Streaming wars ramp up: Is Hayu leading a new SVOD wave, ahead of Disney and Amazon?

On Friday NBCUniversal held a media briefing for its new reality-focused streaming service Hayu. Nic Christensen looks at the broader global play and how Hayu is really part of a new second wave of streaming players preparing to enter the Australia market. 

HayuIf you were wondering why someone would launch a local streaming service built around ‘trashy’ US reality TV shows like Keeping up with the Kardashians and The Real Housewives franchises, you’re probably not alone.

But NBCUniversal’s global executives say they’re confident they know what they’re doing, and Australian-born APAC boss Christine Fellowes makes no apologies for the offering.


Fellowes: Targeting a demographic of women who love a reality TV content.

“This content is popular – really, really popular,” Fellowes, explained to journalists on Friday.

“Ninety-four per cent of women in Australia are watching unscripted. Most of what they are watching comes from the US and it is a strongly time-shifted genre. This means women across the country are already determined to define their own viewing schedules.

“There is a passionate and connected community of Australian women watching, sharing and talking about reality TV. We call them ‘the tribe’.”

That ‘tribe’ of Australian women is precisely who NBCUniversal is targeting with its new Hayu offering, priced well below other rival streaming video on demand (SVOD) services, at $5.99, and which may impact other players who currently have key parts of their female demographic offering built around US reality content like Foxtel, with its E! channel, and the Nine Entertainment, with its new multi-channel, 9Life.

“Reality has a resonance with Australian women and the desire for fans to emerge themselves in the lives of these stars,” says Fellowes.

“We undertook extensive research, hiring research firm Tapestry to review secondary research studies to look at how women in Australia were consuming this medium. Tapestry spoke to 6000 women worldwide, including 1500 in Australia, to investigate the appetite and interest for a subscription video service.

“The data allowed us to determine the optimal price and who our core audience is and what their viewing and social media habits are,” Fellowes said.

NBCUniversal claims it now has a clear understanding of the demographic it believes will pay for the SVOD service.

Whether it’s 18-year-old student ‘Sarah’ a digital native who is addicted to her smartphone, Gen Yer ‘Gemma’ who loves shopping or 42-year-old stay at home mum ‘Chloe’, who loves talking reality TV with her friends, NBCUniversal believes it has very clear business segments to support the product.

Presentation slide from Friday's media briefing.

Presentation slide from Friday’s media briefing.

Shannon Most, NBCUniversal’s marketing director in Australia and New Zealand, has promised a major above-the-line marketing campaign for later this year.

“NBC Universal is obviously a very powerful global brand,” said Most. “Hayu is not trying to be all things to all people, which some of the other services are.

“We are putting significant investment into this with a strong advertising campaign. We won’t be going out straight away with an advertising campaign, so it will be a soft launch but then in April-May you can expect to see a very strong above the line campaign as well as digital and social.”

How well that marketing campaign goes and what sort of traction Hayu gets in this market will be interesting to watch.

It’s only a little over a year since the streaming wars really kicked off in this market – first with Presto, then Stan and finally Netflix, which launched back in March.

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However, increasingly the signs are that the market is about to get a lot more crowded.

The Walt Disney Company is reported to be seeking a telecommunications partner to help it launch into this market in a move that would certainly have an impact on the competition in the children’s viewing market.

Such a move would impact both Foxtel and the ABC, both of which have strong offerings in that space.

But the more interesting play is the growing speculation that global internet retailing giant Amazon is looking to launch its streaming service in this market on the back of the new show launched by ex-Top Gear hosts Jeremy Clarkson, Richard Hammond and James May.

 James May, Jeremy Clarkson and Richard Hammond.

James May, Jeremy Clarkson and Richard Hammond.

Top Gear is a highly popular franchise in this market and at this stage it appears none of the other SVOD players have the rights to the show, in a move that appears to be feeding the rumour mill on this speculation.

Were Amazon to launch in this market it would not only further fragment the market but also likely drive another round of marketing and consumer awareness about the product.

It is also likely to have a clear impact on the likes of Foxtel which increasingly sees its overseas suppliers such as NBCUniversal and Disney looking to cut out the middleman and go direct to consumers.

foxtel logo-234x108Under Foxtel’s current price structure it is likely that a number of consumers will be wondering if and when these SVOD services arrive they should drop some of the entertainment and kids bundles and instead just get the $10 streaming service or even drop the service altogether.

Such a consumer shift would potentially put further pressure on the PayTV operator’s average revenue per user and leave sport and news as the two major lynchpins of the Foxtel offering.

In his presentation on Friday, Jay McNamara. executive vice president of strategy development & analytics, noted that the SVOD market was growing rapidly and that its move into Australia was part of a clear global play aimed at an audience of some 218m streaming customers.

SVOD worldwide

Screenshot from Friday’s Hayu presentation.

“You may be asking yourself ‘why now’?,” McNamara told the room of journalists. “NBC has been doing this for a long time so why is NBC coming to market in 2016?

“As you know the SVOD space has exploded in the last few years’ it is growing faster than any other segment of the media.

“At first it was led by the US with Netflix and all of the growth seemed to come from there, but as we look at the landscape today we know that the next (wave of) growth is going to come from Australia and other markets outside the United States and eventually it will surpass it.

“The numbers tell us the time for Hayu is now. Amid all of this growth no one is offering a pure unscripted reality service targeted to who we believe is a really passionate active fan base.”

Whether that reality TV offering gains traction in this market will be an interesting test, as others also eye the market.

It will also be keenly watched by local players wondering just how fragmented consumer consumption habits could potentially become.

Nic Christensen is the media and technology editor of Mumbrella. 


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