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Google brings Play Music to India; Spotify starts streaming in Japan

Power Forecast Briefing: As retirements accelerate, can renewable energy fill the gap?

2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Fundamentals View

2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Market Driven View

AVIA OTT Summit 2019 Offers Insight Into Changing OTT Roadmap


Google brings Play Music to India; Spotify starts streaming in Japan

TOP NEWS

*Alphabet Inc.-ownedGoogle Inc. launchedits Play Music service in India, NDTV reports.It offers individual songs and albums for purchase in genres such as Bollywood,Indian pop and international music, but does not yet include the subscriptionservice Google Play Music All Access or streaming support.

*Spotify Ltd. announcedits debut in Japan on an invitation-only basis before opening to all users inthe country. The Swedish music-streaming service also appointed Ichiro Tamaki,formerly Amazon.comInc. Japan's vice president of devices and Kindle content, to run SpotifyJapan as general manager.

PAN-ASIAN NEWS

*French commercial satellite launch service provider Arianespace SA is set to launchtwo satellites next week – one from Australia's , and one from the IndianSpace Research Organization. The Australian satellite will enhance high-speedinternet across the country, while ISRO's satellite will provide telecomsservices for India.

*U.S.-based smart business and home communications platform Ooma is relaunchingits Talkatone mobile app in nine Asian locations including Japan, South Korea,Singapore, Australia and New Zealand. Talkatone offersfree calling and texting services over Wi-Fi or mobile data.

*LINE Corp. isacquiring a 25% stake in up-and-coming rival Snow Corp., a South Korean mobilemessaging service, accordingto a press release. LINE said it wants to capitalize on the growing popularityof Snow's selfie picture and video app, which allows users to include stickersand filters in their images.   

*Time WarnerInc.-owned Warner Bros. Japan LLC and Toho Co. Ltd. will co-producea live-action version of manga comic "Jojo's Bizarre Adventure," accordingto a tweet from the Warner Bros.Entertainment Inc. unit. The film companies announced the projectat a press event in Tokyo, adding that the movie, directed by Takashi Miike,will be the studios' first joint production. It is expected to be released nextsummer.

*Japanese advertising agency Dentsu Inc. announcedthat its global business unit acquired French web analytics company WasabiAnalytics SAS. Dentsu Aegis Network Ltd. aims to use the takeover to strengthenDentsu Group's digital footprint in France.

*Apple Inc.'s Koreanunit will launch the iPhone 7 series on Oct. 21 in South Korea, pendingapproval of the company's U.S. headquarters, ET News reports. The launch willreportedly lead to fierce competition with the country's other leading premiumsmartphone models, the Galaxy Note 7 by Samsung Group's SamsungElectronics Co. Ltd., and the V20 by

*South Korean telco SK Telecom Co.Ltd. and QualcommInc. announceda successful trial of Enhanced Licensed Assisted Access (eLAA) technology. Itenables faster data transfer by combining LTE and Wi-Fi frequencies, andcreating a wider data pipe by combining licensed and unlicensed spectrum.

*Samsung Electronics is partnering with major Korean banks such as Woori,Shinhan, KEB Hana and KB Kookmin as well as leading credit card companies forthe Galaxy Note 7's iris-recognition feature, Yonhap News Agency reports.The smartphone model includes Samsung Pass, a security system that connects tomobile finance services through iris recognition.

*South Korean telco KTCorp. announced its "Giga-internet 2.0" strategy, OSEN reports. The company willreportedly invest 4.5 trillion Korean won to provide high-speed internetnetworks to 9.5 million households in 27,000 apartment housing districts aroundthe country.  

,HONG KONG AND TAIWAN

*Chinese online ticketing company Weying Technology launched NextainmentPictures and Nextainment Distribution to produce and distribute original filmand TV content, Variety reports.The first slate of projects include an animated movie with a budget of US$9million, and a comedy produced by and starring Chinese actor Ge You.Weying is partly backed by Tencent Holdings Ltd.

*Hong Kong-based newspaper South ChinaMorning Post, owned by Alibaba Group Holding Ltd., confirmed that its freeEnglish-language lifestyle periodical HKMagazine will cease production on Oct. 7 after 25 years of publication,Hong Kong Free Press reports.A spokesperson said the move was due to challenging market conditions and avolatile advertising environment.

*LeEco appointedRob Chandhok, formerly a senior vice president at Qualcomm, as chief researchand development officer at the Chinese tech company's North American office.Chandhok also previously served as president and COO at -owned .

*Toronto-based e-reading service provider Rakuten Kobo Inc. launched itseBookstore in Taiwan, Telecompaper reports.The Taiwan store will provide e-books about travel, lifestyle and business, inaddition to traditional Chinese titles. Rakuten Kobois also partnering with Taiwanese publishers to offer Chinese-language digitalbooks to users worldwide.

SOUTHEAST ASIA

*BlackBerry announceda joint venture with Indonesiantelco PT Tiphone Mobile Indonesia Tbk to produce and promote its Android-basedphone in Indonesia, Info Komputer reports.The JV, called PT BB Merah Putih, will enable BlackBerry to meet Indonesiangovernment requirements for its handset, which must include at least 30% localcomponents.

*China-based Tencent Group, owner of the WeChat messaging app, launched WeChatPay in Thailand, Prachachatreports.The new mobile payment app poses direct competition to Alibaba-affiliatedpayment platform AliPay InternetTechnology Co. Ltd.

*State-owned PhilippineAmusement and Gaming Corp., or PAGCOR, rejected gaming technology service providerPhilweb Corp.'s proposal to establish a mobile-based lottery platform projectedto earn as much as 100 billion Philippine pesos in annual revenues, the Philippine Daily Inquirer reports.PAGCOR chair Andrea Domingo cited the government's current policy of keepinggambling inaccessible to lower income brackets.

*Twitter Inc.'sIndonesia arm launched a new feature called Kemala, to allow Indonesiancitizens to connect with the government, Kompas reports.Kemala enables people to send communications and complaints via the socialmedia platform to be assessed by the government.

*Google Inc. launched the Indoor Street View feature for Google Maps inThailand, accordingto Krungthep Turakij. The feature isreportedly available in 15 malls in the country and is expected to helpincrease the number of visitors to some of them by 10% to 15% in six months.

*The Thai Central Administrative Court decided that the will not have to compensate RS InternationalBroadcasting Sport Management Co. Ltd. any further, Prachachat reports.The NBTC already paid 369.85 million Thai baht to RS for airing 64 FIFA WorldCup 2014 games on free TV at the regulator's request.

*Indonesian telco PT XL AxiataTbk hired a new president commissioner, Muhammad Chatib Basri,replacing Muhammad Radzi bin Haji Mansor, Viva News reports.Chatib Basri served as Indonesia's minister of finance from 2013 to 2014.

*Girnar Software, or GirnarSoft, an Indian software and mobile apps developmentcompany, partnered with PT Kreatif Media Karya, or KMK Online, a subsidiary ofIndonesian media group PT Elang Mahkota Teknologi, to introduce an automotivee-commerce platform called Oto.com, e27 reports.The platform will connect customers with automotive manufacturers anddistributors.

AND NEW ZEALAND

*Netflix Inc.ordered a newanimated comedy, "Pacific Heat," from Australian company Working DogProductions. The streaming company reportedly ordered 13 episodes of theseries, which will premiere in late 2016 in Australia with as its television partner.

*Melbourne sports radio station 1116 SEN is partneringwith Golf Australia's AO Radio, with SEN managing production of the broadcastof the Australian Open Golf 2016 tournament. The Australian radio broadcasterwill also provide on-air talent and simulcast components of AO Radio intoMelbourne free-to-air during the tournament.

* AndrewBackwell resigned from his position as managing director of programming andproduction at Australia's NineNetwork, TV Tonight reports.He is scheduled to depart at the end of October. Backwell, according to theNine EntertainmentCo. unit, will "pursue new career opportunities," and hisresponsibilities will be divided among several Nine executives.

AND SOUTH ASIA

*Swedish mobile telecoms equipment maker Ericsson AB is in discussions with Indian telcos todeploy video optimization technologies, TheEconomic Times (India) reports.Ericsson already deployed a similar set of solutions for Indian telco giantBharti Airtel Ltd.,sources told the newspaper. Airtel declined to comment on the matter.

*Facebook Inc. isworking with the Indian government to search for alternatives to its FreeBasics program, The Financial Expressreports.The program was shut down after India's telco watchdog operators from charging varyingrates for internet connectivity.

*Dhaka-based software and digital media firm Tradeshi is now Alibaba'se-commerce partner in Bangladesh, The Daily Star reports.The companies entered into an agreement that sees local e-commerce firmspurchasing or selling products through Alibaba after signing deals withTradeshi.

FEATURED NEWS

: Spotify is in advancednegotiations to acquire Berlin-based SoundCloud, while HBO Nederland willshutter its service on Dec. 31.

:National Amusements, which controls 80% of the voting shares in Viacom and CBSCorp., asked the two companies to consider a potential merger, whileAmazon.com, Alphabet's DeepMind/Google, Facebook, IBM, and Microsoft joinedforces to work on artificial intelligence technologies.

: Panelists at the recent Holographic Summit in Londonseemed hopeful about new mobile technology from Google and its ability to spurVR adoption.

: While content choices continue toproliferate across multiple platforms, Sony's free streaming service Crackle iscarving out a place for itself.

: During a two-day industry conference,Tinseltown professionals assessed the health of the movie-theater business,with bears citing low admissions and the need for alternative windowing.

: After reaching a number ofgoals during its inaugural season with ELEAGUE, Turner Broadcasting and WME/IMGare revamping the circuit's sophomore campaign to enhance interest in theeSports organization.

: S&PGlobal Market Intelligence presents a weekly rundown of executive changes inthe media and communications industries.

FEATURED RESEARCH

: Issue No. 405, published September 2016.  

: Multichannel providers, led by AT&T,expanded 1 Gbps availability over the past year; their offerings, however,remain far shy of being universally available.

: Comcast gave some indicationof how big an impact the Olympics may have had on other cable networks notshowing the games at the Goldman Sachs 2016 Communacopia Conference.

Joji Sakurai, Sunny Um, EmilyLai, Wil Hathaway and Kevin Osmond contributed to this report. The Daily Dosehas an editorial deadline of 7 a.m. Hong Kong time. Some external links mayrequire a subscription.


Watch: Power Forecast Briefing: As retirements accelerate, can renewable energy fill the gap?

Mar. 19 2019 — Steve Piper shares the outlook for U.S. power markets, discussing capacity retirements and whether continued development of wind and solar power plants may mitigate the generation shortfall.

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Credit Analysis
2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Fundamentals View

Mar. 15 2019 — On November 20, 2018, a joint event hosted by S&P Global Market Intelligence and S&P Global Ratings took place in London, focusing on credit risk and 2019 perspectives.

Pascal Hartwig, Credit Product Specialist, and I provided a review of the latest trends observed across non-financial corporate firms through the lens of S&P Global Market Intelligence’s statistical models.1 In particular, Pascal focused on the outputs produced by a statistical model that uses market information to estimate credit risk of public companies; if you want to know more, you can visit here.

I focused on an analysis of how different Brexit scenarios may impact the credit risk of European Union (EU) private companies that are included on S&P Capital IQ platform.

Before, this, I looked at the evolution of their credit risk profile from 2013 to 2017, as shown in Figure 1. Scores were generated via Credit Analytics’ PD Model Fundamentals Private, a statistical model that uses company financials and other socio-economic factors to estimate the PD of private companies globally. Credit scores are mapped to PD values, which are based on/derived from S&P Global Ratings Observed Default Rates.

Figure 1: EU private company scores generated by PD Model Fundamentals Private, between 2013 and 2017.

Source: S&P Global Market Intelligence.2 As of October 2018.

For any given year, the distribution of credit scores of EU private companies is concentrated below the ‘a’ level, due to the large number of small revenue and unrated firms on the S&P Capital IQ platform. An overall improvement of the risk profile is visible, with the score distribution moving leftwards between 2013 and 2017. A similar picture is visible when comparing companies by country or industry sector,3 confirming that there were no clear signs of a turning point in the credit cycle of private companies in any EU country or industry sector. However, this view is backward looking and does not take into account the potential effects of an imminent and major political and economic event in the (short) history of the EU: Brexit.

To this purpose, S&P Global Market Intelligence has developed a statistical model: the Credit Analytics Macro-scenario model enables users to study how potential future macroeconomic scenarios may affect the evolution of the credit risk profile of EU private companies. This model was developed by looking at the historical evolution of S&P Global Ratings’ rated companies under different macroeconomic conditions, and can be applied to smaller companies after the PD is mapped to a S&P Global Market Intelligence credit score.

“Soft Brexit” (Figure 2): This scenario is based on the baseline forecast made by economists at S&P Global Ratings and is characterized by a gentle slow-down of economic growth, a progressive monetary policy tightening, and low yet volatile stock-market growth.4

Figure 2: “Soft Brexit” macro scenario.5

Source: S&P Global Ratings Economists. As of October 2018.

Applying the Macro-scenario model, we analyze the evolution of the credit risk profile of EU companies over a three-year period from 2018 to 2020, by industry sector and by country:

  • Sector Analysis (Figure 3):
    • The median credit risk score within specific industry sectors (Aerospace & Defense, Pharmaceuticals, Telecoms, Utilities, and Real Estate) shows a good degree of resilience, rising by less than half a notch by 2020 and remaining comfortably below the ‘b+’ threshold.
    • The median credit score of the Retail and Consumer Products sectors, however, is severely impacted, breaching the high risk threshold (here defined at the ‘b-’ level).
    • The remaining industry sectors show various dynamics, but essentially remain within the intermediate risk band (here defined between the ‘b+’ and the ‘b-’ level).

Figure 3: “Soft Brexit” impact on the median credit risk level of EU private companies, by industry.

Source: S&P Global Market Intelligence. As of October 2018.

  • Country Analysis (Figure 4):
    • Although the median credit risk score may not change significantly in certain countries, the associated default rates need to be adjusted for the impact of the credit cycle.6 The “spider-web plot” shows the median PD values for private companies within EU countries, adjusted for the credit cycle. Here we include only countries with a minimum number of private companies within the Credit Analytics pre-scored database, to ensure a robust statistical analysis.
    • Countries are ordered by increasing level of median PD, moving clock-wise from Netherlands to Greece.
    • Under a soft Brexit scenario, the PD of UK private companies increases between 2018 and 2020, but still remains below the yellow threshold (corresponding to a ‘b+’ level).
    • Interestingly, Italian private companies suffer more than their Spanish peers, albeit starting from a slightly lower PD level in 2017.

Figure 4: “Soft Brexit” impact on the median credit risk level of EU private companies, by country.

Source: S&P Global Market Intelligence. As of October 2018.

“Hard Brexit” (Figure 5): This scenario is extracted from the 2018 Stress-Testing exercise of the European Banking Authority (EBA) and the Bank of England.7 Under this scenario, both the EU and UK may go into a recession similar to the 2008 global crisis. Arguably, this may seem a harsh scenario for the whole of the EU, but a recent report by the Bank of England warned that a disorderly Brexit may trigger a UK crisis worse than 2008.8

Figure 5: “Hard Brexit” macro scenario.9

Sources:”2018 EU-wide stress test – methodological note” (European Banking Authority, November 2017) and “Stress Testing the UK Banking system: 2018 guidance for participating banks and building societies“ (Bank of England, March 2018).

Also in this case, we apply the Macro-scenario model to analyze the evolution of the credit risk profile of EU companies over the same three-year period, by industry sector and by country:

  • Sector Analysis (Figure 6):
    • Despite all industry sectors being severely impacted, the Pharmaceuticals and Utilities sectors remain below the ‘b+’ level (yellow threshold).
    • Conversely, the Airlines and Energy sectors join Retail and Consumer Products in the “danger zone” above the ‘b-’ level (red threshold).
    • The remaining industry sectors will either move into or remain within the intermediate risk band (here defined between the ‘b+’ and the ‘b-’ level).

Figure 6: “Hard Brexit” impact on the median credit risk level of EU private companies, by industry.

Source: S&P Global Market Intelligence. As of October 2018.

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  • Country Analysis (Figure 7):
    • Under a hard Brexit scenario, the PD of UK private companies increases between 2017 and 2020, entering the intermediate risk band and suffering even more than its Irish peers.
    • Notably, by 2020 the French private sector may suffer more than the Italian private sector, reaching the attention threshold (here shown as a red circle, and corresponding to a ‘b-’ level).
    • While it is hard to do an exact like-for-like comparison, it is worth noting that our conclusions are broadly aligned with the findings from the 48 banks participating in the 2018 stress-testing exercise, as recently published by the EBA:10 the major share of 2018-2020 new credit risk losses in the stressed scenario will concentrate among counterparties in the UK, Italy, France, Spain, and Germany (leaving aside the usual suspects, such as Greece, Portugal, etc.).

Figure 7: “Hard Brexit” impact on the median credit risk level of EU private companies, by country.

Source: S&P Global Market Intelligence. As of October 2018.

In conclusion: In Europe, the private companies’ credit risk landscape does not yet signal a distinct turning point, however Brexit may act as a pivot point and a catalyst for a credit cycle inversion, with an intensity that will be dependent on the Brexit type of landing (i.e., soft versus hard).

1 S&P Global Ratings does not contribute to or participate in the creation of credit scores generated by S&P Global Market Intelligence.
2 Lowercase nomenclature is used to differentiate S&P Global Market Intelligence credit scores from the credit ratings issued by S&P Global Ratings.
3 Not shown here.
4 Measured via Gross Domestic Product (GDP) Growth, Long-term / Short-term (L/S) European Central Bank Interest Rate Spread, and FTSE100 or STOXX50 stock market growth, respectively.
5 Macroeconomic forecast for 2018-2020 (end of year) by economists at S&P Global Ratings; the baseline case assumes the UK and the EU will reach a Brexit deal (e.g. a “soft Brexit”).
6 When the credit cycle deteriorates (improves), default rates are expected to increase (decrease).
7 Source: “2018 EU-wide stress test – methodological note” (EBA, November 2017) and “Stress Testing the UK Banking system: 2018 guidance for participating banks and building societies”. (Bank of England, March 2018).
8 Source: “EU withdrawal scenarios and monetary and financial stability – A response to the House of Commons Treasury Committee”. (Bank of England, November 2018).
9 As a hard Brexit scenario, we adopt the stressed scenario included in the 2018 stress testing exercise and defined by the EBA and the Bank of England.
10 See, for example, Figure 18 in “2018 EU-Wide Stress Test Result” (EBA November 2018), found at:https://eba.europa.eu/documents/10180/2419200/2018-EU-wide-stress-test-Results.pdf

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2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Market-Driven View

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Credit Analysis
2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Market Driven View

Mar. 15 2019 — On November 20, 2018, a joint event hosted by S&P Global Market Intelligence and S&P Global Ratings took place in London, focusing on credit risk and 2019 perspectives.

Giorgio Baldassarri, Global Head of the Analytic Development Group, and I provided a review of the latest trends observed across non-financial corporate firms through the lens of S&P Global Market Intelligence’s statistical models.1 In particular, Giorgio focused on the analysis of the evolution of the credit risk profile of European Union companies between 2013 and 2017, and how this may change under various Brexit scenario; if you want to know more, you can visit here.

I started with an overview of key trends of the credit risk of public companies at a global level, before diving deeper into regional and industry sector-specific performance and pointing out some key drivers of country- and industry-level risk. Credit Analytics Probability of Default (PD) Market Signals model was used to derive these statistics. This is a structural model (enhanced Merton approach) that produces PD values for all public corporates and financial institutions globally. Credit scores are mapped to PD values, which are derived from S&P Global Ratings observed default rates (ODRs).

From January 2018 to October 2018, we saw an increase in the underlying PD values generated by PD Market Signals across all regional S&P Broad Market Indices (BMIs), as shown in Figure 1. For Asia Pacific, Europe, and North America, the overall increase was primarily driven by the significant shift in February 2018, which saw an increase in the PD between 100% to 300% on a relative basis. The main mover on an absolute basis was Latin America, which had a PD increase of over 0.35 percentage points.

Figure 1: BMI Benchmark Median credit scores generated by PD Market Signals, between January 1 and October 1, 2018.

Source: S&P Global Market Intelligence. As of October 2018.

Moving to the S&P Europe BMI in Figure 2, we can further isolate three of the main drivers behind the overall increase in PDs (this time measured on a relative basis), namely Netherlands, France, and Austria. Among these, the Netherlands had the most prominent increase between August and October. Again, one can identify the significant increase in the PDs in February, ranging from 150% to 230%, across all three countries. Towards July, we saw the spread between the three outliers shrink significantly. In August and September, however, the S&P Europe BMI began to decrease again, whilst all three of our focus countries were either increasing in risk (Netherlands, from a 150% level in the beginning of August to a 330% level at the end of September) or remaining relatively constant (France and Austria).

Figure 2: European Benchmark Median PD scores generated by PD Market Signals model, between January 1 and October 1, 2018.

Source: S&P Global Market Intelligence. As of October 2018.

In the emerging markets, Turkey, United Arab Emirates (UAE), and Qatar were the most prominent outliers from the S&P Mid-East and Africa BMI. As visible in Figure 3, the S&P Mid-East and Africa BMI saw less volatility throughout 2018 and was just slightly above its start value as of October. Two of the main drivers behind this increase were the PDs of the country benchmarks for Turkey and the UAE. Turkey, especially, stood out: the PD of its public companies performed in line with the S&P Mid-East and Africa BMI until mid-April, when it increased significantly and showed high volatility until October. On the other hand, the benchmark for Qatar decreased by over 60% between May and October.

Figure 3: S&P Mid-East and Africa BMI Median PD scores generated by PD Market Signals, between January 1 and October 1, 2018.

Source: S&P Global Market Intelligence. As of October 2018.

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We then looked at different industries in Europe. As shown in Figure 4, the main shift in S&P BMIs occurred in February, with most industries staying on a similar level for the remaining period. The main outliers were the S&P Industrials, Materials, and, in particular, Consumer Discretionary Europe, Middle East, and Africa (EMEA) BMIs. The S&P Energy BMI saw some of the highest volatility, but was able to decrease significantly throughout September. At the same time, the Materials sector saw a continuous default risk increase from the beginning of June, finishing at an absolute median PD level of slightly over 1% when compared to the start of the year.

Figure 4: S&P EMEA Industry BMI Median PD scores generated by PD Market Signals, between January 1 and October 1, 2018.

Source: S&P Global Market Intelligence. As of October 2018.

In conclusion, looking at the public companies, Latin America, Asia Pacific, and Europe pointed towards an increase of credit risk between January 2018 and October 2018, amid heightened tensions due to the current U.S. policy towards Latin-American countries, the U.S./China trade war, and Brexit uncertainty.

1 S&P Global Ratings does not contribute to or participate in the creation of credit scores generated by S&P Global Market Intelligence.

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2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Fundamentals View

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AVIA OTT Summit 2019 Offers Insight Into Changing OTT Roadmap

Mar. 06 2019 — Over-the-top video in the Asia-Pacific has been rapidly evolving as OTT players continue to learn and understand the landscape. Industry experts who participated in the Asia Video Industry Association OTT Summit 2019, held February 20 in Singapore, emphasized the importance of relevant content and adaptability of OTT players, particularly in finding the right business model.

According to Media Partners Asia's Vice President Aravind Venugopal, most OTT players that entered the region in 2016 — citing Netflix Inc., HOOQ and iflix — primarily offered a subscription service, whereas PCCW Media Ltd's Viu provided ad-supported content. He said that a year after, each one was trying to figure out what revenue model would work best. It was at that time that sachet pricing, transactional video-on-demand and ad-supported content became more prevalent.

As for 2018, it was said that OTT players moved toward paths through which monetization could continue to grow, and advertising video-on-demand had to be maximized. Venugopal cited that in one of Media Partners Asia's studies, online video platforms that were more ad-focused came out on top. China players such as iQIYI Inc., Tencent Holdings Ltd.'s Tencent Video and Youku Tudou Inc. are able to monetize consumers by adding sachet pricing, as well as allowing customers to purchase magazines or books, or any other offering that would make them stay on the service.

As more OTT services enter the region, finding the most ideal business model to retain and grow viewership can be a challenge. Panelists who were part of the "AVOD vs SVOD vs TVOD: Finding the Right Business Model" discussion, however, agreed there really is not any right model — it is yet to be discovered as OTT players learn more about their respective areas of operation.

Services will have to adapt and should be open to evolving content offerings based on consumers, while also taking regulatory policies into consideration.

In the case of HOOQ, CTO Michael Fleshman highlighted that the company is moving toward using a freemium model, through which consumers may eventually no longer need to register on the site. The OTT player is also trying to maintain simpler packages, with free content very much accessible for everyone.

He also said that HOOQ was initially worried about cannibalizing the subscription video-on-demand business, but as it turns out, engagement is still doing well.

HOOQ recently added linear channels to its offering, and Fleshman emphasized that the OTT service is not shifting but expanding its service so customers will not feel the need to go somewhere else to watch linear channels.

When global OTT player Netflix entered Asia in 2016, it had an international playbook in hand, which made collaborating with local operators a crucial step in learning more about the region. Subscription payment was one of its main concerns and having local partners became beneficial in addressing this.

When asked how the company felt about competitors and what its competitive advantage was in the Asia-Pacific region, Tony Zameczkowski, Netflix's vice president of business development in Asia, said the company sees competition as a good thing.

He also said Netflix's competitive advantage is its platform, content, marketing and partnership. In terms of platform, Zameczkowski elaborated that Netflix provides a "hyper-personalized" service capable of providing recommendations and personalizing the customer's content library.

In terms of content, Zameczkowski acknowledged that the OTT player's local content offering was initially weak. Soon after acquiring various licensing content from producers, however, Netflix started producing original content. The company will continue to invest in relevant titles. In relation to marketing the service, Zameczkowski said that Netflix banks on its titles, part of its promotional strategy.

Partnering with telcos was also very instrumental in establishing Netflix's presence in the region. Likewise, partnering with device manufacturers was important — a different approach for the company, as the Netflix app would normally be included on most devices in U.S. and European markets.

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