Consumer demand for on-demand video and broadband bundles in Asia may be increasing, but SVOD-based streaming platforms have a long way to go and the journey is proving to be "long and arduous", a new report released this morning by Media Partners Asia (MPA) shows.

MPA's first "Asia Video Consumer Panel" research found Netflix, iflix and Viu were the top streaming performers among the regional majors, and said local pay/free-TV incumbents, such as TVB and PCCW's Now TV in Hong Kong and Astro in Malaysia, were doing "well".

The research covers six markets – Hong Kong, Indonesia, Malaysia, Philippines, Singapore and Thailand – with 1,000 users in each spread across all demographics and skewing towards mobile consumption in emerging markets (Indonesia, Malaysia, Philippines and Thailand). Another 6,000 respondents will be added between now and MPA's annual APOS event in April 2017, which will enable MPA to compare and contrast progress.

Key findings include the relationship between existing and new video players.

"The importance of bundling with telecom and IP-based pay-TV operators to drive onlinevideo adoption is becoming critical," says MPA vice president, Aravind Venugopal.

"As we are still very muchin the first innings of the SVOD online video cycle in most Asian markets, the journey formost platforms from building awareness to generating trial users, and then to finallyconverting them to regular users, is long and arduous," he adds.

WHAT CONSUMERS REALLY THINK

For now, consumers' perceptions of SVOD services – the Net Promoter Scores (NPS) – are on the whole negative in Hong Kong, Indonesia, Singapore and Malaysia, the report found.

Netflix leads in four of the six markets,including Hong Kong and Malaysia.

Indonesian consumers aren't convinced, with negatives all round.

Results are mixed in Philippines and Thailand, where only Netflix and Hollywood HD have positive scores.

In Singapore, Netflix fares worst. In Thailand, the bottom spot is held by HOOQ, while in Malaysia, Escape comes last.

BUILDING AWARENESS

In four of the six markets, local players have taken the lead in building awareness and conversion from a free to paying model. This is led by incumbent operators with strong local and regional content and, in some cases, sport.

The majority of survey respondents across all markets are buying OTT services through their existing telco or pay-TV provider, the report says.Netflix is the exception, with a high proportion of survey respondents saying they have signed up directly.

Talking about how they found out about OTT services, most respondents said their awareness was driven by word of mouth, TV commercials, online/social media and SMS/emails direct marketing from telcos and pay-TV platforms. Actual sign ups are being driven by offers (bundles or free trials) from existing operators.

CONVERSION FROM FREE TO PAID

Conversion from free to subscription, in general, has been low, the report says.

Asked what content would prompt them to start paying for streaming services, consumers put new Hollywood movies and TV series, released simultaneously with the U.S., at the top of the list. Korean drama is, perhaps surprisingly, in the top three demands only in Indonesia. Consumers in Hong Kong and Singapore say new Chinese drama is key. Lifestyle content made it to the top three triggers in Indonesia and Malaysia. Documentaries and factual programmes are in the top three in the Philippines and Thailand.

Global and pan-regional SVOD services that focus solely on international content are "fighting to take the lead", Venugopal says.

STREAMING VS BROADCAST

The survey also found that the shift from traditional access to TV screens via set-top boxes to multi-screen streaming services has been swift. Venugopal says this could have a significant impact.

In homes that have both pay-TV and streaming, 42% of consumers in Hong Kong said they use streaming (including on-demand through smart TV sets and set-top boxes) more than pay-TV (defined as traditional access to linear channels through the set-top box and scrolling through the EPG). In Thailand, streaming was 36% of all viewing, and in Singapore 27%. The lowest of the six countries was Indonesia at 23%.

Although this indicates that traditional viewing remains dominant, the speed at which consumers have shifted is significant.

"It's early days still," Venugopal says, adding that the current set-top-box-based business models, without a two-way interactive option, are under threat.

"Consumers are after anywhere/everywhere delivery," he says.

PIRACY

Piracy continues to be a concern in all six markets, Venugopal adds. The problems seems worst in Thailand, where 9% of respondents admit to watching video through illegal boxes. Singapore is second at 7% and the lowest is 3% in Indonesia. This excludes people who don't know their boxes are pirated and those who don't want to admit their boxes are pirated, or who have "grey area boxes" from neighbouring countries.

MOBILE DATA VS WIFI

Data costs have a significant impact on streaming, the report says.

Respondents say they use wifi rather than mobile data to stream most of the time.

Given price options for premium content (including day and date releases), the majority choose free content that they consume over wifi. The second choice is for a subscription service that bundles content and data.

"Telcos and VOD providers need to find more innovative models to sell on-demand services," Venugopal says. Consumers, he adds, "don't want pricing volatility. They want to know costs are fixed".

SPORTS

In most markets, well over a third of respondents say they are interested in live sports.

More than half of respondents in Indonesia, Philippines and Malaysia express interest in stand-alone sports OTT.

In Singapore, this dropped to 41% interested in stand-alone sports, followed by Thailand and Hong Kong, which are both below 40%.

Venugopal says the Philippines' result is not surprising, given the high usage of the NBA app.

About half of respondents all round say they would be willing pay for stand-alone sports OTT platforms, provided the price is right.

50% of respondents say they would keep regular pay-TV services but ditch expensive sports packages if sports was offered on a stand alone basis for less money.

Venugopal points out the sports pricing disconnect between consumers and providers that emerged in the study.

Published on 3 November 2016