Singtel’s long-awaited online video start-up now has a name, Hooq; two JV partners – Sony Pictures and Warner Bros, each with a 17.5% stake; and a distribution deal with Philippine telco Globe (part of Singtel’s associate network), all announced within the space of seven days.

The subs-based service will make its debut in the Philippines later this month after a big public launch yesterday, having secured a selection of library films and TV shows from local broadcasters and studios (ABS-CBN, GMA Network, Regal Entertainment and Viva Communications), to add to its extensive US portfolio from Sony and Warner.

Globe customers will be able to watch for 199 pesos (US$4.50) a month, about half the price of a basic cable TV package. Subscribers to Globe’s GoSurf and Tattoo broadband plans will also be offered Hooq as a bundled service.

All Filipinos, or at least those with access to a credit card, also have the option of a standalone service online.

With Hooq, Globe – the Philippines’ second-biggest telecoms company, 47% owned by SingTel – gets a ready-made video service as a value-add for its customer base, as well as a useful tool in its battle with market leader PLDT, plus a new way to drive broadband and data growth.

Broadband, still only 14% of Globe’s turnover in 2014, is the company's fastest growing business line.

The telco added 756,000 new customers over wireless and fixed-wireless networks last year, largely driven by aggressive bundling focusing on tablets and Wi-Fi, leveraging continued investment in network capital expenditure.

A REGIONAL BLUEPRINT

Hooq itself meanwhile should benefit with a basic cost-per-subscriber (CPS) deal for new customers, while Globe oversees marketing, subscriber acquisition and network functions, and assumes much of these costs, including bandwidth.

It’s a blueprint for launch in other Singtel markets over the next 12-18 months, including India (due in Q1), Indonesia and Thailand. Singapore is planned for next year.

There is a risk that Hooq’s growth becomes entirely anchored to the telco link in-market, which is all about hard-bundling of content with data (similar to the tie-up Avex has between NTT and Softbank in Japan).

In this context, Hooq’s revenue growth could be squeezed and breakeven periods extended as the venture looks to cover rising content costs, which include licensing fees for Hollywood content (Sony, Warner and potentially Disney in the future) as well as local fare.

For JV partners Sony and Warner Bros, Hooq offers a way to ratchet up licensing revenue from their sprawling libraries, while placing an entrepreneurial bet on the future of media consumption.

That said, it will be interesting to see how Sony balances Hooq’s interests as the SVOD service becomes more aggressive on rights, windows and local content.

In Asia, Sony already operates a US$850 million-plus TV channel and program sales business (estimate from Media Partners Asia), anchored to a large-scale enterprise in India with strong channels and syndication businesses across the region.

Too many cooks in the kitchen (echoing the early days of Hulu, up until 2013) can limit upside for an OTT video start-up.

SINGTEL's Gameplan

Singtel, the driving force behind Hooq, wants to be more than a toll collector in a world where over-the-top rivals, including well-resourced global players such as Facebook and Google, are establishing direct consumer relationships of their own, using Singtel’s pipes to do so.

Services such as Hooq can help Singtel maintain consumer relevance, providing it with access to valuable information that can be used to evolve its own services as well as develop new ones.

Singtel has also been investing in data analytics for example, which can help make Hooq subscribers more loyal, by helping them find videos they like to watch.

At the same time, success for Hooq will also keep data from video flowing through local networks where Singtel has sizable equity stakes.

Whether it all works out as planned, however, largely depends on the evergreen appeal of the local content Hooq has to offer.

Established free-to-air TV broadcasters and pay-TV networks with bigger content budgets are still going to end up with the most desirable first-run films and shows, at least for the foreseeable future.

How well local telcos promote the service can also weigh the odds in Hooq’s favor. They seem to be bearing the brunt of distribution and marketing costs, but may have the most to gain too.

As a result, Hooq will likely start life as a value-add for telco subscribers, rather than as a direct-to-consumer competitor to Netflix, the world’s biggest SVOD provider.

Netflix, which has focused on more setting up shop in more affluent markets so far (including Australia, Japan and New Zealand this year in Asia-Pacific), is accelerating its own international expansion, partly to offset its own burgeoning content bill with greater scale.

Hooq needs to dramatically extend its footprint too, to keep its content offering well-funded and appealing to consumers long-term.

INDIA could be NEXT

India, where content deals with the likes of Disney and Shemaroo are well advanced, should be next.

Success here, home to Singtel’s biggest associate company Airtel, with more than 200 million customers, will go a long way to securing Hooq’s long-term future. In this market, it appears that Hooq will initially focus on Bollywood movies and content.

Indonesia and Thailand – home to Singtel’s other major associates – could be tougher nuts to crack.

Big broadcast groups in Indonesia’s free-to-air oriented market are well positioned to co-opt broadband video consumption as it gains scale.

In Thailand meanwhile, the consumer appeal of paid offerings has declined as content owners and investors focus their energies on free satellite and DTT channels.

Other markets, including Singtel’s home of Singapore as well as Australia, where it has full control of Optus, can further broaden Hooq’s reach.

These however are medium-term concerns for Hooq’s management, led by Peter Bithos, former chief operating adviser for Globe.

None of the countries on Hooq’s near-term radar have well-developed SVOD marketplaces.

Developing these, in tandem with Singtel’s associate partners, will be a core priority. Some early wins will be critical, to keep associate telcos onside, as well as the boards at Singtel and its JV partners committed to investing in the core product.

Bithos will need to mix his telecoms experience with some entrepreneurial flair to steer Hooq on the road to long-term success.