Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: After nearly a four year break, kpop super group BTS
Speaker 2: is back.
Speaker 3: Everyone here and everyone watching on Netflix around the world,
Speaker 3: thank you for joining us tonight.
Speaker 2: More than one hundred thousand fans watched their comeback concert
Speaker 2: promoting a new album this past weekend in Soul, and
Speaker 2: millions more watched live on Netflix. It's the first time
Speaker 2: the group's seven members have shared the stage since twenty
Speaker 2: twenty two, when they took a break to complete their
Speaker 2: mandatory military service. In k pop, tastes change fast and
Speaker 2: groups come and go quickly, but BTS has proven they've
Speaker 2: got staying power. Tickets for the band's upcoming world tour,
Speaker 2: all eighty two shows sold out almost instantly. Bloomberg's Asia
Speaker 2: Entertainment correspondence So He Kim was at the Netflix show
Speaker 2: in Seoul.
Speaker 4: They have this army as a fan base who's willing
Speaker 4: to buy the hundred copies of the albums, streaming endlessly
Speaker 4: their music, and attending concerts a couple of times.
Speaker 2: The performance was also a significant milestone for Netflix. It's
Speaker 2: the platform's first live streamed concert from Asia and only
Speaker 2: its third live event in the region.
Speaker 5: Netflix's deal with BTS speaks to the growing importance of
Speaker 5: Asia as a region for the world's largest streaming service.
Speaker 5: It's been the fastest growing region in the world for
Speaker 5: them the last few years.
Speaker 2: Lucas Shaw is the managing editor for Media and Entertainment
Speaker 2: at Bloomberg and writes its screen Time newsletter. He says
Speaker 2: BTS is big comeback has given Netflix a golden opportunity
Speaker 2: to build an audience with fans who aren't Netflix customers yet.
Speaker 5: The return of BTS is one of the if not
Speaker 5: the biggest cultural moment of the year in the region.
Speaker 5: They're the most popular boy band in the world. They're
Speaker 5: the most popular pop back Korea has ever produced, and
Speaker 5: so this is an opportunity to try to draw in
Speaker 5: a lot of fans from across the region who haven't
Speaker 5: tried Netflix is even though there you know, Netflix has
Speaker 5: tens of millions of customers in Asia, there are billions
Speaker 5: of people and probably hundreds of millions of BTS fans.
Speaker 2: This is the big Take Asia from Bloomberg News. I'm Wanha.
Speaker 2: Every week we take you inside some of the world's
Speaker 2: biggest and most powerful economies and the markets, tyccoons and
Speaker 2: businesses that drive this ever shifting region. Today, on the show,
Speaker 2: BTS is Back and Netflix is using the boy band's
Speaker 2: popularity to boost its dominance in Asia, we look at
Speaker 2: how Netflix and its competitors are chasing growth in the
Speaker 2: region and what strategies they're using to grab market share.
Speaker 2: Bloomberg Showhee Kim has been covering K pop for a decade,
Speaker 2: long enough to watch BTS's explosive rise in real time.
Speaker 2: She remembers the first BTS press conference she attended. It
Speaker 2: was early in their careers, after they became the first
Speaker 2: K pop group to win at the Billboard Music Awards
Speaker 2: in twenty seventeen. That year, they beat out the likes
Speaker 2: of Justin Bieber and Ariana Grande for the Top Social
Speaker 2: Artist category. And we still cannot believe that we're standing
Speaker 2: here on this stage at the Billboar Musical Wars.
Speaker 4: Oh my gosh, they were young.
Speaker 3: I was young, and they looked like a very big
Speaker 3: pop star already, but I could sense that they were
Speaker 3: still boys.
Speaker 2: Now, almost a decade later, Sooey says, the band has
Speaker 2: clearly grown up.
Speaker 3: Ten years after the big stardom and the military service,
Speaker 3: and now they are in the thirties and I'm now
Speaker 3: in thirties. The answers and the vibe that they've been
Speaker 3: giving me during the interview was very mature and thoughtful.
Speaker 2: K Pop as a genre has matured too. In twenty seventeen,
Speaker 2: when Sooey first met BTS, kpop was relatively new to
Speaker 2: global audiences, big in parts of Asia, but far from
Speaker 2: the nine billion dollar business it is today.
Speaker 3: K Pop started as the Korean language pop, but if
Speaker 3: you listen to the music, it's not just Korean language
Speaker 3: where Korean sound, it's more of a mix of a
Speaker 3: lot of pop genres, and now K pop bands are
Speaker 3: singing a lot in English, so I will say it's
Speaker 3: more of like borderless genre right now.
Speaker 2: K pop's borderless appeal is one reason tens of thousands
Speaker 2: of fans from all over the world gathered in Soul
Speaker 2: for the comeback. Bloomberg's Lucas Shaw says Netflix hopees moments
Speaker 2: like this can act as a powerful on ramp, giving
Speaker 2: BTS's massive, highly engaged fan base a reason to sign up,
Speaker 2: sample the platform, and ideally stick around as long term subscribers.
Speaker 3: Well.
Speaker 5: The main way for Netflix to make money off this
Speaker 5: is to get people to sign up to pay for Netflix, right,
Speaker 5: they're not selling it as an add on. You know,
Speaker 5: they're not a lot of acts where I think they'd
Speaker 5: want to do live concerts like this, just because there's
Speaker 5: only a handful of acts at the scale of a BTS.
Speaker 5: And I imagine they would want this to be part
Speaker 5: of an ongoing relationship with the band. They'd love to
Speaker 5: have there be somewhat regular documentaries or touch points, just
Speaker 5: because BTS has stretched a strong and passionate fan base.
Speaker 2: Netflix hasn't disclosed how much it costs them to stream
Speaker 2: BTS's opening show, but the BTS Live comeback gave the
Speaker 2: platform a rare chance to make a big splash in Asia,
Speaker 2: and it worked. The live stream drew more than eighteen
Speaker 2: million views and it was the most watched show on
Speaker 2: Netflix for the week. That's exactly the kind of global
Speaker 2: attention Netflix is betting on.
Speaker 5: I would view it as a continuation of a strategy
Speaker 5: where they do a small number of major live events
Speaker 5: and they want each one of them to feel special
Speaker 5: and loud. But it's in keeping with you know, they
Speaker 5: had the World Baseball Classic in Japan. You know, they
Speaker 5: don't have a full season of football. They do Christmas
Speaker 5: Day football. They don't have a full season of baseball.
Speaker 5: They're doing Opening Day and the home Run Derby, and
Speaker 5: so you know, what better way to have their first
Speaker 5: concert than a live show with one of the biggest
Speaker 5: acts in the world.
Speaker 2: Lucas says BTS is just one part of a bigger push.
Speaker 2: Netflix has been investing heavily in CAREA and in Korean
Speaker 2: content because the returns have been impossible to ignore. Squid Game,
Speaker 2: the gory dystopian Korean thriller, remains Netflix's most watched title
Speaker 2: of all time. Its first season generated and estimated nine
Speaker 2: hundred million dollars in value and spawned multiple seasons, and
Speaker 2: now Netflix is planning a k pop Demon Hunter's World tour,
Speaker 2: building on the runaway success of its most popular movie ever.
Speaker 5: The customer base in Korea first streaming is not a
Speaker 5: top five market, but as a producer of film, television
Speaker 5: and some of these music properties, it's punched away above
Speaker 5: its weight.
Speaker 3: Right.
Speaker 5: It's been the most important in Asia by far, because
Speaker 5: Korean film and television is popular not just at home,
Speaker 5: but in Japan and tauth East Asia and increasingly elsewhere.
Speaker 5: I'd say it's one of the three or four most
Speaker 5: important markets outside of the US.
Speaker 2: In Korea definitely holds the crown for content right now.
Speaker 2: Asia is huge, though, so when Netflix looks at the
Speaker 2: rest of Asia, where do they see the biggest growth opportunities.
Speaker 3: Japan remains a very high value metro market with very
Speaker 3: strong will needs to pay. So they've been working on
Speaker 3: a lot of jills in Japan and they spend a
Speaker 3: lot of money on WBC live streaming scale wise, India
Speaker 3: and Southeast Asia over the long run could give them
Speaker 3: some massive skill but for now it's a lower revenue
Speaker 3: per user. So I think the opportunities like lies in
Speaker 3: tailoring price and content that they are going to have
Speaker 3: in each market.
Speaker 5: And of course there's China right huge market, but totally inaccessible.
Speaker 5: They've tried. Any Western company, or really any foreign company
Speaker 5: needs to have a license or really have a local
Speaker 5: partner that controls the business. It would be sort of
Speaker 5: a you know, a separate venture. Netflix had tried for
Speaker 5: a few years, but it probably wasn't going to happen,
Speaker 5: And I think they also made a decision looking at
Speaker 5: how much money would be required to invest in China
Speaker 5: to make it work, you know, billions of dollars that
Speaker 5: that was money better spent on places like India and
Speaker 5: Japan that were equally large.
Speaker 2: Global streamers like Netflix, Disney Plus, and Amazon Prime all
Speaker 2: see Asia as a driver of growth, but it's also
Speaker 2: a notoriously difficult market for American companies to crack. After
Speaker 2: the break, we look at the strategies streaming platforms are
Speaker 2: adopting as a battle for dominance in the region. Asia
Speaker 2: offers enormous growth potential for global streamers, but it's a
Speaker 2: complex region to scale. There's differences in length, UIG and income,
Speaker 2: and diverse local taste and infrastructure. Bloomberg's Lucas Shaw says
Speaker 2: the challenges vary widely from country to country.
Speaker 5: The continent is home to more than half the people
Speaker 5: in the world right, so it's by nature going to
Speaker 5: be more diverse than like in Latin America, though it's tricky.
Speaker 5: They all speak the same language, and so that's a
Speaker 5: lot easier than like India alone has dozens of different languages.
Speaker 5: If you're talking about places in Southeast Asia, for example,
Speaker 5: generally poorer, so they don't have the disposable income to
Speaker 5: spend on Netflix subscriptions. A lot of them don't have
Speaker 5: credit cards, and there's also not the same local infrastructure
Speaker 5: to produce local content, which tends to be very popular
Speaker 5: and key. So it just it requires a much longer
Speaker 5: term investment, right like Netflix could slip a switch in
Speaker 5: Canada or Australia and it immediately worked. It could slip
Speaker 5: a switch in the UK and it pretty much immediately worked.
Speaker 5: Latin America. Let's say it took them three to five
Speaker 5: years to figure out India. They're ten years in and
Speaker 5: I still don't think they'd say they've cracked it.
Speaker 2: All of the big American content companies looking at Asia
Speaker 2: have similar stories to tell. Take Disney. For years it
Speaker 2: tried to set up in India on its own, but
Speaker 2: without success. Eventually it merged its India business with a
Speaker 2: company backed by Reliance Industries, the conglomerate owned by Mukesham Bani,
Speaker 2: Asia's richest man in India. Competition from local providers is fierce,
Speaker 2: so he pointed to India's Geostar, which owns the country's
Speaker 2: largest collection of TV networks and its most popular paid streaming.
Speaker 4: Service, Geostar.
Speaker 3: They are disrupting the markets with this like a free,
Speaker 3: ad supported platform and the live streaming for sports and
Speaker 3: other regions like Southeast Asia, for example, videos there, view
Speaker 3: is there, and Korea. Tving is now expanding their territories
Speaker 3: with multiple deals with the international players. They are going
Speaker 3: into Japan and as well. The local players also have
Speaker 3: their own, like a strategy to scale their business in
Speaker 3: this market and eventually they want to like have more
Speaker 3: of international viewers from the USS wall.
Speaker 2: Local platforms also battle it out on price. That makes
Speaker 2: it hard for premium service like Netflix to compete. In India,
Speaker 2: for example, a monthly subscription to Geostar streaming service costs
Speaker 2: around eighty cents. A Netflix subscription is almost double that.
Speaker 2: The same goes for a lot of the other local
Speaker 2: markets where Netflix expanded in the region.
Speaker 5: They just rolled it out at the same price everywhere
Speaker 5: and wanted to see how it work. Because Netflix is
Speaker 5: a big fan of test and learn, rather fail in
Speaker 5: public and figure it out quickly than try to map
Speaker 5: out the perfect strategy on the spreadsheet. They soon realized
Speaker 5: their problems and rolled out lower cost plans in some
Speaker 5: of Southeast Asia and India. I think it's still a
Speaker 5: work in progress for them, still something that they're fermenting with.
Speaker 5: I think it is unlikely that you will see company
Speaker 5: like Netflix offer their product for as little as Geostar does,
Speaker 5: you know, they're not going for the masses in quite
Speaker 5: the same way, but it's been a real, real limiting
Speaker 5: factor for their growth in some of these more populous
Speaker 5: but poorer markets. Part of what.
Speaker 2: Makes Asia such a complicated target for global streaming companies
Speaker 2: is that audience habits in the region can look very
Speaker 2: different from the US and Europe, both in terms of
Speaker 2: what people consume and how they consume it, and it's
Speaker 2: something these companies still haven't fully figured out yet.
Speaker 5: There are a bunch of media types that are very
Speaker 5: popular in Asia that people have tried to replicate in
Speaker 5: the US and the West with mixed success. This is
Speaker 5: less maybe less pertinent to film and TV, but I
Speaker 5: think matters with celebrity and talent, like live shopping is
Speaker 5: a huge thing in Asia that it has just not
Speaker 5: really picked up in the US. And I'd say in general,
Speaker 5: the fan economy in Asia is larger and a little
Speaker 5: more developed. Americans spend a ton of money on concert
Speaker 5: tickets and on merchandise, but there's not as many online
Speaker 5: and kind of direct transactions and tipping and like live
Speaker 5: streams where you're paying for to be able to use
Speaker 5: emojis and certain things like that that I think are
Speaker 5: just bigger in this part of the world.
Speaker 2: All of those differences are shaping how streaming evolves in
Speaker 2: the region and where it may end up next. One
Speaker 2: of the main ways global streaming platforms are trying to
Speaker 2: get an edge and more subscribers in Asia is by
Speaker 2: investing heavily in local language programming. The idea is simple,
Speaker 2: Shows made for local audiences are more likely to break
Speaker 2: through at home, and the biggest hits can travel far
Speaker 2: beyond the original markets, like what Squid Game in Korea
Speaker 2: did for Netflix.
Speaker 3: Netflix strategy is local for local. For example, in India,
Speaker 3: India's content used to be in Mumbai, but now they
Speaker 3: are expanding in like a South India, Tamil and Teleku
Speaker 3: for their next big growth river.
Speaker 1: Yeah.
Speaker 5: Netflix has been the biggest investor in local programming in
Speaker 5: Asia and the world by leaps and bounds. Amazon has
Speaker 5: invested heavily in select markets where it has an existing business,
Speaker 5: oftentimes where there's overlap with their prime shipping service. Disney
Speaker 5: has historically believed that it is producing programming in the
Speaker 5: US that travels the world, and it does not need
Speaker 5: to invest as much in local markets because Marvel and
Speaker 5: Pixar and Star Wars are universal. That has changed over
Speaker 5: the last few years as it has realized the importance
Speaker 5: of local programming.
Speaker 2: It's a lot to think about for these streamers. Serious
Speaker 2: investment in local programming means developing multiple streams of content
Speaker 2: in diverse markets across the region. It's an expensive proposition
Speaker 2: with no guarantee of success. Let's pretend you're both looking
Speaker 2: into a crystal ball. It's twenty thirty. What does the
Speaker 2: Asian streaming market look like.
Speaker 3: It's likely to be a hybrid like global players that
Speaker 3: will dominate in scale and premium content. The local platforms
Speaker 3: will continue to hold ground and team markets like India,
Speaker 3: Japan and Korea. They're also trying to spend more money
Speaker 3: on live streaming deals like in sports, and there will
Speaker 3: will be like a special event, so like Netflix and
Speaker 3: Disney Plus will have in this market to generate the
Speaker 3: buzz around those events and use it as a growth momentum.
Speaker 5: Netflix will still be the most successful premium streaming video service.
Speaker 5: You know, we're going to set the YouTube TikTok Instagram
Speaker 5: aside for the moment you'll see a newly combined Paramount
Speaker 5: and Warner Brothers Discovery kind of push its product across
Speaker 5: a lot of Asia, but I think we'll still be
Speaker 5: a pretty small player and not have invested enough in
Speaker 5: local programming because it's just too expensive. I wouldn't be
Speaker 5: surprised if you saw some local players do what we've
Speaker 5: already seen happen in certain markets, where they license their
Speaker 5: TV network or they do a deal with a Netflix
Speaker 5: or an Amazon where that becomes their streaming home for
Speaker 5: their TV network. Right there's a deal between TF one
Speaker 5: in Netflix in France. PF one is one of the
Speaker 5: biggest media companies in the country, and they basically just
Speaker 5: said competing with Netflix online is not going to work
Speaker 5: for us. Let's just partner and benefit from the audience.
Speaker 5: And I think you could see some of that if
Speaker 5: some of the local streaming services don't work. But I
Speaker 5: don't know. Twenty thirty is not actually that far away.
Speaker 2: This is the Big Take Asia from Bloomberg News. I'm
Speaker 2: wanha to get more from The Big Take and unlimited
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