Revenues from the over-the-top (OTT) video market in the Asia Pacific region are expected to grow rapidly between now and 2019, according to research consultancy MTM.
Focusing on the key markets of Australia, Indonesia and Thailand, the study – commissioned by technology companies Vindicia and Ooyala – found that OTT services would flourish, in spite of challenging broadband infrastructure and need for greater content localisation.
MTM forecasts that Australia’s premium OTT market will grow from around US$85 million in 2015 to $230 million in 2019; Indonesia’s from $7 million to $40 million; and Thailand’s from $8 million to $45 million. Local service providers will own a significant portion of the market and will dominate in Indonesia and Thailand, while Netflix will be the dominant player in Australia, researchers predict.
Broadband infrastructure challenges and limited access to affordable fixed-line services are, say the industry executives canvassed, “significant barriers to growth” for OTT services in the mobile first Asia Pacific market. In Australia, the average connection speed is 8.2Mbs, about half that of the UK and US. Thailand has a similar average of 9.2Mbs, but only 9% of consumers subscribe. In Indonesia, there is only 1% broadband penetration with an average speed of 3.9Mbs, says MTM.
In addition to international content, the 80 respondents felt local language programming is essential to the proliferation of premium OTT services in Indonesia and Thailand, with intense competition among local pay-TV providers over licensing of local content.
“There’s no doubt that Asia Pacific is a hotbed of premium OTT service expansion that will evolve based on regional nuances, tastes and economics,” said Bryta Schulz, senior vice president of marketing, Vindicia.
The regional presence of Netflix will, in general, drive OTT market expansion, however “consumers will struggle with the US streaming giant’s one-size-fits-all offering,” said researchers.
Vindicia’s Schulz added: “The next 12 to 24 months will function less as a test of whether or not premium OTT will take off, but more as a measure of how it will penetrate popular appetites. Among the creative and flexible approaches to generating reliable revenue, service providers will need platforms that can accommodate a range of content delivery and payment preferences”.