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Japanese e-commerce giant Rakuten has rebranded its video-on-demand service Wuaki, which is available in a dozen European countries and Japan, as Rakuten TV as it looks to challenge the likes of Netflix and Amazon.
And it has kicked off a four-year global sponsorship with Spanish soccer club FC Barcelona, which will feature the company name on its players’ jerseys, among other things.
Rakuten TV founder and CEO Jacinto Roca during a London visit talked to THR about his plans for the online entertainment service, its competitors and the benefits of the Barcelona partnership.
The FC Barlecona deal drew a lot of headlines as it is considered one of the biggest ever. What is your thinking behind it and what benefits do you expect from it?
The reasons for the FC Barcelona sponsorship deal are, of course, brand awareness, because the exposure a club like that can give Rakuten on a global basis is massive, but there are also certain values we share. One is empowerment. FCB is known for empowering young kids to grow in its training program. And we are trying to empower local productions and smaller and medium merchants to become global thanks to the internet.
The second value, which is very important for us, is the entertainment piece. When you look at [Barcelona star] Lionel Messi and the general play style of FC Barcelona, of course the team always wants to win, but also wants to have fun playing. That is an important value that we want to attach to the Rakuten brand. Of course, we want to make money, but also want our customers and partners to enjoy the experience with us. Rakuten in Japanese means optimism, and that concept of enjoying what we are doing is something we want to attach to the brand. In terms of global exposure, Barcelona is probably one of the top two soccer teams, together with Manchester United.
Talk a bit about the decision to rebrand Wuaki as Rakuten TV and how it fits into the Barcelona deal?
The FCB sponsorship is the starting point of the promotion of the Rakuten brand globally, but also the rollout of the eco-system in Europe. The idea is that the group of services and the Rakuten brand will all become an eco-system, and we can provide group benefits to customers on the different services.
How much will we see different Rakuten services being marketed under this deal and will we see Barcelona players promote Rakuten TV?
The goal of the FCB sponsorship is to expand the Rakuten umbrella brand globally. All the group brands are being rebranded Rakuten, and the umbrella brand will be strongly pushed in the sponsorship. In addition, every service, like Rakuten TV, Rakuten Kobo, Rakuten Viber, will have its own communication as well. It’s similar to what you see at Amazon — the Amazon brand is being promoted and different services as well. We don’t have a concrete plan yet on how to activate the sponsorship across the company, but there are various ideas we will evaluate.
Rakuten has often been compared to Amazon, which you just mentioned… what do you make of that comparison?
Amazon is a great company. The thing is, Rakuten is different from Amazon. We have certain services that are similar, such as e-commerce and digital content where we compete. But Rakuten has all the financial services vertical, which is very different from any competitor. And we also have different business models. For example, Rakuten is stronger in the business-to-business-to-consumer model, the concept of marketplace. In digital content, we are trying to develop a closer relationship not only with Hollywood productions, but also local productions. In that sense, we have competing services, but a different DNA.
Talk a bit more about how you position and want to promote Rakuten TV!
We really want to make it a very strong and unique proposition based on two pillars. One is a stronger focus on movies than our competitors. We have the positioning “Your Cinema at Home” and have content deals with all the major Hollywood studios and local partners. We think that there is an opportunity while our competitors have been more focused on TV shows. And second, we have the eco-system. It’s not only about Rakuten TV, but all the Rakuten services, which will differentiate us.
You mean Netflix and Amazon when talking about competitors focused more on TV shows…
Mainly Netflix and Amazon. They have done a great job at producing their own regional shows. We think there is an opportunity in movies.
You don’t have a subscription service. Are content rentals or purchases more popular on Rakuten TV?
Rentals are what most people are doing. But we are trying to promote the acquisition of titles, because in digital, the cost of selling a movie is the same as renting it, so we can be much more aggressive on pricing and can try to educate costumers on owning their library. For us that is something very important.
So subscriptions are no focus?
For movies, no. With TV shows, you have many seasons and episodes, so you become a subscriber. With movies, you want to decide on this or that movie. A subscription doesn’t really make sense, because every movie is different.
What are the biggest markets in Europe for Rakuten TV?
Spain is still the biggest market for us, but the U.K. is growing much faster, so it is catching up in the next six to 12 months. France and Germany are also growing very fast for us.
You just announced that Rakuten TV has more than 1 million users in the U.K. and 5 million across Europe. What kind of growth do you expect in the coming years?
Overall, our business is growing over 50 percent year after year. We expect this to continue for the next three, four years — in users, revenue, overall usage of the service. We are experiencing very fast growth.
Could we see Rakuten TV rolled out outside of Europe and Japan? Any plans for Asia or Latin America?
Today, we are present in 12 European countries and Japan. We have to see in the next 12 months that the FCB sponsorship is giving us the brand awareness [boost] we are expecting there. A second area will be to aggressively continue expanding into more geographies where the opportunity is big, such as Eastern Europe, Africa, Latin America and Southeast Asia, especially emerging markets where the studios have limited distribution.
How do you think about the U.K. compared to other European markets and does Brexit change your thinking? You just announced you would invest in Britain further.
For us, the U.K. is a super important market. We consider it as being within the European region and really want to promote Rakuten TV in the U.K., with a strong campaign push starting in September.
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