Will the Traditional Market Reinvent itself in order to Compete with OTT?
Over-the-top (OTT) has become a buzzword in the media landscape today. From video streaming to video-on-demand platforms, the segment has grown to an industry in a short span of time.
In one of the biggest markets, Asia, the business of OTT picked up at a slow pace initially with the presence of geographically focused players such as Hooq, Spuul, BoxTv, etc. But today the region is host to a number of streaming services, including various local players such as Hong Kong-based Viu, Korea-based Pooq, Beijing-based iQiyi, and Malaysia-based iflix.
The major reasons of the OTT business growth include the increasing penetration of smartphones, with digital viewership beating the TV viewership.
“The future of TV is OTT,” states Ben Morrell, general manager, Asia at Brightcove. In a blog post, Morrell adds, “Fundamentally, it will be defined by what the viewer wants, exerting a strong influence on how media companies package, deliver and monetize their content.”
“For consumers, the switch between TV and mobile devices is relatively straightforward,” he adds. “The implication for service providers is, however, much greater.”
A January study by Statistica reveals that the percentage of internet users who watched online video content on any device has increased by double over the past one year in Asian countries, including South Korea (95.9 per cent), China (89.6 per cent), India (84.1 per cent) and Japan (73.6 per cent). Small wonder then, online video consumption is one of the most popular internet activities worldwide.
As much as the entry of OTT platforms has disrupted the traditional entertainment market, the competition within the industry has also scaled new heights with TV channels expanding into OTT. Not only Asia, but matured markets like the US is expected to witness a substantial change in market after the launch of Disney’s OTT platform Disney+, which would compete with the likes of Netflix and Amazon Prime.
In a game-changing move earlier this year, HOOQ, a highly sophisticated Netflix-like, multi-country OTT streaming service backed by Sony Pictures Television, Warner Media, and SingTel continued their aggressive moves in Asia by launching 50 free channels in Indonesia. HBO GO Asia expanded its footprint with a launch in Indonesia, adding to its portfolio of OTT services in Singapore, the Philippines, and Hong Kong.
The OTT industry, currently appealing to the modern digital consumer, is now set for global domination, according to an April report by Digital TV Research. One of the biggest growth drivers of OTT has been the Asia’s telecom landscape. Seeing the growing demand in the OTT market, some of the telcos have started OTT service themselves. With high adoption rates of fixed broadband, mobile broadband and pay-TV, the market is growing its penetration with as high as 80 per cent in the Asia Pacific region.
In Asia, Netflix and iQiyi are two promising service providers who have been pushing traditional pay-TV operators out of the top five rankings the region, says report.
Other than that, two Asia-Pacific countries, Japan and Australia currently have 16.5 per cent and 21.7 per cent, share of the world’s OTT revenue, respectively. With around 1.8 billion unique subscribers and 3.8 billion connections, the Asia Pacific region promises a steep growth for the next five years.
Researchers have estimated the OTT services market in Asia Pacific to experience a quick upsurge by the end of next year. It is expected that APAC OTT video revenue will be worth $24 billion by 2021. In terms of growth, APAC is projected to add 600 million new subscribers, and 1.6 billion new smartphone connections by 2020.
The report adds China alone will have 139 million subscription video on demand (SVoD) subscribers, accounting for 59 per cent of the region’s total, thus contributing half of the revenues for the 22 OTT countries, by 2022. China and Japan together will account for 66 per cent of the region’s total revenue. By 2021, Indian video on demand (VoD) subscribers will reach 14.6 million, and will be followed by Indonesia at 9.96 million and Japan at 8.1 million.
OTT Beating TV
The craze of OTT has scaled to a height that now the streaming video-on-demand services have beaten TV in customer satisfaction when it comes to pay for content, says a Germany-based data research firm Statista, in its Digital Economy Outlook.
The willingness to pay for content is highest in China, Brazil and India (52 per cent), with Germany and UK lagging behind, the findings showed. The VOD category of OTT in the APAC region is so competitive that even the smaller players are witnessing a sharp increase in revenue. Some of the prominent players in the APAC region include Netflix, Youku Tudou, iQiyi, Viu, Tencent Video, LeTV, Hooq, Amazon Prime Video, iFlix, YuppTV, Hotstar, NexGTV, Spuul, Eros Now, BoxTV, Catchplay, Hulu, dTV, Pooq, Tving, Watcha Play, and Wattpad.
While talking about why Asia is a growing market for OTT, Wattpad’s founder and CEO Allen Lau says, “We’ve been making investments, hiring new people, and creating new partnerships in India, Indonesia, the Philippines, and Korea, as these are all important countries for our business.” Recently, Wattpad expanded in Asia through a partnership with Times Bridge.
The storytelling platforms works through its large community of writers, readers and partners, who strategically position its content in the global entertainment industry. “People consume media in many different ways. But the one connecting feature of all new forms of media is the story, which is the atomic unit of everything people consume across all platforms,” he says.
Future of TV
While the traditional players are marking their entry into the OTT market, the general consensus among experts about the market is that cable TV and OTT will grow together as the market is huge and there are different segments to cater to.But how will it happen? Will the traditional market reinvent itself in order to compete with OTT? An interesting fight and disruption is yet to be seen in the newly created industry of OTT market.