Matthew Carlton
Aug 6, 2015

OTT boom: Streaming companies plot Asia expansion

The region’s video streaming market is growing rapidly—but for the new entrants and incumbents the battle starts now.

Demand for on-demand content is changing the TV industry
Demand for on-demand content is changing the TV industry

Turn the clock back to four or five years ago and one of the buzz phrases at marketing conferences was ‘TV is dead’, with experts looking at the wider implications this would have for the advertising industry. While this death-knell seems to have been a little premature, there’s no doubt the TV experience as we knew it has changed considerably over the past few years, shaped, unquestionably, by the internet and technology. 

One growth area in the TV sector in Asia-Pacific (and globally) is the OTT (over-the-top) and streaming sub-sectors. The OTT market is set to reach US$8 billion by 2020, more than doubling in size from US$3 billion today. While the traditional linear TV market is still dominant in Asia-Pacific, the likes of HBO and Netflix are looking at the region’s OTT market as a source of growth, and local players are adapting offers to cope with consumers’ desires for internet TV on demand.

Viewing TV online or on mobile is not new in Asia, but Jonas Engwall, CEO of RTL CBS Asia Entertainment Network, points out that a huge amount of content is via pirate websites, partly as a result of the industry lagging behind consumer behaviour but also due to a generally “relaxed” approach towards piracy throughout Asia.

TV brands in Asia may well look to Europe and the US for ways to market such services and — for the more established organisations — to look at ways to combat the streaming startups that have experienced rapid growth.

“The West is where most technological advancements in content delivery come from,” says Engwall. Technological infrastructure is also more consistent in Western markets than in Asia, where internet coverage fluctuates widely between countries. So while rapid growth is likely in streaming services in the region, there will be more growth in the countries with high-speed internet and the best coverage. 

“You have the very mature markets like Japan, Korea or Singapore through to the very immature markets such as Cambodia, Laos and many others in between adds to the complexity,” explains Kasidit Kolasastraseni, CEO and founder at PrimeTime Solution and PrimeTime Entertainment, a Thai streaming company. 

In Southeast Asia, having access to faster bandwidth makes streaming services more appealing and scalable; 4G upgrades in many markets across Southeast Asia will mean mobile-only streaming platforms are key and are already taking off in a big way. Patrick Grove’s Catcha Group, for example, has launched ‘iflix’ and aims to become Southeast Asia’s equivalent of Netflix — even though Netflix has itself been eyeing Asia for a while. Catcha is marketing iflix as a contemporary entertainment source from “disruptive local entrepreneurs and Hollywood heavyweights”. For one monthly fee, subscribers can watch an unlimited amount of television shows and movies on their phone, laptop, tablet or TV any time they choose. 

Content on iflix includes both locally produced and well-loved shows from the UK and the US such as Sherlock and The Big Bang Theory

Local content is key, says Bengt Jonsson, VP, APAC, at Irdeto. “Brands that want to be successful must not ignore local and ethnic programming,” Jonsson says. “Take Malaysia, Thailand and Singapore, where you have large ethnic communities. Unless you have a service that caters for all in terms of choice, language and interest, not reliant solely on Hollywood, you won’t fulfil your potential.”

Industry figures predict more fragmentation in the region before it gets closer to resembling the more mature models of Europe and US, which are now in a consolidation stage. “Newer and better infrastructure and speeds, and a young consumer base with higher disposable income, will have Asia leapfrog and innovate more specific models geared toward Asian consumers” says Clay Schouest, regional strategy leader, Carat, APAC. “You could imagine the large Asian social platforms like Line and WeChat could start to incorporate streaming services.”

It remains to be seen how successful global players such as Netflix, Amazon, Hulu, Apple and Google enter or expand their presence. Alibaba announced it will enter the game in China and add to the already highly competitive landscape there.  

Established TV players are also responding to the challenge. RTL CBS Asia has focused on a 360-degree content approach and making all its content available via “all” access methods, including traditional set-top boxes; catch-up VOD via a set-top box; mobile and internet simulcast; and mobile and internet catch-up.

“Competition is good for all industries as it keeps everyone on their toes” said Engwall. “We are seeing that most incumbents are naturally improving their content offerings. This will only continue and ultimately be very beneficial for consumers.”

Our View: We predict most operators in the region will take a pay and play approach.


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