Despite challenges, APAC’s OTT market poised for rapid growth

By Jim O'Neill on May 03 2016 at 7:15 AM
Despite challenges, APAC’s OTT market poised for rapid growth

APAC’s OTT market is at a tipping point, with the next two years being critical to the markets growth and penetration, said new research that also forecasts rapid growth by 2019, indicating Australia’s market could grow to $230 million, Indonesia’s to $40 million and Thailand’s $54 million.

But there are challenges, said the report, Prospects for Premium OTT in Asia Pacific, from researcher MTM and sponsored by Ooyala and Vindicia, including:

Broadband infrastructure - Industry executives believe broadband infrastructure challenges and limited access to affordable fixed-line services are significant barriers to growth. In Australia, the average connection speed is 8.2 Mbps, about half that of the UK and US. Thailand has a similar average of 9.2 Mbps, but only 9% of consumers subscribe. In Indonesia, broadband penetration stands at just 1% with an average speed of 3.9 Mbps. Participants view APAC as a mobile-first market.

Content localization - Despite the appeal of international content, respondents believe local-language programming is essential to the proliferation of premium OTT services in Indonesia and Thailand. Furthermore, they expect stiff competition among local pay-TV providers over licensing of existing local content libraries.

The Netflix Factor - While the presence of Netflix will drive OTT market expansion in general, consumers will struggle with Netflix's one-size-fits-all offering. Because of this, there will be a period of uncertainty as consumers choose between standalone Netflix and competing offerings from local content providers, whose multiplatform and bundled packages ultimately may prove more appealing.

"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 , VP and GM of APAC for Ooyala. "APAC OTT providers must build a rich, personalized 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."

Stay tuned.

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