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Lessons Learned From Trying to Create The Netflix of Asia

Chris Hampartsoumian

Regional Director – Southeast Asia

June 25, 2018


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The last three years have seen a large number of new, home-grown SVOD OTT services in Southeast Asia. iFlix, Hooq, Catchplay, Viu, Tribe and many more.  

This was in part a reaction by many of us here in Southeast Asia watching the rise and rise of the SVOD poster child Netflix as they successfully grew from a US service into new markets including Australia, Japan and several countries in Europe, breaking down the traditional idea of national video services and clearly showing that OTT services aren’t constrained by the same distribution boundaries as traditional Cable, Satellite or terrestrial TV offerings.If Netflix could grow outside of the US and roll into new countries… surely they would be coming to Southeast Asia anytime soon.  The race was on to create on all asian homegrown SVOD service. We knew the price point would be different, we knew the content would be asian and we even knew that the payment terms would be local.With the low credit card penetration, telco billing was identified as an early difference between how people pay for their Netflix subscription and how we were expecting a portion of the 600 million people in Southeast Asia to pay for their SVOD subscription - besides with 100% mobile penetration, yet single-digit credit card penetration in some countries, collecting the monthly SVOD subscription via the mobile bill was surely the key to success in Southeast Asia.

So with this, the services launched rolled out into Philippines, Indonesia, Thailand, Singapore and more. Lots of Asian programming and efforts to try and secure a more Southeast Asian centric 2 dollar monthly subscription rather than Netflix’s approximately big ticket 10 dollars monthly price.While all this was taking place through, 2015, 2016, 2017 and into 2018, Youtube was quietly racking up billions of video views and helping itself to an increasing share of the Video Ad market.  People in Southeast Asia were definitely watching videos, and yes they were watching a lot of it on their smartphones too… but a lot of it was on YouTube.At the recent APOS Summit, this was highlighted further. In Indonesia, the average mobile top up is around 2.20 USD, so you are not going to get a 2 dollar subscription out of that. And getting people to keep the same SIM card and top up is hard enough, repeat monthly billing for an OTT video service was going to be even more of a challenge.But for sure OTT video consumption on devices is the future and is growing rapidly, it’s just that it turns out that the opportunity isn’t so much the Pan Asian SVOD service… at the moment, but that the Ad-funded Video service is under-represented… and it’s not even necessarily VOD either.

Linear channels is still a great format and on the rise. Research from Digital TV Europe even claims that Asia Pacific will overtake North America as the leading region for advertising-supported video-on-demand (AVOD) content by 2021.

While we’ve all been busy trying to work out who in Asia might be able to repeat the success that Netflix has enjoyed in western markets, we should have perhaps been looking at who might be able to repeat that success that Youtube is actually having in Asia.

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