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Chinese Streaming Platforms Taking Over Southeast Asian Markets

Southeast Asia offers great opportunities for media companies to capitalize, given its dominant population and market’s untapped characteristic. Covid-19 has sped up digitalisation in the market and demand for online video consumption has spiked, which in turn is driving demand for more higher-quality online video services. Up until 2020, Netflix, Viu and iflix are leading the market, however presumably it will change in 2021 once Disney+ expands to more countries in Southeast Asia and Baidu’s streaming service iQiyi video acquires more quality shows.

(Photo Source: Omdia)

The Southeast Asian streaming industry has seen considerable changes during these two years as Chinese streamers have been taking over a large part of viewers and investing in local content significantly. In June, Tencent acquired the Malaysian service iflix with a chance to obtain its significant local content library. Dataxis reported that iflix has been struggling to generate revenue. As of 2020, iflix is operating in 13 countries across Asia. Both Baidu and Tencent have been eyeing on Southeast Asia markets and Tencent will take over by merging the iflix brand and its own service WeTV into one platform.

(Photo Source: Online streaming paid subscription in Southeast Asia in 2019, Dataxis)

One point worth noting is that Southeast Asia are clearly demonstrating a viewers’ preference for AVOD platforms. “Customers are very price-sensitive in these markets, and if content is deemed too expensive, or ads deemed too frequent or long, then they will find alternatives, either legal or pirated,” says Malcolm Rogers, senior analyst with Global Data, a media, telecom and technology consultancy. Therefore, Chinese OTT might be the only potential players who can afford to keep the AVOD model while still investing sufficient money into new production.

On the other hand, Viu, a leading pan-regional OTT video service backed by Hong Kong’s PCCW telecoms, has secured over 40 million monthly active users, now second to Netflix in Southeast Asia. Against the entry of Chinese Streaming Platforms, the company doubled down on creating original content. With the partnership of AIS PLAY, the largest telecom provider in Thailand, they produced two new Viu Original series “Voice in the Rain” and “My Bubble Tea” in a row this year.

(Photo Source: Original Show “My Bubble Tea”, Viu)

“Originals are among the most popular content on the platform, with more than 40% of users watching productions created for Viu. Our original productions include Asian adaptations of international formats such as “Pretty Little Liars” and “The Bridge” said CEO Janice Lee from Multi-territory Asian streaming service VIu.

Following Hooq’s exit, Tencent’s acquisition of iflix this year, and the entry of Disney+ the OTT landscape is set to heighten competition in the region in 2021. Being backed by Tencent and Baidu, both WeTV and iQiyi will have a competitive advantage in terms of both content budget and technology. Viu is going to face increased pressure however it still has leverage to secure local market share since its well-recognised brand with ample localised content.