A+E Goes Its Own Way
The international business of pay-TV focused A+E has long been built on multiple JVs and partnerships, seeking to tap emerging market potential but also involving complex layers in structure and intent that can impede long-term strategy and growth.
The group’s life in Asia appears to have got simpler however, with a move to acquire the 50% it does not own of a regional JV with Malaysian media major Astro.
The transaction is expected to close in Q1 2013.
The JV, AETN All Asia Networks, covers distribution in Southeast Asia, Taiwan and Hong Kong for four branded channels, including the flagship History Channel.
The JV was formed in 2007, when Astro probably had more significant regional pay channel ambitions than it does now, and A&E needed a strong partner to grow across, fast-growing markets such as Malaysia and Indonesia, which in aggregate have close to six million pay-TV homes today.
A+E needs to monetize its distribution however, especially in terms of ad revenues, which are modest and appear not to be tracking the ratings its channels, especially History, deliver in Southeast Asia.
According to Media Partners Asia (MPA), publisher of The Asia Media Journal, A+E’s pay channels business will generate about US$55 million in Asia-Pacific this year, including the Astro JV as well as separate JVs (equity and licensing based) in large markets such as Australia, Japan and India.
By comparison, Discovery Networks Asia, which has been in the region since 1995, is on course to generate more than US$300 million this year, with advertising expected to contribute more than US$100 million, according to MPA.
“We have to find new ways to drive more growth as well as scale,” says A+E Networks International EVP, Sean Cohan.
“We also want to extend our footprint into new markets and launch new brands.”
A+E is close to launching its women-focused Lifetime channel across Asia, as well as kickstarting various multiscreen and non-linear initiatives.
Lifetime should prove attractive for distribution platforms and advertisers, sitting alongside History, Biography and Crime & Investigation.
“We want to develop Lifetime as the leading women’s entertainment brand in Asia, and further ramp up History and our other entertainment brands so we can also own the male demo alongside women,” Cohan adds.
He is keen to replicate A+E’s success in the US, History in particular.
One way to achieve this is via local production; as a result, Astro and A+E will partner to produce a variety of content, including big-ticket and tentpole programs to drive ratings.
The collaboration will tap Astro’s growing expertise in Malaysia and A+E’s global production nous.
Cohan says: “Overall, owning 100% of the business, as well as doing more local production through what we have with Astro, should help turbo-charge our growth in the future.”
This is an edited extract from the Q4 2012 edition of The Asia Media Journal. The entire issue can be downloaded as an iPad app here.