“The potential of this area is of strategic importance for these players as we have observed a global slowdown in growth of paying services’ subscriptions in the past few years.”

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A joint report by Google, Singapore’s Temasek, and Bain & Co. estimated the region’s online media consumption, which includes advertising, gaming, video and music on-demand, would grow to US$35 billion by 2025, up from US$17 billion last year, partly due to a 38 per cent surge in subscriptions video-on-demand (SVOD) platforms during lockdown.

The Media Partners Asia consultancy (MPA) estimated that 6.5 per cent of households in Southeast Asia would have subscribed to video streaming services by the end of this year. MPA also estimated that Southeast Asia had contributed 10 per cent of the US$6.8 billion revenue in the SVOD sector in Asia Pacific, excluding China, last year. That leaves plenty of room for growth for streaming players in the next few years.

Boucaud attributed the growth in Southeast Asia to a “strong proportion of young audiences driving a very dynamic digital industry”.

Boucaud said it was difficult to predict who the winner of this battle would be, but home-grown platforms might be at a disadvantage to their regional and global counterparts.

“Local platforms are going to face increasing competition from regional and global services which have the resources to invest massively in original productions and local content aggregation. This will probably force active services towards consolidation,” Boucaud said.

THE FIGHT FOR EYEBALLS

Despite launching years after Netflix, which has been available in the region since 2016, Disney has quickly caught up in terms of number of subscribers, though its revenues continue to lag those of its competitor, according to MPA. Disney, which recently announced it had 100 million paying subscribers worldwide, was expected to reach 66 million paying subscribers in Asia by the end of this year, more than Netflix’s 33.3 million, MPA said.

In Asia, Netflix was projected to generate US$3.3 billion in revenue this year, compared to Disney’s US$1.2 billion, MPA said.

In Indonesia, Southeast Asia’s biggest market, Disney+ Hotstar leads the competition with an estimated 2.5 million customers, followed by Hong Kong-based streaming platform Viu’s 1.5 million users, home-grown platform Vidio’s 1.1 million, and Netflix’s 850,000 subs, according to MPA data as of mid-January.

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Disney’s dominance is attributed to its strong brand, ubiquitous marketing and aggressive mobile pricing plan, a result of its partnership with leading telecoms provider Telkomsel. Disney’s subscription plan starts at 39,000 rupiah (US$2.70) per month, compared to Netflix’s 54,000 rupiah (US$3.75) per month, after value-added taxes. It also boasts a vast array of collections, from Disney classics and Pixar animations, to Marvel superhero titles and local films.

Among the new subscribers to Disney’s streaming service is Nayla Sabita Kanaya, 15. The student in Tangerang, on the outskirts of Jakarta, has been rewatching animated classics such as Beauty and the Beast and Aladdin since her mother subscribed this month.

“My mum and I have really liked Disney’s princess movies since I was a little girl, so we have been rewatching those and Pixar movies such as Cars and Brave,” Nayla said.

Raya and the Last Dragon, Disney’s latest animation, is centred around Southeast Asian characters and culture. It has been available on Disney+, the company’s streaming service for the Western, Latin American, and Japanese markets, for a one-time access fee of US$30, since March 5. It has also been shown on cinema screens in Hong Kong, but will not be available to Disney+ Hotstar users until June.

One area where Chinese and regional streaming platforms have an advantage over Disney is in screening Asian dramas.

Feby Valentiya, a self-described Chinese television series addict in the Indonesian city of Bogor, recently upgraded her WeTV and iQIYI monthly subscriptions to annual ones. She favours the platforms for their collections of Asian shows, particularly dramas from mainland China. Feby, who subscribes to six platforms, plans to end her Disney+ subscription, which she got for free from her internet provider, Telkomsel.

“I like WeTV because I love Chinese dramas, and apparently WeTV has a good collection of dramas from mainland China. Lately it also has offered some Indonesian movies,” said Feby, who spends 300 gigabytes of her internet quota consuming Asian dramas each month.

Disney+ Hotstar on the other hand, had only “Disney movies and not many Asian TV shows”, she said.

Aside from Chinese dramas, Korean and local dramas have also helped the services gain traction among Indonesians, something that Disney’s rivals, Vidio and Viu, have capitalised on.

PRICE CONSCIOUS

While Feby is willing to spend 300,000 rupiah (US$20.80) per month for her video streaming subscriptions, she has set a price ceiling of 50,000 rupiah (US$3.50) for a single subscription fee.

Analysts say customers like Feby show just how important pricing strategy is.

“It will be a competitive advantage for platforms offering lower prices like iQIYI and WeTV.

Focusing on mobile plans seems to be a strategy that pays off as it enables players to push lower quality content, subscription plans are generally cheaper and it facilitates payments in countries where credit cards sometimes have a very low penetration,” Boucaud of Dataxis said.

In Indonesia, iQIYI’s monthly subscription starts at 30,000 rupiah (US$2.08) per month, while WeTV starts at 15,000 rupiah (US$1.04) per month.

However, low average revenues per user will constrain the expansion of services like Netflix and HBO Go. Like Disney, HBO also offered bundles with local internet providers and pay TV operators, which enabled them to “address a much larger subscriber base at launch but also limited its income as the average revenue per user of such subscriptions are shared with partnering operators”, Boucaud said.

Low advertising revenues in the region can also affect the business model of advertising video-on-demand services such as Viu, which now offers a premium service where customers can watch shows without ads for US$2.07 per month.

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Piracy is a lingering problem for video streaming operators, despite efforts by authorities and telco providers to shut down pirated content websites. Like a game of whack-a-mole, the sites continue to pop up, offering recent shows and movies, including Raya and the Last Dragon.

Nayla, the 15-year-old, is far from alone in her disappointment over the late roll-out of Raya. Internet users across the region have been downloading and watching pirated copies.

“Currently watching Raya and the Last Dragon with my sister, illegally because you know Southeast Asia doesn’t even have access to Disney+,” wrote a Twitter user named Kat.

“Maybe if the movie were actually accessible in Southeast Asia, which is where ‘Raya’ is based, then more of us here would be able to support it,” tweeted another user, @nonadraws from the Philippines.

“We still don’t have Disney+ and most theatres are closed. What other option do we have?”