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16 January 2020

Japan’s OTT penetration still sucks, so Hulu harnesses NPAW QoE

Hulu’s Asia Pacific operation over in Japan, owned by Japanese broadcasting services firm HJ Holdings, has been something of an enigma in contrast to its long-lost US sister. With SVoD penetration in Japan still startling low, there is a huge opportunity for expansion, and while Hulu Japan can’t match Netflix and Amazon Prime Video for content, it can certainly try to trump its two chief rivals for quality of experience.

Hulu US continued to provide the technology infrastructure for Hulu Japan after it was sold to Nippon TV in 2014, although the two entities have more recently been taking increasingly unparalleled paths. The latest being Barcelona-based QoE video analytics specialist Nice People at Work (NPAW) securing a deployment at Hulu Japan, adding its YouBora analytics technology to Hulu Japan’s existing video intelligence layer to support business growth.

As you might expect for a company the size of Hulu Japan and with all the complexities that go with the Japanese market (language, culture etc.), this deployment was not a walk in the park for NPAW – with some systems integration assistance from Tokyo-based OVP provider Play.

The vendor explained to Faultline that a modular approach was taken to tailor a specific plan for Hulu Japan (which is typical for customers exceeding a certain number of views). Hulu Japan picked the core YouBora analytics technology, the most advanced component of the suite, with a heavy focus on 1:1 user tracking, reports and alerts functionalities to monitor individual user experience to efficiently troubleshoot and adjust platform performance.

Something called “happiness score” is a major KPI for Hulu Japan, we were informed, to assess overall individual user experience. Of course, happiness is highly subjective, which is where NPAW’s specialist approach comes in. It accounts for a myriad of metrics including quality, audience, engagement, and “unlimited” filters, all applied without pre-configuration, which NPAW says is a huge advantage for customers.

NPAW prides itself on a flexible approach, adapting to customer demands and constantly evolving the product suite to ensure customers can cut data to get actionable insights in real-time.

NPAW joins Bitmovin at the Hulu Japan deployment. The US encoding expert is part of a “massively optimized bitrates” initiative also integrated by Play. Hulu Japan uses Bitmovin’s per-title, 3-pass, multi-codec encoding suite – selecting the technology based on the nature of products and APIs. As a result, Hulu Japan can reduce CDN and origin storage costs while improving picture quality, by contextually adjusting the resolution and bitrate ladder of content to ensure quality consistency.

Meanwhile, we understand that Hulu US has developed the majority of video analytics capabilities in-house, with some QoE analytics backing from Conviva.

Hulu Japan claims a 25% share of Japan’s subscription VoD market, gradually climbing the ranks over a six year period. Borrowing numbers from our research arm Rethink TV, Hulu Japan sits on approximately 1.6 million paid subscribers today. This would put the entire Japanese SVoD market on just 6.4 million subscribers, in a country of 130 million people – surely not?

There’s no way just 5% of the population in a technologically advanced country subscribe to online VoD services. Something stinks here. Hulu Japan does not have a free, ad-supported tier, so we reckon it’s because Hulu Japan registers a high number of free trialists and has omitted some of the smaller SVoD entrants – perhaps counting only its main rivals Netflix, Amazon and maybe Unext. However, it may come as a surprise to some that Japan has a very low penetration of OTT video services, with estimates around 13%, much to the benefit of video rental stores which are apparently still surviving against the odds in Japan.

Terrestrial TV remains the most popular viewing format by far, followed by ad-supported services, with YouTube hugely popular in Japan.

Hulu isn’t NPAW’s first rodeo in Japan, gaining valuable experience at Abema TV and Fox. In fact, NPAW’s positioning in Japan is significantly more substantial than public records suggest, the specifics of which we are not allowed to publish.

“Some of these are purely subscription-based services, others have hybrid models. We foresee more video services around the globe demanding our YouBora Ads intelligence platform in the coming year. Technical teams will still use the “core” YouBora and business teams will demand insights of their area of work. I can see that happening in the US and EMEA already,” a NPAW representative told Faultline.

A quick browse of some online forums brings up complaints about Hulu Japan’s lack of premium content compared to Netflix and Amazon, although no reviews could fault the platform technically. Hulu Japan may not have the budget of its two closest competitors in SVoD, but the company can strive for the crown of Japan’s best OTT video QoE.