Hong Kong – With the rapid advances in technology, people can tune into their favourite OTT platforms on different kinds of electronic devices anytime and anywhere. OTT refers to over-the-top distribution of multimedia content via the Internet. For online entertainment companies, the challenge is how to revise their strategies to adapt to rapid developments and high demand for such content. At the thematic seminar held earlier (14 March), “New Opportunities in the Explosive Growth of Online Entertainment” at the Hong Kong International Film and TV Market (FILMART), representatives of four renowned online entertainment companies discussed how to tap into the tremendous OTT platform market by producing and sourcing quality localised content.
Yang Xianghua, Senior Vice President of iQIYI mentioned that there are two revenue models in place at present; advertisement revenue and user fees. The number of videos that generated more than Rmb1 million in profit for the company surged from 35 in 2015 to 122 in 2016, which points to a huge online market. Conference moderator Patrick Frater, Asia Editor of Variety, raised the question of how to tackle the issue of many online entertainment companies running at a loss. In his response, Mr Yang noted that iQIYI has invested a lot in purchasing and producing content. In order to attract audiences, a significant portion of the content is free in the early stages. However, he predicted that the platform will turn the deficit into profit, as the number of subscribers and page views increases and the pay-per-user model is established. As audience tastes change quickly, companies need to constantly explore new initiatives and adjust their strategies, which results in high investment risks. In addition, LINE TV features re-runs of dramas and live broadcasts in a multi-pronged approach to attract audiences.
Among various markets, Japan was one of the last to join the OTT platform revolution, since the country’s traditional entertainment culture remains strong and it is difficult for industry players to break into the Japanese market. Nakase Keiko, Director (Animation Division and New Business Development) of Mytheater DD stated that there will be a gradual increase in the number of Japanese audiences who watch videos on OTT platforms on mobile devices, and the market of VOD services platforms is expected to reach US$1.3 billion in value.Despite the tremendous market potential, there are also various challenges for companies who wish to enter the market. For instance, while NETFLIX and Amazon produce original dramas for their VOD platforms in Japan, the companies face competition from traditional TV stations. Ms Nakase believed the companies must differentiate their programmes from traditional TV content. For instance, greater emphasis may be placed on star casting to arouse audience’s interest.
In conclusion, online entertainment companies must cater to the audience’s tastes, keep a firm grasp on market trends and provide quality, localised content to attract more viewers, in order to tap into this fast-changing and tremendous entertainment services market.
