A forced marriage, a loveless union, and mysterious disappearances.
All these are red flags in a relationship, but thankfully they’re just plot developments in Rindu Awak 200% (I miss you 200 %), a Malay television drama broadcasted nationwide in 2014.
“The show was so memorable and featured actors like Zul Ariffin. Mass Malays loved it,” says Ben Jern Loh, general manager of Tonton, a video streaming service under Kuala Lumpur-headquartered Media Prima Berhad. “It’s one of our top 10 shows being streamed,” he adds.
A decade ago, TV show spoilers wouldn’t have happened because original content broadcasted on television wouldn’t be released online. But now, people can finish entire seasons in one sitting using video streaming services. “Consumption habits are changing and people want to finish entire seasons of a show without waiting for the television,” says Loh.
Netflix, YouTube, Tonton, and Iflix are examples of over-the-top (OTT) services: media content provided via the internet. These new options have changed viewing patterns, with audiences moving from television screens to desktops, and then to mobile phones. This shift also has an impact on how ads are served – ad spend on digital media is increasing and beat TV ad spend in 2017.
Seeking alternative advertising revenue
In 2017, Media Prima lost about US$26 million in the third quarter because of a drop in television and print advertising revenue.
However, Loh confirms that they saw a 38 percent growth in revenue in 2017 on the back of increasing engagement rates and subscriptions on Tonton.
As such, it’s no surprise that the company is setting its sights on other options, such as digital advertising and subscription revenue.
“TV is incredible for reaching large audiences at one go and provides a general audience profile breakdown based on station’s strategy or the segment’s theme,” explains Loh. But Tonton’pitch was that advertisers could now target audiences beyond large numbers, but drill down to their behavior and even individual profiles.
Doing this was not without risk. But the promise of increased revenue gave Tonton an edge in the boardroom. According to Loh, Media Prima’s top-level management was confident about creating the service. “We knew this was the future,” he recalls.
Rolling the dice on OTT service
When it was first launched in August 2010, Tonton was just meant to stream some TV channels online and help audiences catch up on shows.
Still, the service had to be custom built from ground up.
Back then, building a technology service from scratch was far more expensive. Tonton declines to reveal how much it cost to build the new product.
“Seven to eight years down the line, costs have gone down because of economies of scale. The cost of streaming technology has also gone down since 2010,” says Loh.
Around April 2014, Media Prima switched from a custom solution to Ooyala, an online video platform for Tonton’s live streaming and video-on-demand needs. This was significantly more efficient, provided better insights, and was cost-effective as the components were purpose-built for the OTT industry.
The change was followed by April 2016’s launch of a completely redesigned Tonton – it would no longer be a completely free ad-supported service in Malaysia.
“I think the most difficult part was converting the 5.5 million users then, and telling them that Tonton was no longer 100 percent free,” recounts Loh. “It was scary because we didn’t know how users would react.”
Based on previous experiments with video credits, the team decided on the basic price point of about US$0.70 for a 24-hour subscription. At present, a year’s subscription costs about US$25.
To convince users to sign up, Tonton gave out free one-month subscriptions to existing users and experimented with getting the right mix of free and paid content.
Sarah Ismail says she became a member right away after watching a Tonton ad on television about a year ago. “I was quite excited and paid about US$2.54 (MYR10) in the first month.”
The 25-year-old account executive uses Tonton to watch Malay dramas in high definition, such as Ariana Rose and Ku Kirim Cinta. She also uses YouTube and Netflix for other types of content.
Her mother, a “hardcore Malay drama fan,” “just binge-watches through the night.”
Some premium shows and un-aired content are only available for paid users. Upcoming exclusives include content created by popular Southeast Asian YouTube creators Jinnyboy and TheMingThing.
While Loh couldn’t reveal more details, he hints that upcoming content takes some inspiration from Netflix’s Black Mirror.
Microscopic targeting now possible
With the business model locked down, Tonton had to take a harder look at its ads.
The group had started a data-driven ad targeting process on Tonton when it was first launched in 2010.
Big tech brands such as Samsung and Panasonic as well as fast-moving consumer goods (FMCG) behemoths like Procter & Gamble joined in. “The sales team said, ‘Let’s place your ad on Tonton.’ We had to educate advertisers [on Tonton’s reach],” shares Loh.
Advertisers can no longer rely on the same 30-second commercials on TV. “The optimal way is to customize the message so that users can engage with the ad better,” observes Loh.
Whether audiences engage with ads meaningfully depends on their length and message. Digital ads need to be short – sometimes, as brief as 10 seconds.
They also need to drive at immediate conversion rather than just national awareness.
For instance, on top of hearing about a new product over traditional media, viewers should have a way to receive a promotion code or a coupon such as via clicking a button.
Loh says, “[Advertisers] get the reach, the eyeballs and the pluses of the digital world, but what [they] need is a bit more engagement so that users will immediately go, ‘Oh, yeah! Get a discount!’”
Joshua Tan, a digital media specialist at integrated advertising agency DigitasLBi, points out, “If you are watching an ad on YouTube, it’s right before the video you signed up to watch or clicked on.” Viewers could simply skip the ad if they are not interested.
“So, if you have some interactivity, that helps if your messaging or creative is compelling and all the elements come together to reach out to the right audience,” says Tan.
The level of ad targeting Tonton is equipped to do is granular. For instance, it can reach females between age 18 and 25 who are specifically talking about Justin Bieber through Media Prima’s digital advertising platform called Audience+.
Tonton is also working on another level of ad targeting through Camment, an AI-powered video chat plug-in with face and voice recognition.
While Camment is meant for users to leave video notes for their friends while watching a show, the plug-in also remembers how users look like, which enables it to serve targeted ads.
For example, a male user with a beard talks about David Beckham over Camment. The AI will recognize the user’s gender and facial features. The user will then be served ads targeted at adult males with mustaches, such as Gillette razors or electric shavers.
Exploring new channels of advertising
For advertisers, the best part about technology is how it allows them to swoop in and curate their own channels or reels of content with just a click of a button.
A Kantar Millward Brown study commissioned by Hulu in October 2016 found that OTT ads were more effective at increasing brand awareness and brand favorability compared to desktop and mobile ads.
To create a traditional broadcast channel, media companies need to get through red tape. But advertisers can create virtual TV channels on OTT services such as Tonton.
“If users were to go on Tonton right now, chances are, they may see one or two cooking shows,’’says Loh. They would also have to dive deeper to find more shows. In contrast, Loh contends that “if a cooking company came to us [to curate a cooking channel], people who love cooking get a channel without having to manually search for cooking shows!”
With close to 35,000 hours of content, Tonton has an extensive inventory of dramas and movies that can help brands run campaigns based on any theme through virtual stations. This isn’t possible with regular TV.
OTT services can help TV ratings
More people are watching shows online, but surprisingly, Loh says Tonton doesn’t eat into Media Prima’s TV ratings. This is mainly because TV users and internet users appear to be separate groups who have different viewing patterns.
“Ratings for TV did not drop,” he shares. In fact, the service helps to promote content organically.
Ratings for traditional TV did not drop.
In line with this, Tonton allows their 7.8 million users to watch shows six months before it’s broadcasted on TV. In turn, these internet-savvy viewers would promote the shows – on their own, without any prompting or inducement.
“After watching [a show], they start talking about it in their social space. They tell their mother and father, they go on Twitter and talk. We are essentially laying the groundwork for the TV network. By the time the show hits TV, it already has runway,” explains Loh.
People who prefer to watch television could simply wait for the show to be broadcasted, while people who demand the content immediately or prefer exclusive Tonton-only content could subscribe to Tonton. Usually, those more likely to subscribe to on-demand services such as Tonton watch shows for their favorite actors and actresses, according to Loh.
While he acknowledges how widespread online streaming services have become, Loh thinks Tonton has carved its own niche.
“You have Netflix, Amazon Prime video. Everyone has their niches, [but] we aren’t necessarily competitors. If you get Iflix [for Hollywood content], you may still subscribe to Tonton if you want the best of Malaysian content,” he argues.
“That’s the mix we’re aiming at today,” concludes Loh.
Converted from Malaysian Ringgit. Rate: MYR 1 = US$ 0.26.
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