Viu in the sweet spot as it grows subs and profitability

PCCW's Viu streaming business has hit the sweet spot for growth, posting robust financial numbers just as it takes on a big new strategic investor. The unit, one of southeast Asia’s biggest video streamers, grew revenue 30% and paid subscribers by 21% in the first half, according to a PCCW filing.

PCCW’s OTT business, which comprises Viu and other content services, posted a record first half result, with 24% higher revenue of 971 million Hong Kong dollars (US$124.4 million) and EBITDA of HK$165 million ($21.1 million), a nine-fold increase.

The company said Viu had boosted monthly active users (MAUs) by 8% over the last year to 65.5 million, with its biggest growth coming from Indonesia and South Africa. The number of paid subs has reached 11 million, up from 9 million. Viu attributed the subscriber growth to its paywall strategy and new distribution partnerships in key markets such as Malaysia and South Africa.

The healthy growth numbers follow the announcement in June of a strategic partnership with Canal+. The French TV company will invest up to $300 million in Viu, with an option to later become majority shareholder with 51%. It will pay $200 million for an initial 26.1% stake.

PCCW's flat growth

The investments would help cover Viu’s financing needs until it is profitable, PCCW said. It expects the partnership will expand Viu's global market reach and drive collaboration with the French firm on premium productions and distribution.

"With an aggregate investment of US$300 million, the partnership represents an affirmation of Viu’s leading position in the video streaming markets spanning Asia, the Middle East and South Africa," PCCW said.

Canal+ is hoping its new Hong Kong-based partner can help it grow its Asian footprint beyond the current two small markets of Vietnam and Myanmar, Canal+ International CEO Jacques du Puy told Bloomberg in an interview.

Viu's steady growth trajectory is in contrast to the flat numbers posted by its parent. PCCW posted a loss of HK$486 million ($62.2 million) for the half. Revenue grew just 1% and EBITDA just 2%. Its other subsidiary HKT, Hong Kong's largest telco, boosted revenue by 2% and EBITDA by 3%.

PCCW said the loss was primarily a result of the spike in interest rates, which drove borrowing costs 60% higher to HK$1.15 billion ($150 million).

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— Robert Clark, Contributing Editor, special to Light Reading