TELEVISION

Netflix to launch in Hong Kong, Singapore in 2016 as US streaming service eyes global markets

PUBLISHED : Wednesday, 09 September, 2015, 12:06pm
UPDATED : Thursday, 10 September, 2015, 3:03pm

US streaming service Netflix said on Wednesday it will launch in Hong Kong in early 2016 as part of a larger global expansion.

Netflix, which recently launched in Japan, will also roll out coverage to South Korea, Singapore and Taiwan.

"The combination of increasing internet speeds and ubiquity of connected devices provides consumers with the anytime, anywhere ability to enjoy their favourite TV shows and movies on the Netflix service," said chief executive officer Reed Hastings.

"These four markets well represent those trends."

The service will be available at launch on smart TVs, tablets and smartphones, computers and a range of game consoles and set-top boxes.

The company did not reveal pricing or programming information for the new markets. In Japan, the service costs 950 yen (HK$61) per month, while in the US subscribers pay around US$8 per month (HK$62).

Netflix has more than 65 million subscribers worldwide, with the bulk of those in the US. However, the cost of licensing third-party content outstrips is more than four times its current net revenue, at US$7.7 billion.

Revenue in 2014 was around US$5.5 billion, according to the most recent company figures.

The California-based company has said it plans to be in 200 markets within the next two years, up from 50 at present.

In Japan, the service has focused on a mix of popular domestic television shows along with original content such as Marco Polo, Marvel's Daredevil and House of Cards.

In Hong Kong, Netflix faces stiff competition from local players such as Cable TV and Now TV – both of which offer limited content online – and free-to-air broadcaster TVB, which provides the majority of its content for online viewing. Online-only HKTV offers video-on-demand services through its website and apps.

“Hong Kong people are willing to pay for good programming,” said Grace Leung Lai-kuen, a lecturer at Chinese University’s school of journalism and communication.

She said Netflix’s move demonstrated the potential for the city’s pay-television market.

The US firm is not the only company to see this. Two mainland streaming services, LeTV and iQiyi, have both expanded into the city in recent months.

Baidu-backed iQiyi has attracted more than 5 million paid subscribers in its home market, and has made Hong Kong a key expansion target.

iQiyi was among 10 Chinese companies named "global growth leaders" by the World Economic Forum ahead of a summit in Dalian, China this week.

LeTV has also targeted Hong Kong, spending upwards of HK$1 million per episode on a locally produced television show aimed at subscribers in the city.

This week, LeTV also snatched the rights to broadcast English Premier League football matches in Hong Kong from local firm PCCW. The Chinese company will reportedly shell out US$400 million for the games.

“Both Cable TV and Now TV are not in the best shape to compete” with experienced and wealthy outside players, Leung said, adding the local firms would need to reposition themselves and produce better programming if they hoped to compete.

Ultimately it all comes down to content, said Peter Lam Yuk-wah, vice-president of the Hong Kong Televisioners Association.

“If [local broadcasters] are just putting out average productions, audiences won’t be willing to pay for it,” he said.

Netflix’s arrival was “definitely a positive”, said lawmaker Charles Mok, who represents the IT sector. However, he expressed concern increased competition could “lead to a decline” in local Cantonese programming.

Leung said local broadcasters may push the government to liberalise regulations. “It’s a bit unfair to those that pay the licence fee and have to follow guidelines,” she said.

“There needs to be a more level playing field.”

“Increasingly, companies are doing [online streaming] without going through the almost impossible task of getting a broadcast licence,” Mok said.

 


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