FANS of Korean dramas and pop music now have a perfect place to converge: free online video streaming portal Maaduu.com.
Launched by three childhood friends from Klang and two Singaporeans late last year, Maaduu is the only legal video-on-demand (VOD) site dedicated specifically to Korean entertainment in the country.
Today, a mere year later, it has built up a library of about 150 drama titles totalling more than 2,000 hours and has drawn over 700,000 active sign-up members and nearly 1.5 million fans on Facebook.
Maaduu has also attracted a roster of advertisers that include DiGi, Maxis, Astro, McDonald's, Pantene, Drypers and Libresse.
Interestingly, the portal that caters mainly to youth was the brainchild of a few men in their 40s.
Prior to setting up Maaduu, the five entrepreneurs operated an e-learning business for a decade. The technological expertise from that venture helped make the shift to the current business easy.
So how did a bunch of people who were not Korean drama fans knew what content to provide? They just followed the Web traffic.
Maaduu.com chief executive officer Dennis Lee, one of the Malaysian partners, says entertainment has got a huge following on the Internet, but unfortunately, particularly to illegal sites.
"We analysed the traffic and broke the kinds of content down, and saw that South Korean content was the craze. We did not decide to create the craze but to just follow and service that craze, so it became a really easy job. Rather than trying to create demand, we just service the ready demand," he tells StarBizWeek.
"When we started we didn't build the business based on the topline and cashflow but only on what the consumers wanted. We had faith if we provided what they wanted, the money would come in."
They pumped in RM2mil initially. "It was very scary to pump in RM2mil when we had zero viewers. We just believed, we did it, and they (the viewers) came."
Like bees to honey (what madu means in English) they come. More than 350,000 unique viewers are drawn to Maaduu content every month.
While none of the Maaduu partners were Korean drama fans initially, managing partner Syed Yazrine Shahab says that they are now. They caught the bug while finding out why people like Korean dramas!
Today, Lee counts himself among the hardcore fans. "I can finish a 16-episode drama, which takes 16 hours, in two days!" he says.
"I can't wait for the whole two months to finish one episode per week. Now I'm very immersed in it, and I can understand why Malaysians are so crazy about it. The dramas have this emotional connection create an emotional attachment not only with the characters and storylines but also due to the Asian culture."
In fact, he says, the longer the drama series tend to attract the most viewers as the fans don't want the stories to end.
While the idol dramas (which feature good-looking boys) as well as romance and family melodramas are highly popular, you can find many other genres, including mystery and historical epics.
Maaduu offers dramas from South Korea's two biggest network broadcasters - KBS and MBC - just 48 hours after they are released in the native country. "Our rights actually allow us to simulcast (broadcast simultaneously) with South Korea, but we need to create the subtitles, which is why there's a lag of 48 hours," Lee explains.
All the dramas have English subtitles, while Malay subtitles are available for about 30% of the shows currently. By the end of the year, Maaduu will also provide Chinese subtitles.
Maadu has ambitious plans. Besides expanding its content to include Korean variety shows and movies, it is also looking at "conquering" Asia-Pacific.
After Malaysia, it started Maaduu in Singapore in July. Now it is negotiating to cover Indonesia and Thailand with the hope of seeing it materialise in the first quarter of next year.
"When we first started, we did not have exclusive rights since we didn't want to pay premium prices. But after KBS and MBC saw our phenomenal growth, effective Jan 2012 we will have the exclusive rights for video on demand and mobile in Malaysia, Singapore and Indonesia. We will also have it on the iPad and iPhone by next month, so it suits the current lifestyle of people," Lee says.
Maaduu can afford to be bolder and explore new territories now that it is seeing some financial success. "We have passed 50% of our revenue projection of RM6mil for the year ending March 31, 2012," reveals Lee.
Maaduu is unfazed by its online competitors or the DVD pirates.
"The market is quite segmented. People who watch DVDs will continue to watch DVDs; they're creatures of habits. We are targeting people who are already online; they never watch DVDs and watch on pirate sites," Lee says.
"Now that we make it legal and free, we level the playing field and we also make it of higher quality with our compression technology (you get the same quality of a 1.5-2 megabits but at 300 kilobits). So it only makes sense for them to say, I'm still watching online, but I'm going with Maaduu now,'" he says. Its two largest groups of Malaysian consumers are 15 to 26 years old (44%) and 26 to 35 years old (45%) groups that fast-moving consumer goods companies are keen to market to.
Advertising spots are sold by the week. Advertisers are assured of at least 100,000 impressions (people viewing 100,000 times) for a minimum one-week buy costing about RM12,000. "However, some clients are interested in branding and want their ads to be seen more often. We provide a report at the end of the campaign to quantify the number of impressions we've achieved and other data," Lee says.
Ranga Somanathan, CEO of media specialist Starcom Mediavest Group Malaysia, says advertisers are very keen to leverage Internet to build communities and trigger conversations with their audiences.
"At Starcom MediaVest and Optimedia, across our global markets we have tested and learned the best use of online video. Placing ads in online video content via smart targeting has resulted in significantly higher recall levels then via regular TV spots. Efficacy of placing ads in online video is very strong," Ranga says.
MediaVest and Optimedia Malaysia strategic planning director Stan Chew says Maaduu has great content, but what will ultimately distinguish Maaduu from the others is how it addresses and capitalises on three key challenges: distribution, technology and innovative advertising solutions.
"Tonton is already offering mobile and also tablet solutions to further widen it's on-the-go services and Maaduu, despite offering a different solution, will need to play catch up on this very soon," he notes.
Chew says that as broadband penetration currently reaches less than 40% of the total Internet population (debatable and excluding mobile 3G and 4G). inking partnership deals with potential broadband providers and even possibly manufacturers of smart TVs or TV set top boxes and providing a more integrated system will increase its distribution and also possibly offer much better quality viewing experiences.
Replying to Chew's comments, Lee highlights that tonton's mobile delivery is Web browser-based while Maaduu's mobile delivery will be via mobile app (one-touch launch) on multiple devices like iPhones. He also notes that Maaduu has secured a three-year exclusive licensing rights VOD and mobile for its content in Malaysia, Singapore and Indonesia from MBC.
Lim Soo Shien, senior brand manager of Libresse, says that as a marketer today, it's great to have new media options beyond the traditional, expected ones. "Maaduu is definitely at the forefront of media innovation in Malaysia."
Besides the portal, Maaduu is using Facebook as an engagement tool.
"If you are active online, you'd most likely have a Facebook account and you would view on Facebook, so why not let you watch the drama on Facebook? When you do that, you're sharing it with your friends who are in your social network and that creates a viral effect if you got 200 friends, you've just told 200 friends you've watched The Thorn Birds!" says Lee.
The fans can chat at the same time when watching the dramas with social media.
"As they're watching, for example, Boys Over Flowers (a 2009 drama) the most watched drama on Maaduu they can see on the left-hand side of the Maaduu screen how many others are also watching the same drama at that time, so they can communicate and engage with each other while watching," Lee says.
On Facebook, Maaduu has garnered close to 1.5 million fans. "We exceeded one million fans in just nine months. We're the top local video entertainment site based on Effective Measure's latest figures," he says.
"When we started in September 2010 with zero viewers, we told ourselves that by the end of Dec 2010, we wanted to have 50,000 viewers. But in three days we were already at 20,000!" Within just nine months, it hit one million Facebook fans.
What will Maaduu do if the South Korean drama fad fizzles out?
"Historically there were the Hong Kong dramas in the 80s, followed by J-pop and now K-pop which started in early 2000 and is growing stronger. At some point, the popularity may taper off. This is where Maaduu's strength lies. We are just a delivery platform," says Lee. "If tomorrow everyone wants to watch Swahili shows, we will show them that. We go by market demand. We will not be too sentimental over something. Our asset is not restricted by the trend. Our asset is the audience. We get their loyalty and support by providing them exceptional service."
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