TV ASIA Plus: There were concerns that OTT would bypass Pay-TV. But a lot of infrastructure is held by Pay-TV operators or telcos. Can OTT operators truly go solo?
No. OTT at its core is video content delivering through IP technology and IP technology is being provided by its cable internet or its telco, so the infrastructure is necessary. OTT service is “on top of” that infrastructure and there is absolutely no way to bypass that.
TV ASIA Plus: It’s been said that “cord cutting” is a threat to Pay-TV. So is OTT a threat or opportunity?
In Asia Pacific last year, there were 411m Pay-TV subscribers and this number is expected to grow to under 700m in 2020. That’s a compound annual growth rate of about 6%. Several markets in Southeast Asia receive Pay-TV penetration under 30%, Indonesia for example. When you look at that, there’s a lot of upside – there’s so much more of the market to go.
TV ASIA Plus: Would you say that in Asia, broadcasters could be providers of OTT as opposed to an “independent” supplier like Netflix or Hulu?
In the US, Netflix accounts for 25% of bandwidth. In some ways, the broadband providers actually provide Pay-TV services as well and they are actually benefiting from it.
Consumers actually have to pay for broadband at home for them to get the service. For services like Hulu, it is in response to an appetite for premium video content streamed online; that you can select WHAT you want to watch, WHEN you want to watch. From a studio perspective – “I have this large content library; my first window might be Pay-TV and the second can then be a Netflix or a Hulu.” So they can co-exist so that it is not a zero sum that it’s either Pay- TV or Hulu – it could actually be both.
TV ASIA Plus: In the US, it’s taken broadcasters and studios some time to relinquish their online rights. Do you see this as a case for Asia as well?
In the US, the OTT services are spending money for content. That’s what changes the game. Before, if it takes (giving away) some of your premium content just to see if you can make money and then split that; that doesn’t help the studio. What’s changing is that there are some of these (OTT) providers that are paying for the content upfront. So if you are going to pay me then I’m going to look at you like how I look at any other customer.
TV ASIA Plus: In terms of content, Hulu is an interesting example as it has its own original content. Do you see this as a new way of positioning OTT?
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