With increasing numbers of pay-TV subscribers in Asia turning off imported shows in favor of local-language programming, staying relevant is a major concern for Ward Platt, the regional head of Fox International Channels (FIC).

FIC, the non-US broadcast arm of media major News Corp, already boasts an enviable local footprint in Asia-Pacific, with 36 channel brands running in 14 separate languages across 102 different feeds.

Following a major shake-up of News Corp’s regional TV business more than two years ago, the focus has been on winning over larger local audiences with dubbed or subtitled studio content.

This year however FIC is looking to add a different flavor of channel to its portfolio, based on Asian rather than US content, and launching first in countries where pay-TV penetration is low.

It’s a step into unfamiliar territory for the broadcaster, potentially ushering in a new cycle of media growth as well as competition.

“The idea of localization is evolving further,” Platt says. “In a market like Taiwan we produce local content and operate channels with tons of local content, but we weren’t doing that for a lot of other markets.

“Now we’re launching a channel in the Philippines that’s full of local content; we’re launching a channel in Indonesia which is full of local content.

"A lot of that’s acquired initially but over time, hopefully, we will produce more as well.”

Domestic hubs

Like News Corp’s local language channel business in India, Taiwan had been run independently of FIC in the past, but late last year was folded into FIC Asia, becoming one of Platt’s biggest markets overnight, just behind Japan, the largest in terms of revenue.

With Taiwan, Platt now oversees News Corp’s second biggest TV production center in Asia, turning out around 1,500 hours of original content each year, mainly light entertainment such as game shows and variety programs, though also including about 50 hours of drama.

With more than eight out of ten TV homes subscribing to pay-TV, and increasingly little to distinguish local and overseas channels, there are clear returns from an investment in local production in Taiwan.

At the same time, a transparent ad market based on ratings performance, rather than channel perception or existing relationships, makes it easy to translate viewership into ad revenue.

Different competitive and content dynamics apply in Southeast Asia, however.

Opaque ad markets

Pay-TV penetration levels are hovering at around 5% of TV homes in Indonesia, and at about 10% of TV homes in the Philippines, while ad rates are more open to negotiation, making it harder for new entrants to secure a slice of revenues.

Fox Filipino, based on library deals with the Philippines’ leading terrestrial broadcasters, has been received well so far with some affiliates carrying it ahead of a formal launch in April.

Overall prospects of success however are less certain than FIC’s entertainment channels in Taiwan.

“This channel might be popular from a viewing perspective, but it might not get a lot of advertising,” Platt ponders.“They might say that these shows were around on terrestrial two years ago, I don’t want to advertise on them. Who knows?

“There’s a lot of risk, but I think it will attract eyeballs. From that, we will get into local production over the next couple of years, and ideally turn the Philippines from a market where we acquire content to one where we produce content.”

A nimble strategy

Acquired content – local dramas for Fox Filipino, though a broader mix of dubbed Asian as well as domestic movies and series for the new channel in Indonesia – enables FIC to move quickly and at relatively low cost into high-growth markets where free-to-air general entertainment channels continue to soak up most of the new ad dollars flowing into the market.

Platt sees no reason to hold back on developing domestic production capabilities, with output building gradually over time.

“The plan is to build traction and start local production, hopefully as soon as possible,” he says. “No reason why we shouldn’t start within the next 12 months.”