The European and American markets are becoming saturated, and Netflix actively wants to open up territory in the Asian market, but now the streaming giant is facing a new rival.
The streaming service Viu, which started in Hong Kong, has made great gains in Southeast Asia, and the number of subscribers even surpassed Netflix.
According to data released by Media Partners Asia recently, Viu has become the second largest streaming service in Southeast Asia, with 5.2 million subscribers in the region, surpassing Netflix's 4.8 million and second only to Disney+'s 6 million.
Viu is currently the audio-visual streaming platform with the highest number of active users in Southeast Asia, but this does not mean that they have come out on top. In addition to the number of subscribers lagging behind Diseny+, there is also a considerable gap in viewing time from Netflix.
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The number of subscribers in Southeast Asia surpasses Netflix, and Viu is the second largest local streaming service
Viu was launched in 2015 by PCCW, a subsidiary of Hong Kong’s richest man Li Ka-shing’s youngest son, Li Zekai. In the first half of 2021, its OTT business revenue grew by 29% to US$83 million, and its losses were also significantly reduced by 75% to US$300 million. And Viu's revenue has grown significantly by 47% to US$62 million through subscriptions and advertising, which is the biggest driving force for the growth of OTT business.
In addition, it is mentioned in the financial report that Viu's monthly active users and subscribers have reached 49.4 million and 7 million, up 37% and 62% respectively over the same period last year.
In the previous earnings conference, PCCW also revealed that they plan to expand partnerships and even consider listing the streaming division.
According to the "Bloomberg" report, Viu’s business model is completely different from the full subscription system of Netflix or Disney+. Instead, it adopts a business model of free part of the content and subscription fee for part of the content, which is more similar to that used by Chinese OTT platforms such as iQiyi. The charging method, and focusing on the popular Korean drama content in Southeast Asia, has launched multiple language versions. It has successfully grown rapidly in the local area and has become the second largest streaming industry.
Viu CEO Janice Lee pointed out that their goal is to become the leader of digital entertainment in Asia. They want to create an entertainment service for Asia, and they know that Asia is a region with diverse cultures, looks and preferences.
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Southeast Asia is also a very potential market. A previous market study by Google, Temasek, and Bain & Company pointed out that by 2025, Southeast Asia’s Internet economy will reach US$300 billion, and audio-visual streaming services will be very popular in the region. One of the most popular Internet services.
The hybrid model of free and paid content is a lower threshold charging method, which is more suitable for the environment in Southeast Asia and has higher competitiveness in the case of rampant pirated content.
On average, Viu produces about 40 original albums each year to expand the attractiveness of the platform.
At the same time, Viu also seized the opportunity to cooperate with local telecom companies to launch an action plan to attract users to subscribe at a cheaper price than the computer version, which only costs $2 per month.
Although Netflix continues to experiment with mobile subscription solutions in India, Malaysia and other places, the time of entry is later than Viu.
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How can Viu break through the siege between the Chinese and American giants?
Although Viu seems to have strong growth momentum now, there are still many challenges and threats waiting for them to overcome.
In addition to Southeast Asia, Viu also provides services in 16 markets including the Middle East and Africa. However, its operations in these markets have been ineffective and it is difficult to replicate the successful experience in Southeast Asia. In 2019, it also withdrew from the Indian market due to insufficient funds.
Funding is the biggest worry for Viu's future development. Although temporarily surpassing Netflix's performance, the streaming leader is beginning to increase investment in Asia.
In November last year, Netflix CEO Reed Hastings said that their development in Asia is just beginning.
Since 2018, it has invested US$2 billion in Asia, and plans to double its investment in Asia from 2021, and actively cooperate with countries to launch original content suitable for local areas.
Netflix has also said that since 2016, the film and television content they provide in Southeast Asia has doubled every year, and in 2020, nearly 500 new content will be added for local people to watch.
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China’s streaming giant is also a threat that Viu cannot ignore. iQiyi has also begun to focus on Southeast Asia. In March this year, it established a local brokerage company to prepare for the launch of a talent show to attract young people from Malaysia, Indonesia and other Southeast Asian countries. Expulsion, train his own artists, and even more openly become an Asian content platform.
However, Viu also emphasized that they have been fighting with many competitors in the market and have maintained very strong growth. However, in order to further expand their territory, they have also considered splitting the streaming department into a separate listing to raise funds and carry huge resources. U.S. streaming giants contend.
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[This article is reprinted with permission from "Digital Times".
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