balance between subs and ad revenue, varies by market.

Advertising is mainly centered around Hong Kong and Singapore for now.

“We are very focused on monetization,” Lee says. “We are showing our content partners that we are able to monetize their content better than many other players.”

In the Philippines, Viu is starting as a free service, continuing a launch strategy followed in other territories.

Local publisher Inquirer Group is on board to assist with ad sales and marketing.

For rival, mainly US-oriented SVOD services, wholesale telco distribution deals make up the lion’s share of paying subs in the Philippines at present, mirroring other markets.

Lee is banking on Viu’s predominantly Asian slate, together with free access and early window shows from Japan and Korea, to carve out an untapped segment in the market.

The initial focus will be on English localization, with 10,000 hours in the library at launch. Another 4,000 hours will be added in the first year.

Details of its paid tier, as well as distribution, will follow in due course.

A BROADER BASE

For now, Viu accounts for a minority slice of PCCW’s OTT business, which MPA projects will generate US$70 million in top line revenue this year.

Viu’s eight-year-old sibling Vuclip, a browser-based short-form service designed for 2G networks, contributes the bigger share for the time being. Its current footprint spans Africa and the Middle East as well as India and Indonesia.

Vuclip also has more room to expand in markets with constrained bandwidth worldwide, helping grow PCCW’s OTT business overall.

Meanwhile, revenue and profits are down at Now TV, the mainstay of PCCW’s media revenue today.

Moves into free TV and OTT show the company developing and broadening its media base.

“We segmentize now very clearly between pay, free and OTT, to show the new growth businesses but also be clear to the market where we are investing,” Lee says.

“We are always to open to strategic partners, whether on content or distribution."