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Glencore to resume ops at Collinsville coal mine

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


Glencore to resume ops at Collinsville coal mine

TOP NEWS

Glencore to resume ops at Collinsville coal mine

Glencore Plc plans to resume full operations and hire over 200 workers at its Collinsville coal joint venture in Queensland, Australia. The move comes amid growing demand from Southeast Asia for the mine's specific product.

Northam to buy portion of Amplats' Amandelbult mining right for 1B rand

Northam Platinum Ltd. is set to acquire a portion of Anglo American Platinum Ltd.'s mining right over the Amandelbult platinum deposit in South Africa through a three-part transaction valued at 1 billion South African rand. According to Northam, the acquisition will extend the economic mine life of its nearby Zondereinde platinum mine to over 30 years.

International Finance Corp. to exit Rio Tinto's Simandou iron ore project

The World Bank's International Finance Corp. is exiting Rio Tinto Plc's Simandou iron ore project in Guinea after a decade of being a partner, Bloomberg News wrote.

DIVERSIFIED

* Vale SA's CEO, Murilo Ferreira, will leave the Brazilian iron ore producer in May 2017 amid a change in Brazil's political scenario, SteelOrbis wrote, citing media reports.

* With the Paris climate accord scheduled to come into force on Nov. 4, mining major BHP Billiton Group still expects its copper, oil and gas, iron ore and coal businesses to have strong future margins, saying that fossil fuels will "continue to be a significant part of the energy mix for decades," Reuters reported.

* Meanwhile, BHP Billiton is participating in the A$42.5 million Lakeland Solar and Storage Project in Queensland, a battery-storage project to test technology that could be adopted at the company's remote mines, Bloomberg News wrote.

* Rio Tinto repurchased and canceled about US$1.5 billion of its 2019, 2020, 2021 and 2022 notes under the cash tender offer announced in late September. The global mining giant's offer to redeem about US$1.5 billion of its 2017 and 2018 U.S.-dollar-denominated notes will remain open until Oct. 26.

BASE METALS

* Yunnan Tin Co. Ltd. expects to swing to a net profit of between 40 million Chinese yuan and 60 million yuan in the third quarter, from a net loss of 87.7 million yuan posted a year ago, driven by a rally in nonferrous metals prices and its acquisition of indium-tin miner Yunnan Hualian Zn-In Shares Co.

* Jilin Jien Nickel Industry Co. Ltd.'s overdue debts amounted to 3.73 billion Chinese yuan as of Oct. 10, more than double the 1.63 billion yuan recorded as of Sept. 22. The company said it failed to raise funds to complete a loan replacement plan during the period, which resulted in the steep increase in overdue debts.

* The BHP Billiton and Glencore Plc majority-owned Antamina mine in Peru is likely to double zinc output to between 340,000 tonnes and 360,000 tonnes in 2017, Reuters reported. Annual copper output is expected to increase to 430,000 tonnes in 2016 and 2017, slightly above the 2015 total of 412,000 tonnes.

* Compañía Minera Milpo SAA and Quinn International Group are among the investors interested in bidding for Doe Run Peru SRL's La Oroya polymetallic smelter and the Cobriza copper mine in Peru, sources told El Comercio. So far, eight potential investors would be participating in the auction planned for the first quarter of 2017, including business conglomerate Eetac Syndicate — composed of Chinese firms Greenovo and China Nonferrous Metals Co. Ltd. as well as ZincOx Resources Plc.

* PT Timah (Persero) Tbk recorded lower monthly exploration activity amounting to 88 billion Indonesian rupiah during the January-to-September period, compared to 109 billion rupiah in the same period in 2015, Bisnis Indonesia reported.

* PJSC MMC Norilsk Nickel vowed to defend its interests in the sale of its 50% stake in the Nkomati nickel joint venture in South Africa to Botswana-based BCL Ltd. This comes after the government of Botswana applied to the high court to place its copper and nickel producer BCL Mine Ltd. under provisional liquidation due to nonprofitability.

PRECIOUS METALS

* Eurasia Mining Plc awarded a US$176.0 million engineering, procurement, construction and commissioning turnkey contract to China's state-owned Sinosteel Corp. for the development of two platinum group metal deposits at its Monchetundra license area in Russia.

* Tahoe Resources Inc. has recommended that its shareholders reject TRC Capital Corp.'s unsolicited tender offer to buy up to 5 million Tahoe common shares for C$14.35 each in cash.

* Impala Platinum Ltd. has produced its 50 millionth ounce of platinum after 47 years of operations, Mining Weekly reported. The output equals 1,555 tonnes of platinum and is worth some 750 billion rand at current market prices.

* BWR Exploration Inc. has executed a definitive acquisition agreement with Puma Exploration Inc. to acquire a 100% interest in the latter's Little Stull Lake gold project in Manitoba. BWR will pay a total of C$150,000 to Puma and issue 10 million BWR common shares.

* Vast Resources PLC has repaid a balance of £325,000, plus £13,000 in interests, under its Darwin bridge loan note that was announced in May.

* Banro Corp. achieved a record gold output of 53,377 ounces in the third quarter, pushing total production in the first nine months of this year to 147,242 ounces. This means the company is on track to meet its full-year production guidance.

* Endeavour Silver Corp.'s third-quarter silver production decreased by 29% year over year, to about 1.3 million ounces, while its gold output fell by 6% to 14,364 ounces. Both silver and gold sales dropped during the period to 1.2 million ounces of silver and 14,228 ounces of gold.

* Bluebird Merchant Ventures Ltd. has received an unsolicited offer by an unnamed company, which is seeking to acquire a controlling stake at a premium to the current share price. Bluebird said its board will engage with the tendering company but added that the talks are at a preliminary stage. Bluebird holds a controlling stake in the Batangas gold-copper project in the Philippines.

* The Association of Mining and Exploration Companies warned the gold mining industry that the issue of possible royalty hikes is still very much alive.

* Compañía de Minas Buenaventura SAA's gold output in the third quarter totaled 277,556 ounces, down from 366,881 ounces in the year-ago corresponding period. Silver production amounted to about 5.75 million ounces, slightly up from 5.63 million ounces reported in the same quarter of 2015.

* Despite Indonesia's revision of its mining laws, Lion Selection Group Ltd. is investing in One Asia Resources Ltd.'s 2.8 million-ounce Awak Mas gold project.

* Construction has started at Hummingbird Resources Plc's Yanfolila gold project in Mali, with first gold pour expected by the end of 2017, targeting an output of 132,000 ounces in the first year.

* The Australian Securities & Investments Commission ordered the sale of 22,901,234 Sovereign Gold Co. Ltd. shares, or 1.62% of the company's issued capital, after finding that major shareholder GTT Ventures Pty. Ltd. contravened the takeovers threshold in relation to Sovereign Gold, and that former substantial shareholder Hudson Resources Ltd. collaborated with GTT.

* Tharisa Plc exceeded its fiscal 2016 output guidance for platinum group metals, producing about 132,600 ounces, a 12.4% year-over-year increase. Chrome production totaled approximately 1.2 million tonnes, up 10.8% despite marginally lower feed grades.

* Metals X Ltd. CEO Peter Cook believes the separation of the ASX-listed miner's gold assets into a new company will likely set it up for a rerating rather than make it a takeover target.

* The Malian government demanded that Randgold Resources Ltd. pay 50% of the US$80 million it says the miner owes the government before starting talks about the repayment schedule for the remaining amount, Reuters reported.

* Kinross Gold Corp. is set to start mining two small but high-grade silver and gold deposits in Russia by 2018. The Toronto-listed company will begin mining Moroshka, located 4 kilometers east of the Kupol site, by late 2017, and at September Northeast, located 15 kilometers northwest of Dvoinoye, by 2018.

* King River Copper Ltd. signed a heads of agreement with Spectrum Rare Earths Ltd., allowing the latter to earn a 51% stake in the Mount Remarkable gold prospect in Western Australia.

BULK COMMODITIES

* Yanzhou Coal Mining Co. Ltd. is seeking to shut down its Beisu coal mine in China's Shandong province to eliminate 1 million tonnes of excess capacity, in accordance with the Chinese government's efforts to curb overcapacity in the coal sector.

* Zamia Metals Ltd. has signed a deal to acquire Kirkham International Pte. Ltd., which owns a 4,798-hectare mining permit for a coal project in Central Kalimantan, Indonesia, for A$24.3 million in shares.

* Following the surge in coking coal prices after supply cuts in China, Jindal Steel & Power Ltd. restarted its mines in Mozambique on Oct. 1, Mint reported.

* While India's domestic steel industry may be protected from a price decline due to increasing local demand, the sharp jump in exports makes Indian steel producers "vulnerable" to global price fluctuations, Mint wrote.

* Prairie Mining Ltd. acquired the Debiensko coking coal project in southern Poland through the purchase of 100% of the shares in New World Resources Plc local subsidiary, NWR Karbonia SA, for an upfront cash consideration of €500,000 and deferred cash consideration of €1.5 million.

* Savannah Resources Plc entered into a new consortium agreement with Rio Tinto covering the Jangamo heavy mineral sands project in Mozambique that will allow operations at the project to start immediately.

* Russian Mining and Metallurgical Co. has bought the property of the bankrupt Revyakino steel plant in Russia's Tula region, Kommersant reported.

* JSW Steel Ltd. is engaged in "exploratory work" on acquiring an interest in troubled Italian steelmaker Ilva International SpA, Metal Bulletin reported, citing JSW's joint Managing Director Seshagiri Rao.

* Following a rally in the spot market, a recent deal points to the fourth-quarter metallurgical coal benchmark likely doubling versus both the prior quarter and the year-ago period to settle above market expectations, reversing a down cycle that lasted more than five years.

* Chinese state-owned Dongbei Special Steel Group Co. Ltd. has been formally placed into a bankruptcy restructuring process following a court filing by one of its creditors, Alashan Jinzhen Smelting Co. Ltd., Reuters reported, citing Xinhua News Agency.

* According to The Australian Financial Review's Street Talk, Arrium Ltd.'s Moly-Cop expected a fiscal 2017 EBITDA of US$146.2 million, in line with the US$145.8 million posted for the year ended June 30.

SPECIALTY

* Sichuan Tianqi Lithium Industries Inc. is interested in the sale of Sociedad de Inversiones Pampa Calichera SA because it would help the Chinese firm expand in the international lithium business, Andrew Low, manager of international corporate finance and capital market at Citic CLSA, a financial adviser to Tianqi, told La Tercera. Tianqi already bought a 2% stake in Sociedad Quimica y Minera de Chile SA and is vying for a 23% controlling stake held by Pampa Calichera on the Chilean fertilizer company.

* TNG Ltd. produced its first high-purity vanadium electrolyte using vanadium pentoxide from its flagship Mount Peake vanadium-titanium-iron project in Australia's Northern Territory.

INDUSTRY NEWS

* Canadian mining leaders are considering renewable energy options to further reduce greenhouse gas emissions and optimize energy costs, Mining Weekly wrote, citing Adrienne Baker, a director of Canada's Energy and Mines.

The Daily Dose is updated as of 7 a.m. ET, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require 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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