On the other hand, U-NEXT is pursuing a different kind of strategy as compared to its international competitor. The platform which operates only in Japan, provides a variety of content distributed from global companies like Warner Bros, Discovery, NBC Universal and Paramount Global on top of domestic titles from TBS, TV Tokyo and NHK etc. as well as streaming of sporting events. However, despite its wide range of sourced content, it actually doesn't dabble in original Japanese productions like Netflix, Amazon Prime Video and Disney+.
NIKKEI Trend did an analysis on U-NEXT to examine its strategy which seems to be working as the platform overtook Amazon Prime Video to become the current No.2 in Japan and is edging closer to the Netflix which has been dominating the No.1 spot for years. While we may not be able to access U-NEXT from outside Japan now, it might be worth looking into how they managed to do this despite their limitations.
What I found quite interesting was how they adjusted their strategy to fit their size and limitations rather than try to match what the richer and bigger players are doing. Quantity of content is indeed a huge differentiator especially if users need to choose just one streaming platform to pay for so it makes sense to be a generalist rather than a specialist.
As to whether their rise will in turn cannibalise the market shares of other players or help to grow the pie further, it is still early to predict. At least for now, given that their focus is still the domestic market and that it will be costly to globalise because you need to have things like subtitles and different languages for the platform, I think that getting access to U-NEXT is still out of the question for those located outside of Japan in the foreseeable future.
* U-NEXT's paid membership numbers are going up and reached 4,339,000 people as of May 2024 compared to 2,925,000 at the end of 2023. This huge jump was partly due to the integration of Paravi in 2023. Revenue from the content streaming business had also increased by 19% to reach JPY 85.1 billion in the financial year ended August 2023.
* At present, it is said that there are as many as 360,000 titles on the platform which encompasses Japanese and foreign dramas and movies, anime, stage plays, musicals etc. While some titles may not have high viewership numbers, they are still kept in the lineup so as to grow the size of the catalogue. This is a strategy which U-NEXT had come up with since they do not have any original content.
* During the COVID-19 pandemic, streaming services had become more attractive to consumers. Thanks to the range of its offerings, U-NEXT managed to attract more members because many of them had been in search of specific titles or content that they wanted to watch and found them on the portal.
* In order to make this "quantity is king" strategy possible, U-NEXT internalised the archive management process which includes recording of metadata, encoding and management of data stock. This has allowed them to control costs while being able to keep increasing the amount of content it provides to members.
* U-NEXT initially had a weakness of providing the least number of Japanese and foreign dramas as compared to its competitors. However, the situation started to change since 2021 when it started providing exclusive access to HBO dramas such as "Game of Thrones" and merged with Paravi in 2023. Paravi had been the platform to go for TBS and TV Tokyo dramas and variety programmes. Not only did they manage to get new members through these moves, it had also helped them to "recapture" former users who had been unhappy with its lacking range of content.
* One other benefit from the integration with Paravi was the boost in brand awareness. At the end of each programme's TV broadcast, there would be a short clip mentioning that past episodes can be viewed on U-NEXT. This allowed U-NEXT to reach people who they were unable to target through digital marketing and make the viewers be more aware of its presence.
* While free platforms like TVer boasts of high viewership numbers i.e. as many as 40 million unique browsers in a month, drama archives on the platform tend to be limited to the first three episodes plus the latest episode only. As such, TVer actually becomes the window leading to U-NEXT in a way as consumers look for the full series on the latter after sampling it on TVer.
* As to why U-NEXT doesn't make its own dramas and movies, it admitted that even though they may have the desire to do so, they are comparatively weaker when it comes to money. As such, rather than spend money on in-house productions, the company has made a conscious choice to build up its offerings through acquiring content from outside.
* In the meantime, U-NEXT had formed production teams working on creating original novels and manga in 2020 and 2022 respectively. One of their original novels "Danchi no futari" has been made into a NHK BS drama airing since September 2024.
The reason why they have chosen to do so is that they are still unable to invest on a continuous basis on production of dramas and movies like their richer competitors. Since the publishing culture is strong in Japan, they decided it would be best to build their presence from scratch by working on original content in this manner.
* U-NEXT is also looking into improving its live content such as adding sports and music shows. In 2023 alone, there were 2,888 live sports broadcasts and 160 live music shows released on the platform. It has also entered into a 7-year partnership contract with the English Premier League since July 2024 so the U-NEXT Soccer Pack was launched in August this year for those who want to watch these live matches. The reason for this move was said to be the high interest in soccer content and that there are regular matches being played thus allowing U-NEXT to retain users.
* Thanks to the tourism boom in Japan, there is also strong interest from accommodation facilities like hotels which want to provide U-NEXT access to their guests.
* U-NEXT is known for its high retention rate when it comes to its paid membership. Although its monthly subscription is on the high side i.e. JPY 2,189, the membership allows full access to electronic books and magazines and earning of points which can be used within U-NEXT.
* While faced with strong competition from the bigger foreign platforms, U-NEXT intends to focus on its strengths and aim for the next milestone of 5 million users. This is expected to help them proceed to the next stage and do more beyond what is currently in place.
No comments:
Post a Comment