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Premium OTT Market in APAC to Experience Rapid Growth by 2019

  • May 05, 2016
  • By 
    Computerworld Philippines

The premium over-the-top (OTT) services market in the Asia Pacific (APAC) region will experience a rapid growth by 2019 despite challenges, according to the study by Vindicia, a billing solutions provider, and Ooyala, a video, analytics and advertising technology provider.

“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 of Vindicia. “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.”

The study-which was conducted by MTM-explored the evolution of premium OTT in Australia, Indonesia and Thailand. The study presented the perspectives of over 80 senior industry professionals about the current and future trends and development in the OTT market.

According to the report, the OTT market in Australia will grow from US$85 million in 2015 to US$230 million in 2019. In Indonesia, the market will grow from US$7 million to US$40 million; and from US$8 million to US$45 million in Thailand.

In addition, the local service providers is expected to have a significant portion of the market and will dominate in Indonesia and Thailand, while Netflix will be the dominant player in Australia.

“The study provides a snapshot of industry perspectives about the prospects for premium OTT across the region. Local executives are positive and excited about future market prospects – and expect local players to perform strongly, especially in Thailand and Indonesia,” said Jon Watts, Managing Partner and co-founder at MTM. “International providers will need to find ways to partner with local pay-TV providers, telcos and ISPs to gain traction with local customers.”

The study also underscored the three main challenges to the expansion of premium OTT market in the region.

Firstly, the industry executives believe that broadband infrastructure challenges and limited access to affordable fixed-line services barred growth of premium OTT market.

Secondly, respondents think that local-language programming is still essential to the proliferation of premium OTT services in Indonesia and Thailand despite appeal of foreign content. In essence, they expect stiff competition among local pay-TV providers over licensing of existing local content libraries.

Lastly, the presence of Netflix in the region will drive the expansion of OTT market in general; however, consumers will struggle with its one-size-fits-all offering. As such, there will be uncertain period as consumers choose between standalone Netflix and competing offerings from local content providers.

“Intensifying OTT competition and major market consolidation, like what we’re seeing in Australia, are key identifiers of an industry on the crux of a massive opportunity,” said Keith Budge, Vice President and General Manager of APAC for Ooyala.

“APAC OTT providers must build a rich, personalised user experience with unique content offerings that are competitively priced, and further, have a data-driven approach to understand audience behavior and preferences. Having analytics and insights will be a major differentiator to drive revenue and reduce churn as new OTT services launch into the market,” he added.

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