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Mar, 2021     

Media: OTT Takes Centre Stage in SEA

Regional players are giving a tough fight to global players like Netflix, curated localized content could prove key differentiator


1. On the existing base of increased penetration of high speed internet and smart devices…

Southeast Asia enjoys a high level of internet penetration in comparison to other emerging markets. COVID further accelerated this adoption in the region. The need to connect with your loved ones during the pandemic also led to increased adoption of smart devices in these countries which in turn helped OTT platforms to reach millions of households in ASEAN.

Interestingly among all the content, sports streaming led in OTT video consumption in September and October through the streaming of IPL and other cricket and football leagues. Overall, there has been a total growth of 13% from January 2020 to January 2021.

2 .…COVID Induced lockdowns helped spike up the traffic on OTT platforms

During lockdowns, over 40% new users joined OTT Platforms in SEA. We observed that the increase in video subscriptions was higher than that of music subscriptions which grew at a relatively slower pace. While most of these new users are of the view that their spending is likely to increase/stay at the same level after the pandemic, some are likely to unsubscribe after the free trial is over.

New users on boarded due to COVID

Out of the respondents who said their spend on OTT had increased during the initial lockdowns, ~60% say that it increased further post the initial lockdown phase

3. Regional players are giving a tough fight to global players like Netflix, curated localized content could prove key differentiator

The southeast Asian market has a strong presence of regional players who offer localized content & free/affordable services to their users. These players have also been around for a few years now. International players have been trying to aggressively expand into new markets and it will be interesting to witness how this exciting battle unfolds.

Consumption by geographical origin

Regional Players

Recent developments among global OTT players in the region

4. The segment has the potential to disrupt traditional prime time TV…

Players like Netflix and Prime have changed the landscape of the TV and Video Industry. This has definitely made the Traditional TV operators sit-up and take notice.

Looking at user preferences, better quality content is more important than watching it at the preferred time which highlights the need for curated content creation in the coming years. The majority of the viewers are active on OTT platforms during prime-time TV hours i.e. 8 p.m. – 12 a.m.

5. …and there is significant upside to tap into from a monetization standpoint with different strategies at play depending on type of target segment

While the OTT Platforms have captured the SEA market, there is massive scope for these platforms to monetize from the existing and new user base. This could be by means of flexible and affordable subscription plans or freemium models. The monetization strategy is dependent on the target segment profile – Global players who are targetting tier 1 high-income consumers are more focussed on paid subscription models while the regional players who are looking to capture the tier 2+ consumer base as well are more dependent on Ad based revenue. Going forward we expect more customizable packages, pay as you go schemes to be introduced to aid user onboarding and retention as the platforms try to curate not just content but also pricing schemes to suit the ever-expanding customer base that they are catering to.

Comparison of regional and Global OTT players on target segment, monetization