Digital video consumption is spiking in Asia-Pacific largely driven by strong growth in Netflix that will sustain—albeit at a slower rate—for several years to come, according to Emarketer estimates.
All Asia-Pacific countries will see faster growth in digital video viewers this year, Emarketer reports, as a result of nationwide lockdowns and social distancing measures, resulting in more people spending time at home consuming media. That momentum will continue through to 2024, it predicts.
China will remain the country with the highest penetration of digital video viewers. Currently, 92.5% of Chinese internet users will watch streaming or downloaded video content at least once per month, according to Emarketer.
It is followed by Australia with 79% penetration, South Korea with 78.5%, Indonesia with 74.5%, Japan with 71%, India with 65.2%.
Where China's digital TV landscape is dominated by local services like Baidu’s iQiyi, Alibaba’s Youku, and Tencent Video, the rest of Asia-Pacific boasts a mix of local and international players.
But one player is building its dominance in the region: Netflix. The US-headquartered streaming service has been performing strongly in Asia-Pacific over the past few years, despite being unavailable in China as a result of state censorship.
The company reported its Asia-Pacific user base grew by 63.2% in 2018 and by 53.0% in 2019. Emarketer's stimates are higher, at 77.2% in 2018 and 78.7% in 2019—because it assumes multiple users share a single subscription account under different user profiles.
Emarketer predicts there will be 97.8 million Netflix users in Asia-Pacific by the end of this year (there were 23.5 million as of September 30, according to Neflix's official figures). The market research firm expects APAC to make up 18.4% of worldwide Netflix users by year end. By the end of 2024, it expects Neflix to reach 145.3 million users in APAC—a gain of 47.5 million users from 2020.
But the chart below outlines how growth plateaued in most markets in 2019—besides India, which will peak this year.
According to Netflix's third quarter results, released on Tuesday (October 20), paid users in APAC grew by 62% year-on-year by September 30, 2020. On a quarterly basis, user growth in APAC has slowed from 13.4% between Q1 to Q2, to 4.5% from Q2 to Q3. Its Q3 user growth was likely boosted in Indonesia from July, when telco Telkom Group lifted its ban on the service.
It has also this year developed cheaper, mobile-only plans in the region. The plan was launched in India in late 2019 and has this year been rolled out to other markets including Malaysia, Thailand, the Philippines, and Indonesia.
When it comes to non-subscription digital video content, YouTube—another platform currently banned in China—remains the top free option in most countries within Asia-Pacific, according to Emarketer. In South Korea, for example, 91.5% of digital video viewers will watch YouTube at least once a month in 2020. Emarketer expects the platform’s penetration rate in Asia-Pacific will increase in 2020 before declining in 2021 through to 2024.