With the kick off of 2018, it’s a good time to pause and evaluate the OTT market and what we think will win in the space. The market numbers are exciting to see, but just as with any compelling drama series you might watch, I think we are in for some twists and turns throughout this year as the competitive plot unfolds. Spoiler alert: We think our innovative freemium business model is one of the key attributes of Viu that sets us ahead of the pack.
VOD and Mobile by the Numbers
With Malaysia boasting 43 million mobile subscriptions, the popularity of VOD has never been higher, riding on the access to anywhere anytime video content. Industry predictions highlight the promise of OTT and VOD, with a surge in consumption and revenue anticipated in the next few years. By 2021, the Asia Pacific region will have added 107 million new SVOD subscribers compared to 2015, with a 220% surge in revenue through SVOD expected – from USD5.74 billion to USD18.4 billion.
The role of mobile internet usage in the region is also key, as Southeast Asians spend an average of 3.6 hours on mobile internet every day, up to several times more than the United States (2 hours), the United Kingdom (1.8 hours) and Japan (1 hour). The bulk of mobile data traffic will consist of video content, with 78% of the world’s mobile data traffic projected to comprise video by 2021 – a 9-fold increase between 2016 and 2021. Consumer VOD traffic is predicted to nearly double in that time; VOD traffic in 2021 is expected to equal 7.2 billion DVDs per month.
All of this has been exciting for us – our monthly active users for our premium video-on-demand service Viu nearly tripled in six months in 2017. We’re optimistic for the future, but know that we must keep a strong focus on how we differentiate from others – whether it’s our approach to content, our long-standing freemium business model that we’ve perfected over time, local partnerships and pricing, deep technology and consumer insights or our sustained long-term investment and commitment to building the market.Freemium Business Model
A major part of why we have such high consumption on Viu is that we operate on a freemium model that allows us to offer some content for free to attract casual viewers to the platform while offering premium content, such as the latest shows, at an affordable price point (10RM per month).
This model helps us acquire users, it offers our telco partners high data consumption, and it provides our brands with a wealth of opportunities to deliver contextual adds and offers consumers a legitimate source of videos outside of piracy.
Naturally this model is fueled partially because of Viu’s ability to offer a telco-billing based subscription approach, amongst other billing options and partially because Viu is a preferred partner for video advertising. We have achieved this as a result of high engagement, quality of content and our audience profile. Big brands such as Apple, McDonalds and LVMH to name a few, have advertised with us, and programmatically we have also partnered with the likes of Facebook, InMobi and others. Our advertiser appreciate the following about Viu:
- Brand-safe content
- One-stop-shop for branded content, from ideation to production
- Original, localized content for the local consumers’ consumption
- Technology-driven approach to ensuring a superior viewing experience
Regional and Original Content
Malaysian viewers love fresh, high quality Asian content and our consumer insights remain a pivotal part of our strategy to offer really good Asian shows that Malaysians want. Not only do we want to inspire viewers with our content strategy, on the creative side, we seek up-and-comers in Southeast Asia. We want to support rising local talent by providing them with a format that optimizes for their creativity and reaching millennials with content that they love. All in a digital format native to them.
Additionally, we bring top Best of Asian, quality content to Malaysia from other countries, such as Japan’s Princess Jellyfish, Korea’s The Sheriff in Town, and India’s Spotlight 2. Viu subscribers can access nearly 10,000 hours of content, including Viu Originals.
Piracy continues to be rampant in our market. The solution is to beat pirates at their own game, ensuring that popular TV shows are available for viewing on our service first, with quality subtitles. People will pay for fresh, current, quality content. Consumers who want the best of different content may even subscribe to multiple services. The fact that the subscription cost of the average OTT platform in Malaysia is the same cost as a pirated DVD is not a coincidence.
Content is available with English subtitles on Viu in as little as eight hours after its native telecast, and with Simplified Chinese and Bahasa Malaysia subtitles added within 24 hours. We offer the fastest localisation in Southeast Asia – with up to 70 hours of fresh regional content per week.
Local Partnerships and Advertising Deals
Throughout all of the 15 markets where Viu is available — Hong Kong, Singapore, Malaysia, India, Indonesia, the Philippines, Thailand and the Middle East countries of Bahrain, Egypt, Jordan, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – local partnerships are key to our success. That’s why we have partnered with every telco in Malaysia. It’s why we have advertising deals with top brands in Malaysia, such as Apple, Dior and Chanel. And it’s notable that it’s not just ad serving to us, it’s about audience creation and engagement across.
For example, we recently worked with Prudential Assurance Malaysia Berhad on a creative content deal. I AM WOMAN is an advertising funded production, a Malaysian production by and for OTT video service Viu. I AM WOMAN is a series celebrating extraordinary modern-day heroines, sharing the life stories of women who have found their strength in male-dominated fields.
Everything about what we do is local. Local partnerships, local operations, local pricing. We believe it’s this sustained long term investment and commitment to developing a market that will allow us to come out ahead.
In summary, we believe that in 2018, there will continue to be multiple players in the market, but the winners will be those who understand the following fundamentals:
- Seamless onboarding of consumers to experience and enjoy the service, including a freemium model
- A compelling content strategy including Best of Asian that is aimed at local markets and drives viewership over the long-term and retains customers
- Long-term investment in content, technology and marketing based on deep consumer insights
- Real technology expertise rooted in delivering a superior consumer experience
- An entrepreneurial culture that emphasizes entertaining consumers and not company valuations
Our viewers can catch the latest and most popular Asian shows and more on Viu, accessible on mobile phones and tablets, as well as desktops. Download the Viu app on the Apple App Store or Google Play Store, or visit Viu’s website at www.viu.com.
Viu is a leading OTT Video service by PCCW and Vuclip available in 15 markets including Hong Kong, Singapore, Malaysia, India, Indonesia, the Philippines, Thailand and Middle East countries of Bahrain, Egypt, Jordan, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Viu’s unique value proposition of fresh and localized regional and local premium TV shows, movies and originals entertains millions of consumers every day. The service can be accessed via the Viu app available for free on the App Store and Google Play, on connected devices such as smartphones and tablets, as well as on the web at www.viu.com.
Vuclip is a leading global technology-driven media company delivering on demand entertainment to emerging markets including India, Southeast Asia, Africa and the Middle East. As a PCCW Media Company, Vuclip properties include Viu, Vuclip Videos, Viu Life and Vuclip Games. Vuclip’s market success in on demand entertainment is built on its leadership at the intersection of technology, consumer insights and media. Run by a world class team, Vuclip, Inc. and affiliate companies are headquartered in Milpitas, California and have a presence in Singapore, Kuala Lumpur, Mumbai, Delhi, Pune, Dubai and Jakarta.