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Western streaming platforms looking at Asia face stiff competition from local companies. Netflix released its first Indian drama series Sacred Games in 2018. Photo: courtesy of Netflix

In Asia, Amazon and Netflix vie with home-grown video streaming platforms for customers – and it’s viewers who are the winners

  • Tencent Video, Baidu’s iQiyi, HOOQ and Hotstar offer competition for Western streaming platforms looking to break into Asia
  • The intense competition between the streaming services is benefiting customers, who enjoy free streaming and locally made original content

From Chinese behemoths backed by the likes of Baidu, to Southeast Asian upstarts offering free content, Asian video streaming services are challenging Western giants seeking to expand in the region.

As more consumers in Asia get reliable internet access on smartphones and tablets, multiple platforms – including United States-based outfits such as Netflix and Amazon – are vying to sign them up. To appeal to audiences across the vast and diverse continent, services are racing to buy local content and produce their own offerings, and are taking new approaches such as free-to-view services with ads.

“The whole landscape is changing,” says James Bridges, chief executive and co-founder of documentary streaming service iwonder, which operates in Australia, New Zealand and Southeast Asia. Not only does the content range widely, but also the business models – from ad-supported to subscription. The variety means there is a lot of room for people to try different things.”

Audiences benefit from the intense competition, with a flood of original content being made to cater to local markets.

James Bridges, chief executive and co-founder of documentary streaming service iwonder.

These include Netflix’s critically acclaimed Indian-made thriller series Sacred Games and KL Gangster: Underworld, a collaboration between Malaysia’s iflix and Skop Productions. Some services such as iflix and Hong Kong-based Viu are giving away content for free and making money from ads, while also offering a subscription premium service.

India’s home-grown (Disney-owned) outfit Hotstar has established its dominance by luring viewers through cricket match broadcasts.

Hong Kong-based ViuTV is giving away free content, and making its money from advertising. Photo: K.Y. Cheng
Other services are seeking to appeal to niche audiences; iwonder offers documentaries and current affairs programmes, sometimes paired with news articles about the same topic. The landscape is set become even more competitive with Disney and Apple launching streaming platforms along the same subscription model as Netflix. While the risks of entering the fast-evolving scene are huge, the rewards have equal potential.

The Asia-Pacific online video industry will generate US$27 billion in advertising and subscription revenue this year, up 24 per cent year-on-year from 2018, according to a report from consultancy Media Partners Asia (MPA). The region’s biggest home-grown platforms are in China, where outside players are largely locked out.

The major ones are iQiyi – controlled by search giant Baidu – followed by Tencent Video and Alibaba’s Youku Tudou. (Alibaba is the owner of the South China Morning Post.)

In a potential threat to the growth plans of Western platforms, they have started moving beyond the China market, with iQiyi and Tencent expanding into Southeast Asia.

MPA executive director Vivek Couto.

Key for the future of streaming in Asia is “what happens to the larger scale players”, says MPA executive director Vivek Couto. “How do the Chinese platforms develop and operate?”

Meanwhile India, which does not restrict outside players to the same degree as China, has become a key battleground for streaming services. Amazon Prime Video has made strong inroads, while expansion in India is a priority for Netflix, which last year announced nine new Indian original productions.

It also introduced a cheaper, mobile-only subscription in India in the hope of winning more customers in a highly price- sensitive market.

Price is a key challenge for foreign players right across a region where piracy is rampant and people are less willing to pay for content than in more developed markets.

Netflix has taken other steps in Asia, including making its service available in more local languages and partnering with major telecom companies and internet service providers, but recognises there is a long road ahead. “The industry is still just getting started in Asia … we have a lot more to learn,” a company spokesman says.

In such a crowded market, industry insiders believe only companies with deep enough pockets to sustain losses for years, and those offering really innovative products, will survive.

Peter Bithos, chief executive of HOOQ.

“As competition heats up, there’s no doubt we’ll start seeing more M&A (merger and acquisition) talks and partnerships in Asia,” says Peter Bithos, chief executive of HOOQ, a streaming platform operating in Southeast Asia and India.

Netflix and Amazon are, however, unlikely to snap up local streaming platforms unless they have a decent amount of local content in a big market, says Couto.

On the other hand, Chinese players and Hotstar may look at buying other services “at the right price, and the right time and with the right access to content”, he adds.

This article appeared in the South China Morning Post print edition as: Asian video streamers battle Western giants