• Wary of Netflix, Viacom, Disney offer more programs online
  • With less pay-TV penetration, foreign markets are up for grabs

If you want to watch the Disney Channel or BET in the U.S., you pretty much need a costly pay-TV plan, one with hundreds of networks you couldn’t care less about. In other countries, it’s increasingly a different story.

Entertainment companies led by Viacom Inc., 21st Century Fox Inc. and Walt Disney Co. are forging ahead internationally with online offerings of popular cable fare, even as their U.S. viewers remain tethered to pay-TV services from Comcast Corp. or DirecTV.

After watching Netflix Inc. take a big bite out of their U.S. audiences by offering shows on-demand and on all devices, the media companies are racing to avoid a similar fate overseas, where pay-TV providers aren’t as powerful. That’s an opportunity to offer movies and shows outside the usual cable universe and appeal to customers who watch more on laptops and mobile phones. 

“One of the things that made Netflix successful was providing access to consumers on tablets and the like -- something people wanted,” Bob Bakish, chief executive officer of Viacom International Media Networks, said in an interview. “Traditional pay TV was very slow to do that.”

Unlike the U.S., where 84 percent of homes with a TV have a cable or satellite subscription, penetration is lower in Asia, Latin America and Europe, according to data from IHS Inc. and Bloomberg Intelligence. In those markets, U.S. media companies have more freedom to market directly, without risking the wrath of incumbent pay-TV providers. The new services could also serve as blueprints for similar initiatives in the U.S.

Mobile Partners

New York-based Viacom is looking to partner with mobile providers to offer channels like MTV and Nickelodeon to smartphone owners, Bakish said. It’s also considering going directly to consumers with networks that now are only in the U.S., like TV Land.

Viacom isn’t alone. U.K. viewers can subscribe to DisneyLife for 10 pounds (U.S. $14.30) a month. The Web-only offering from the world’s largest entertainment company provides movies, TV shows and music. Comcast Corp.’s NBCUniversal last month began selling Hayu, a Web-only service for reality TV in the U.K., Ireland and Australia. Customers pay $4.50 to $5.50 a month depending on the country to watch “Keeping Up with the Kardashians” and “Top Chef.” Viacom’s own Noggin kids service is available online in Latin America.

“People are spending a lot of time out of their homes and need to have live content wherever they are,” Carlos Martinez, president of Fox Networks Group Latin America, said in an interview. “They need mobility and accessibility.”

A la Carte

Fox isn’t bypassing pay-TV providers all together. Martinez sells a service called Fox Play that lets existing cable and satellite subscribers across Latin America watch programs from more than a dozen Fox channels on-demand and live. That’s similar to apps in the U.S. known as TV everywhere, except with more flexibility: Customers of Fox Play can watch TV on any device anywhere in Latin America.

Yet the company is marketing an a la carte offering as well. The most popular programming is soccer, the biggest sport in Brazil, Mexico and Argentina, Fox’s top markets. That’s why Martinez began selling a subscription this year for Copa Libertadores, the biggest club tournament in Latin America. Anyone can pay a fee to watch every game of the event, which runs through July.

“We are using sports to start measuring what the consumer wants in Latin America,” Martinez said.

Viacom’s Bakish sells a product similar to Fox Play in Play Plex, a suite of apps for MTV, Nickelodeon, Comedy Central, Spike, the Paramount Channel and BET. The apps are available in more than 40 markets so far.

Bakish plans to expand Play Plex through mobile providers. He met with a number of potential partners at Mobile World Congress in Barcelona last month, including an Indonesian carrier that wants Nickelodeon and has more than 100 million subscribers.

Some channels, like BET and TV Land, aren’t widely distributed internationally. With those, Bakish said, the company has discussed selling over the Internet either on its own or with the help of mobile providers.

“We are in a range of conversations,” Bakish said. “There is a significant incremental penetration opportunity.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE