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Southeast Asia’s OTT craze
By Lim Sung-jin Manager, Partnership Strategy Team, SK Broadband

You would be hard-pressed to find a region of the world that reflects the global spike in media consumption better than ASEAN, where consumption of over-the-top (OTT) services has grown especially noticeably: as of December 2021, the household penetration rate of paid OTT subscribers was on par with that of traditional paid media services, such as IPTV, cable, and satellite broadcasts.

The competing OTT services in ASEAN countries can be grouped into three categories. The first are national services, or those that were launched by domestic media or telecommunications corporations in hopes of synergy-fueled profit. The second category are OTT services that target ASEAN as a region, as in the case of the Hong Kong-based Viu, Malaysia-based Iflix, as well as iQYI and WeTV, which are technically Chinese but offer functions for a broader Asian audience. Services in this category offer free, ad-supported services as well as “freemium” business models, which charge a relatively modest monthly fee (USD 3-5) for those who do not wish to view advertisements. The third category are global OTT services such as Netflix, which are increasingly entering the Southeast Asian market due to their recognition of its high business potential.

Netflix was soon followed by the release of Amazone Prime Video, HBO GO, and Disney+ Hotstar. While all of these service providers offer a truly vast range of content, as well as original content that is not offered by other providers, Southeast Asian consumers are hesitant about subscribing to them because they demand fees that are double those of their competition. In 2019, Netflix released a mobile- only plan (USD 5), through which it quickly amassed subscribers. Disney+ Hotstar, which was launched in 2020, is expanding its Indonesia-centric consumer base through a competitive monthly fee of about USD 3.

According to global technology research company Omdia, Southeast Asia’s OTT service market is expected to grow annually by at least 20% until 2025. A pillar of the OTT craze in this part of the world is Hallyu content, or Korean Wave content: Viu has already gained a loyal following through Hallyu-specialized services, while Netflix reaped success in the ASEAN market through Korean-made content. For the time being, service providers are expected to redouble their efforts to secure Hallyu content based on its popularity in almost all ASEAN countries.