Hayu not threatened by free-to-air reality rivals

Pippa Chambers
By Pippa Chambers | 14 May 2018
Hayu sits at $5.99 per month, which McDermott says is a price point that won't change.

NBC Universal-owned streaming platform Hayu has doubled audience watch time and has upped the amount of content on the platform to 5000 episodes, as an increasing number of Australians submit to the lure of US reality TV.

Speaking to AdNews, London-based SVP of branded on demand and MD international Hendrik McDermott, says the success Down Under has been “phenomenal”.

While he wouldn’t give exact numbers, he says subscribers have consistently been on the up and engagement time has doubled since its 2016 market launch, from six hours to 12 hours per month, per person.

“We don't normally talk about our subscriber figures publicly, but on the engagement side we've seen video viewing really grow exponentially,” McDermott says.

“We've seen 500% growth of our weekly video stream since 2017.

“There's two ways to accomplish that. One is to add many more subscribers and the other is to have those subscribers watch more video. We're of course interested in both, but we've seen a really strong uptake in terms of the volume of content that people are watching. We're seeing about an average of 12 hours per user per month of content viewed on our platform.”

He says it started at about six hours per user per month, and that's gone up over time thanks to key shows such as Keeping up with the Kardashians, the Real Housewives franchise and spin-offs such as Vanderpump Rules.

To capatilise on these popular shows, like Vanderpump Rules, and drive up interest in Australia, Hayu has been bringing the stars of the shows Down Under. Late last year Vanderpump Rules star Stassi Schroeder hosted an event in Sydney for fans.

Looking for more content deals

Hayu takes the bulk of its content from NBC Universal's flagship brands of E, Bravo and Oxygen. While it has a vast chunk of the Housewives series, Foxtel holds the rights to Melbourne and Sydney Housewives.

Hayu launched the service with about 3000 episodes of content and is about to cross the 6000 episodes barrier. About 750 episodes per year come from NBC Universal and almost all of those enter the service on the same day as they air in the US.

Hayu, which McDermott says is “actively in the market trying to acquire content”, has also been expanding the service by acquiring third party content. Last year it completed a large acquisition from Viacom to bring in titles such as Laguna Beach, The Hills and Jersey Shore.

McDermott says despite these “nostalgia package” shows no longer being in production, they are proving hugely popular.

It also recently struck a deal with American digital cable and satellite television channel A&E, securing exclusive Hayu content for shows such as Making a Model with Yolanda Hadid, as well as Dance Moms.

McDermott says it takes consumer feedback incredibly seriously, so when comments come in, saying ‘Oh, if only you had this or if only you had that show”, it takes these recommendations on board.

“Fortunately, a lot of them were available to acquire from Viacom because that was really the genesis of that package and then of course, we have our own research to know what type of shows will do well in certain markets, so we put that all together to do that acquisition,” he says.

Competition Down Under

With Channel Nine also cottoning on to the US reality show trend, ramping up its on-demand reality TV slate with shows such as The Bachelor US, Love Island and Millionaire Matchmaker, McDermott says he isn't worried.

“Competition wise, it's an interesting question and we get it relatively often, but I don't know if there really is anybody who is directly competitive with us,” he says.

“We are obviously competing for eyeballs in the market, but our service is a genre-based service that has a particular focus. We've also priced it as a price point of $5.99 which is, in my opinion, a very nice price point which allows us to be a complementary service.

“We're not going directly against a service like Netflix or Stan or something like that. We're not trying to replace people's subscriptions to those. With the price we are, you can really add this on to your existing services.”

Despite the lower price point compared to Netflix’s $9.99, or Stan’s $10, Channel Nine’s increasing box sets of reality TV are free.

Nine's top performing shows on its VOD platform 9Now include the UK's Love Island, Four Weddings USA and other international shows such as The Bachelor and Snog Marry Avoid – which all compete with Hayu's reality content.

See: Nine's binge-worthy content boost sees engagement rocket

“We heard about that [Nine] and the reality for us is that more viewing of reality TV is music to our ears. We've always known that reality TV is a hugely popular genre. This is just another proof point of that,” McDermott says.

“People watching more and more reality is great for us. We are the home of reality TV so, if there are more and more reality lovers and reality fans, they will be able to find our service and watch even more content.”

While McDermott, says there’s room for others to target its audience of predominantly 18-45-year-old females, he argues that one of Hayu’s key points of difference is its social engagement across Facebook, Snapchat and Instagram.

“One of the key things we do, both from an engagement perspective and from a marketing perspective, is to put short-form video into those platforms,” he explains.

“We create that content ourselves through our in-house team based in London and it includes mash-ups of content, like funny or outrageous moments of clips from the shows that we put together. We put these not just onto our own platform, but throughout social media as well.

“From there they get a lot of engagement in terms of people commenting with us, sharing them with their friends and putting them into other places.”

Hayu serves up news items realted to its content:

Marketing strategy shift

McDermott was visiting Australia with Hayu’s VP of marketing Richard Howard, helping foster Hayu’s growth on the FetchTV and the Telstra TV platforms.

Howard says its marketing strategy in Australia has evolved over the last two years as the brand matures.

“Certainly, at launch we used a lot of the more traditional above-the-line tactics like TV and outdoor and that was really to try to drive brand awareness,” Howard says.

“As the brand matures, we're now driving more and more money into digital.”

He says a strong area in particular is paid social to push its “compelling short-form content” that its audience “just want to watch and have fun with”, combined with its data-driven targeting.

He says the ability to access its talent, through its parent company NBC, also gives it “some really big PR wins”, which consumers are very responsive to.

“I wouldn't say we'll be going a 100% digital,” Howard says.

“We very much market in the channels that we believe are right at the time. So, we will continue to spend heavily in digital, but also invest in key awareness driving channels - out of home being one of them.”

GroupM is a global strategic partner for NBC Universal and in Australia, Hayu works with MediaCom for its media planning and buying.

It doesn’t have a creative agency of record, relying on its internal creative and content team.

Tackling the voice automation challenge

Howard says it is currently in voice training for Amazon’s voice automation offering Alexa in the UK, allowing its content to be searchable via your voice, but it is yet to secure this offering in Australia.

If Google Home here can link with Stan and Netflix, why can’t Hayu?

McDermott says it is in discussion “with quite a few different platforms” to get the widest reaching distribution, adding that “nothing is off the table”.

“We do want to have the broadest reaching distribution possible. The issue for me, practically, is resource. I've got a team based in London. We are in seven markets at the moment and have just launched into four Nordic markets - we've a lot on,” McDermott says.

“Our technical pipelines can be challenging sometimes, but there's no question for us, getting that broad distribution is a priority.”

See: Google Home launches in Australia with Netflix and Stan integration

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