Paolo Cuttorelli
May 4, 2020

Price and payment flexibility crucial for OTT platforms in Asia

The diversity of Asia's payment landscape requires a tailored and flexible approach to subscriptions, and investment in local technology infrastructure.

Various kinds of payment options available at a shop in Tokyo.
Various kinds of payment options available at a shop in Tokyo.

In the last few weeks, we’ve witnessed how unforgiving the OTT market can be for those without a clearly defined strategy. 

In the race to capture a share of a burgeoning subscription market, OTT video platforms in Asia-Pacific need to understand the behavioural and structural nuances of each market in the region, offer tailored and flexible plans and invest in technology, in order to have the best possible shot at success.

In a region as diverse as Asia, flexible payment infrastructure is necessary to build a strong consumer base in each individual market

Having the flexibility to price and bill for products in relevant currencies is fundamental to a global strategy. Subscribers don’t have the patience to convert the price of a monthly subscription to their local currency. Introducing this “extra step” in the buyer journey adds needless friction and pain into the journey to purchase. I’m often amazed that some well-known OTT services use subscription management platforms that support only the most-widely used currencies with a narrow set of payment options. This won’t work in Asia where there are literally hundreds of different payment gateways, partners and processors to accept payment.

Furthermore, with low credit card penetration in the region, OTT providers need to offer more payment options to consumers beyond just credit card billing. An inflexible payment infrastructure effectively limits growth, constrains the user acquisition funnel and more importantly, irritates users.

Effective localisation requires proper investment and understanding of what consumers favour 

Fortunately, Asia offers more varied payment methods including online debit cards, digital wallets, and bank transfers. OTT providers also need to have the ability to accept things like cash or physical gift vouchers. One thing that Asia seems to favour more than elsewhere, is offering payments via telco billings. This offers OTT providers a potentially lucrative and larger distribution channel with a possibility for revenue sharing and joint marketing activities.

To add on, local language options are necessary for OTT providers to truly connect with consumers. While it might seem obvious in a place like Asia that subscribers won’t respond to buyer journeys presented in a foreign language, some platforms continue to take this for granted and present buyer journeys in only the most commonly used languages, or in a Latin character set. One can imagine how effective a salesperson would be if he didn’t speak the customer’s language. The option of multi-language is critical in the path to going global.

The most valuable resource a business can have is data

Having the ability to segregate user and revenue data based on specific geographies or business units is a key consideration, allowing regional teams to effectively manage the business against their own user and revenue targets. It also gives regional leaders the flexibility to create products, offers, and promotions that make sense for their particular region.

For example, in APAC, one might want to create a three-day “sachet”-style subscription. Such an offer might however not work in other regions such as Europe or North America. Being able to manage products, users, and revenue by business units gives ultimate flexibility to teams and gives senior business heads the ability to see a “roll-up” view of how different business units or geographical teams are performing.

Doing business globally means that your service teams need to get geographically close to the users you plan on serving

Latency and user experience matters a great deal especially when it comes to the critical moments when you’re registering a new user and capturing valuable user and payment data. When click-throughs are laggy or provide sub-optimal user experience, it could be because OTT providers are hosting their subscription management infrastructure halfway around the world.

At a time where remote working is king, and considering your team’s physical location feels like a relic of the 20th century, geographic distance really matters. This is especially true in places like Asia or South America. I’ve personally known of infrastructure being hosted in places like the US East coast for streaming services that cater to Asia markets. While this may not seem far away, when you consider the network and connectivity speeds in some parts of the world, every millisecond matters and subscribers will notice.

Taking a subscription video service global is difficult and fraught with technical and business challenges, many of which are not apparent when first starting out on the journey. For this reason, it’s important to have enough flexibility to adapt your business as it evolves and this means meeting your customers on their own terms. It says a lot about a tech partner’s commitment to a global presence when they don’t set up new cloud infrastructure in the region where they plan on doing business. “Future-proofing” comes through experience and having the right partners, but more importantly through investing time and resources that will set a platform up for global growth.

Paolo Cuttorelli is VP and GM, APAC, Evergent

Catch up on our analysis of OTT provider Hooq's downfall.

 

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