Home Analysis Hayu in Europe: SVOD like we have never seen it before

Hayu in Europe: SVOD like we have never seen it before

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hayu, the new reality-on-demand service from NBCUniversal, will have gift cards in UK shops in time for Christmas. The company believes that with its demographic skewing towards young females, a subscription to its £3.99 per month SVOD service will be perfect for the gifting market any time of year. But gift cards are just the tip of the iceberg for what is already proving to be an innovative distribution strategy.

Hayu is a direct-to-consumer service, distributed OTT to connected devices including tablets and smartphones. Television screens are a key target device, thus an early focus on Apple TV and Amazon Fire. But Pay TV operator partnerships are also at the heart of hayu’s go-to-market strategy, with the company already onboarded at Virgin Media and another UK Pay TV partnership promised any time now. This service is interesting for a number of reasons:


  1. Early example of genre-specific SVOD for the masses

hayu represents an early attempt to create a genre-based SVOD service for the mass market. The content is exclusively unscripted reality TV and many of the shows and their stars are already well known (including ‘Keeping Up with the Kardashians’ ‘The Real Housewives’ and ‘Made in Chelsea’) and have built their appeal on linear channels like Bravo and Oxygen (owned by NBCUniversal).

Guy Bisson, Research Director at Ampere Analysis, (as we reported previously) believes that as SVOD giants like Netflix and Amazon try to move up the value chain with more original content, and towards the middle ground of mass-market premium entertainment, there is an opportunity for thematic online video services from studios or niche players. “These could be studio led, like they are today,” he notes.

Hayu itself has invented the term ‘reality-on-demand’ to describe the genre-driven nature of the service.


  1. Hayu takes first release window, at expense of channels 

A key selling point for hayu is the fact that its shows are released to the SVOD service (which is currently in the UK, Ireland and Australia) no later than the morning after American broadcast. Speaking at OTT World Summit in London last week, Hendrik McDermott, Senior VP, Branded on Demand for hayu at NBCUniversal International, said this has already created an early morning primetime on the platform as the super-fans log-in to see the latest episodes as soon as they appear online.

McDermott was challenged about what this means for traditional NBCUniversal channel partners in markets where hayu is present. He did not argue with the contention that ‘day-and-date’ means hayu now owns the first release window (internationally) for these popular reality shows. But he said that much of the content on the service has never appeared in the local markets before (including in the box sets), and that hayu would serve a different market to linear channel partners.

“It will be different people. If they want the content instantly then they will pay more for it. I think this will increase the viewing of reality TV in all markets.”

Typically the content arrives into the international catalogues between 7am and 9am the day after U.S. broadcast. Referring to the early morning primetime generated by their release, McDermott says: “It proves our research, which showed that people do not want the plot exposed [to them by friends or via traditional or social media] before they see the show.” He said the morning primetime will be boosted by offline viewing; hayu is working on a download-to-go feature that will make it easy to watch during a bus or train commute.


  1. Immediate focus on Pay TV distribution partnerships

Hayu has wasted no time partnering with Pay TV operators and has two cooperation models to show the world already. At Foxtel in Australia there is a simple bundling arrangement: existing Foxtel customers who have E! (the NBCUniversal channel) in their subscription can watch hayu at no additional charge, via the direct-to-consumer hayu app. This is therefore a similar approach to many TV Everywhere offers where people who subscribe to a channel on Pay TV get access to that channel’s multiscreen offer as well.

At Virgin Media (the UK cable operator) there is a different bundling arrangement and a different technical approach, but the effect is the same. Customers of the TV XL TiVo package can watch hayu as part of that subscription, and other Virgin customers can add hayu to their package for £3.99 a month (the same price as if you sign-up to hayu direct). As with Netflix on Virgin TiVo, the hayu app has been technically integrated into the set-top box (onboarded) and can be accessed via the ‘Apps & Games’ section on the device or via channel 210 in the programme guide (where you then press the Red Button to launch the app).

Hayu has been available on Virgin Media since April and McDermott told the IBC conference (in Amsterdam) in September that average session times on hayu for Virgin TiVo customers were 60 minutes. Last week (at OTT World Summit) the figure was updated to 100 minutes. “When you think that shows are 22 minutes or 44 minutes long, this means that people are watching multiple episodes per session.” McDermott already knew that people wanted hayu on the big television screen and he says the TiVo figures also prove that they want to binge view reality TV.

Hayu will be available via Apple TVs very soon; the app is already supported on Amazon Fire TV. The service is also available via browsers (e.g. for laptops/desktops) and both iOS and Android apps for tablets and smartphones.

McDermott confirmed the hayu approach. “It is a dual strategy: direct to consumer but also seeking wide [additional] reach and distribution in parallel. The importance of partnerships cannot be underestimated.”


  1. Becoming the hub of reality TV, with third-party content

Hayu launched in its three current international markets in March and costs £3.99 in the UK, EUR 4.99 in Ireland and $5.99 in Australia. The focus today is on English speaking markets – partly for technical reasons. McDermott admitted that dubbing or subtitling into new languages (on top of existing video processing like encoding and encryption) would slow down availability of the titles, and a key selling point for the service is ‘day-and-date’ release. The service contains 4,000 TV episodes today.

“Why did we get into this space? We could see a clear growth in SVOD services worldwide and we also saw a very clear niche, because there is no other SVOD player in the market focused on unscripted reality TV,” McDermott told OTT World Summit.

Asked if he was concerned by recent OTT service closures, he said the main barrier to survival is access to content and the cost of content, and this is not a problem for hayu because 90% of its programming today is from NBCUniversal, its parent company and one of the world’s leading producers of unscripted reality TV. Hayu already knows that it can add 700-750 new episodes a year to its catalogue. A key marketing message is that the platform has deep archives as well as yesterday’s new releases. You can watch a series right from its launch if you want.

Hayu is not designed to be as NBCU-dominated as it is today. More content from third-parties will be brought onto the platform over time. “We would like to become the hub of reality TV,” McDermott confirmed.


  1. Creating a reality TV destination in front of the pay wall 

Hayu is a subscription VOD service with a big difference: a great deal of what it offers is in front of the pay wall, accessible to all. In fact the only thing that is behind the log-in is the long-form video. So even non-customer reality TV fans can come to the site, view hours of snack-sized content clips and share those clips with friends (via social networks, email and text).

There are well over 2,000 clips taken from episodes, including ‘unforgettable moments’. Hayu creates them, with some of the content mashed-up and some set to music, and some with text overlays. Fans can also read entertainment news and see behind-the-scenes footage (again, accessible to non-customers as well as subscribers).

‘Social’ is a big part of the mix. The platform is fully integrated with popular social media platforms, not just to make content (clip) sharing easy but to let fans engage in, or just follow, the conversations around shows. The company says it has taken a two screen experience and made it a one screen experience (social and TV combined). 

When hayu launched, Kevin MacLellan, Chairman of NBCUniversal International, said: “We know that reality content is a primary driver of social interaction and that fans of reality TV significantly over-index in online viewing. We set out to build a service that elegantly combines the best high-end reality shows with the most popular social media and digital news platforms. Uniquely, in hayu, fans can find it all in one place.”

McDermott declares: “We want hayu to be a place for people that love reality TV, where they can come and stay, and share with friends.” And a promotional video emphasizes that hayu “is the home of reality TV – but that is just the beginning”.


  1. Curation is key; humans provide the recommendations

It is clear that hayu, with NBCU as its parent, understands the value of ‘free’ when it comes to content promotion. And the service itself looks far more like a broadcaster catch-up portal than an SVOD library, with show teasers everywhere. Right from the home page you get the distinct sense that content is being placed before you; hayu is not just saying: ‘here is our vast library, why don’t you walk along all the shelves and see what you can find’.

McDermott confirms that curation is viewed as a big part of the value-add and that hayu has turned its back on machine/algorithm generated content suggestions in favour of human recommendation. “We have staff – our video asset managers – who rotate our featured content multiple times a day in the different territories. We believe in curation and our employees are massive reality TV fans who can recommend new content to people.”

Viewers can rate shows by emoji and other users can then search for shows by emoji – which is a clever way of introducing ‘mood’ to the search criteria. You can look for trending content and perform standard content searches. There is a ‘My Hayu’ section where half-watched shows and your own favourites (with a shortcut to those shows) can be found.

Confirming the core target market for this service as women, the hayu promotional video declares: “Hayu is a unique world of reality TV, all for less than the cost of nail varnish, and with no contract.”

A key marketing message to reality TV fans is ‘everything in one place’. “Some of our [NBCU] content is out there on linear TV or elsewhere, but this is where you will find all of it,” McDermott declares. He adds that there has been a really warm reception for the product. “We think it will enhance TV viewing; it is a product that can super-serve reality TV fans.”

Photo shows hayu service in the UK, on laptop

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NBCU: Reality TV SVOD service Hayu achieving 60-minute average session times on Virgin’s TiVo

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