Premium online video has "a long way to go" in Asia Pac, new MPA study shows

Premium/freemium SVOD services are making a mark on video consumption in Asia, but there's a long way to go, says Media Partners Asia's (MPA) updated consumer study.

Netflix in Australia and MyTV Super in Hong Kong are strong, but overall, "the uptake of premium video services remains low," the new edition of the Asia Pacific Video Consumer Study says. At the same time, sentiment towards premium online video is "turning positive" in most markets. The exceptions are Singapore, Malaysia and Taiwan.

The study, which covers more than 15,000 internet users across Australia, Southeast Asia (Indonesia, Malaysia, Philippines, Singapore, Thailand), Hong Kong and Taiwan, was published today by indie consultants/research providers, Media Partners Asia (MPA), with consumer research specialist BDRC Continental.

The relatively low take up of premium online video services, including ad-supported and subscription-based offerings, reflects "the early stages of transition for user behavior as well as business development in both developed and emerging markets," MPA says, adding that "global platforms such as YouTube, now joined by Facebook, are establishing domestic online video strongholds, reaping the rewards of marketplaces that are still largely geared towards ad-supported services".

“Premium content providers with ad-supported and freemium online video services have much to do if they want to cater to mass audiences," says MPA vice president, Aravind Venugopal. 

In addition to a strong showing in Australia, Netflix has started to show deeper usage patterns in niche segments across Southeast Asia and Taiwan, Venugopal adds.

In Taiwan, iQiyi has also enjoyed a good start, while freemium offerings from local broadcasters are showing promise.

The study shows that MyTV Super from Hong Kong broadcaster Television Broadcasts Ltd (TVB) has momentum, while Toggle, from Singapore broadcaster Mediacorp, "has attracted a respectable audience".

Also in Hong Kong, PCCW has managed to scale usage and adoption across its OTT offerings.

In Southeast Asia’s growth markets, "actual engagement and usage of ad-supported and subscription-based premium video services is low among internet users, although watch time among engaged users is growing in certain markets. Online video is at an early stage of development in Indonesia, the Philippines and Thailand. While reach has substantially grown for some OTT platforms through wholesale telco partnerships, usage is low, although there is positive momentum in markets like Indonesia," Venugopal says. 

Take-up of premium online video services was highest in Hong Kong among the eight markets covered by the study. MPA says this result was "thanks to the popularity of catch-up and freemium pay services from the territory’s two leading players: telecoms leader PCCW, which runs a free-to-air and a pay-TV service as well as OTT offerings including Viu and ViuTV, and terrestrial leader TVB, which operates OTT offerings MyTV and MyTV Super".

But even so, the survey shows that most ad-supported services, including those backed by free-to-air broadcasters, are being used by no more than of 15% of internet users on a regular basis. 

The survey also shows significant overlap between SVOD and pay-TV in developed markets with high levels of pay-TV penetration. In Taiwan for example, 94% of SVOD subs also have a pay-TV subscription. The overlap is almost as high in Hong Kong and Singapore. 

In emerging markets, with lower levels of pay-TV penetration, "a different competitive dynamic is taking shape".

In Indonesia and Philippines, for example, less than a third of SVOD subs have a pay-TV subscription. "Telcos in both markets are bundling SVOD services with fixed and mobile broadband plans, subsidising subscription payments and data consumption," MPA says.