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Netflix flip out? Premium video streaming will continue to grow in Asia despite churn & piracy

By Shaun Lim

When you conjure up an image of an eager consumer binge-watching content on a tablet or smart TV, the first word that is likely to come to mind is: Netflix.

For so long synonymous with the concept of video streaming, Netflix ushered in an era of viewing that has given viewers the power to choose when, where, and from what device they want to consume their content from.

However, is the unthinkable happening?

Earlier this year, Netflix announced that it had lost 200,000 subscribers since the beginning of 2022, its largest subscriber drop-off for a decade. 

Could this be attributed to the increased competition from the likes of Amazon Prime Video, HBO Max and particularly, Disney+, or is Netflix’s “decline” symptomatic of an over saturated market that is likely to continue seeing consumer churn?

Disabusing this suggestion quickly was Louis Boswell, CEO of the Asia Video Industry Association (AVIA), who suggested that it is premature to write off Netflix, especially in Asia. Speaking with APB+, Boswell explained, “The bigger question is: Are streaming services going to grow in Asia and is Netflix going to be a part of that growth?

“To both those questions, I feel very confident in saying, yes.”

The statistics would appear to back Boswell up. According to new analysis published by Media Partners Asia (MPA), South-East Asia added 2.8 million net new subscription video-on-demand (SVOD) customers in the first quarter of 2022 to reach an aggregate customer base of 39.5 million subscribers.

Netflix incidentally, continues to lead premium video consumption share in South-East Asia, according to MPA.

And where Asia is concerned, the battle for eyeballs is arguably more intense than any other region in the world. Besides the aforementioned SVOD behemoths hailing from the US, other brands such as Viu, iflix, and HOOQ, to name but a few, continue to offer localised content that appeals to viewers in the region.

This is before taking into consideration short-form content available on platforms such as YouTube and TikTok. The latter’s continued growth, in particular, continues to stagger industry watchers, having reached 217.7 million users in South-East Asia alone.

While acknowledging the overwhelming number of content options for viewers today, Boswell was quick to highlight that this has been the case for a number of years.

He highlighted, “15 years ago, pay-TV was offering you more channels than you could possibly watch. What has changed is the rise of social media and user-generated content options.

“And there are only 24 hours in a day — and so if people are spending more time on social media, that eats into other activities.  But I feel it eats more into sleep and working hours, for example, than premium streaming consumption.

“With TV and streaming, premium video consumption in aggregate has seen huge growth and yes, maybe to some extent there is a content ‘arms race’; but again, this has always been so.

“Having content people are clamouring to watch was, is and will remain the surest recipe for success.”

Content piracy still a concern in Asia

In Asia, there is also another content arms race to contend with, albeit one of a more sinister nature. 

According to a 2022 survey commissioned by AVIA’s Coalition Against Piracy (CAP), 61% of consumers in countries such as Vietnam, Malaysia, and the Philippines have accessed streaming piracy websites or torrent sites.

Lamenting that content piracy is still “very prevalent” in Asia, Boswell said, “There are no simple solutions and fighting piracy remains a long game. At the moment, social media and messaging apps seem to be at the heart of content theft and are consuming much of our time in the fight against piracy in the region.

“It is critical that the industry sticks together to support anti-piracy efforts and we continue to discuss the issue with regulators and educate them on the problems and associated risks.”

It’s what you watch, not how you watch

As Boswell earlier attested to, providing content that viewers want remains the key to success. In South-East Asia, for example, sports has been one of the main reasons for the longevity of pay-TV, as English Premier League fans in particular, sign up for content bundles to watch their favourite football teams in action.

That was, until the likes of Amazon Prime Video decided to enter the fray and offer selected matches of the English Premier League on their video streaming platform. 

Not to be outdone, Singapore telco and pay-TV operator StarHub, in announcing its acquisition of broadcast rights of the English Premier League for the next six years, decided to offer subscribers access to all 380 matches for the 2022/2023 season on Premier +, a new offering on its StarHub TV+ over-the-top (OTT) service – at a fraction of the price subscribers had been used to paying for bundled pay-TV packages.

For Boswell however, it does not make a difference to consumers whether sports content is presented on a linear channel or a non-linear streaming service. “I don’t see anything changing other than the technology used for the delivery of the video signals, and those are invisible to the consumer,” he suggested.

“In the past, competition for premium sports was amongst linear channels. Now streaming services can and do compete for that content as well.

“For the consumer it just adds more convenience and accessibility because the barrier to entry for streaming is lower than it was in the past for pay-TV.”

As streaming services continue to grow, he also expects more sports content to be available on these platforms, bearing in mind the difference in cost between delivering linear and streaming content. Technology will also continue to play a role, whether on the viewing experience or how it is delivered, although it is ultimately the content that will make the difference, Boswell maintained.

“We are an industry that invests huge money to create content that people would not otherwise get and with which they form deep relationships. The experience is then monetised through consumers paying for it, or advertisers paying for it. Even with all the changing technologies, the fundamentals will remain the same,” he concluded.

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