YouTube’s Search for the Next ‘Gangnam Style’

YouTube’s Search for the Next ‘Gangnam Style’

By Bruce Einhorn on February 28, 2013

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One of the ritziest addresses in Tokyo is Roppongi Hills, a vast commercial, retail, and residential complex with two art galleries, the Grand Hyatt Tokyo, and tenants including Goldman Sachs (GS) and Barclays (BCS). There are also bald vampires clad in tighty-whities and body paint filming in Google’s (GOOG) new video studio.

The Roppongi Hills studio is central to YouTube’s first significant effort at audience-building in Asia. The online video giant’s other two studios, in Los Angeles and London, help popular creators develop original programming for its online video channels. In Japan, YouTube’s biggest regional success story in Asia, the company is recruiting online video stars to bolster its local-language channels with more targeted original programming and higher production values. YouTube only launched dedicated local-language channels for Southeast Asia last year, and censorship still keeps Google’s video service out of China. Compared with the U.S., “Asia has come a little bit later” for YouTube, says David Macdonald, head of the video service’s Asia-Pacific content operations.

Local programming is important for advertisers who want to reach Asian audiences, says Trevor Healy, Singapore-based chief executive officer of mobile advertising agency Amobee. “You can get more creative in who you target,” he says. Videos like the Korean rapper Psy’s smash hit Gangnam Style (with more than 1.3 billion YouTube views) or smaller successes like the 600-odd “Eat Your Kimchi” clips by Simon and Martina Stawski, a Canadian couple who live in Seoul and have close to 500,000 YouTube subscribers, could be the breakthroughs YouTube needs. Psy’s overnight global fame demonstrated the potential of Asian-made content, says Healy: “When something goes viral in Asia, it really goes viral.”

Gekidan Squash, the four-person Japanese company whose locally popular “Stalking Vampire” videos feature the monsters in body paint and underwear, is among those using Google’s Roppongi Hills studio. The venue is “awesome,” says Tatsuya Otsuka, a 32-year-old Gekidan Squash actor and scriptwriter who once shot in public parks or friends’ homes. Now he has access to a recording studio, a make-up room, editing gear, and in-house consultants. “We can probably make some ridiculous footage, like kicking a man high up in the sky, with very high picture quality,” Otsuka says. “There are so many things we can do here.” YouTube’s Macdonald says he regularly fields queries from indie musicians and video artists who are looking to expand their audience across international lines. “My answer is, bring yourselves and a bunch of your friends in,” he says. “We can teach you the ways of YouTube.”

In Japan, YouTube and other Google video sites had 50.8 million unique viewers in December, a 30 percent rise over the same period a year earlier, according to comScore data. That’s 43 percent more than the country’s No. 2 online video company, Tokyo-based Dwango. (Google won’t break out YouTube’s earnings, but says it’s profitable.) YouTube says it has struck programming or distribution deals with most major media companies in Japan, South Korea, and India, though it won’t name its partners. YouTube has agreed to host a Chinese channel showing programming from state-owned CNTV outside the country.

Among YouTube’s obstacles, fewer Asians want to appear in the spotlight than Americans, says Macdonald. “Making them feel comfortable with being in front of the camera is a bit of a challenge,” he says. “In the U.S. we have had rich, organic growth on YouTube, but in Asia we have had to help coach some of the off-YouTube creators to move onto YouTube.” Indian cooking blogger Rajani Saran Gupta, who’s posted her 618 videos from her home outside Delhi, gets 1.2 million monthly views on her Hindi channel, Nishamadhulika. Last month a YouTube consultant suggested that she boost her traffic with links to related recipes and other tweaks. Gupta says she’s confident YouTube is the right partner. She plans to launch an English-language channel soon.

The bottom line: Google’s streams in Japan jumped 30 percent in December from a year earlier, and the company is trying to build new regional stars there.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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