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The streaming video market is experiencing a tremendous explosion in Southeast Asia and platform owners from all corners of the media, telecoms, and broadcast world are making big investment bets.
The global lockdown has accelerated the dynamic growth that was already happening. However, it’s not all smooth sailing and there will be speed bumps, along with winners and losers.
This has been exemplified in the US market. Although short-form mobile video platform Quibi amassed 1.7 million downloads in its first week, it has screeched to a halt. After the initial rush of subscribers, consumer interest has waned as industry pundits argue whether its strategy, marketing, content, or all three failed. With SingTel shuttering regional streaming platform HOOQ in May, and user-generated video darling TikTok closing its Vigo Video and Vigo Lite services in India last week, we can see that winning in the video market is high risk and high reward. This is particularly true for Asia.
The over-the-top (OTT) landscape in Asia is as rich and diverse as the countries and cultures in the region, and that requires experience and expertise to navigate successfully. In the US, the streaming landscape is dominated by the media giants like Netflix, Amazon Prime, Disney+, Hulu, and HBO Max, who either have huge content libraries or billions of dollars to invest in production. In Asia, there is a mix of global, regional, and local streaming services, making it a complex market where ownership typically comes via a telecoms player, media company, or broadcaster. Local language content is proving to be king (or queen), commanding 60-70% of TV audience share vs. international content across SEA. Research shows that many Asian households are using three to four streaming services in order to get their preferred mix of international and local content.
The key difference to the US and Europe is that OTT consumption is primarily mobile app-based in Asia. This offers significant benefits to advertisers and streaming platforms in terms of targeting, measurement, verification, fraud reduction, and brand safety, which are more advanced for app-based OTT than connected television (CTV).
Also, the model of ad-supported video on demand (AVOD) is growing rapidly in Asia, and new hybrid models are also emerging where consumers accept a low subscription fee with some ads. Both models are gaining traction with recent Brightcove research showing 51% of Asian consumers would prefer to pay no fee and watch ads or pay a low fee for fewer ads.
Consumers have fully embraced OTT in Asia. There has been a 60% increase in weekly average minutes viewed during lockdown according to Media Partners Asia. Viu is the number one OTT provider in the region in terms of the number of users and minutes viewed. This growth in consumption has prompted the Chinese media and web giants like Tencent’s WeTV and iQIYI to expand their presence in Asia by rolling out their services outside of China as well as making strategic investments in Asian OTT players. Additionally, we’re seeing the major Indian OTT players like Sony Liv and MX Player follow a similar path and further expand across the region.
The World Federation of Advertisers estimates 5-40% of digital media budgets are allocated to OTT in Asia. Brands have become increasingly bullish on OTT and a recent WFA and SpotX poll showed 47% of brands looking to increase spend between 10-20% in the next year.
This growth means there will be a fierce battle for new customers as platforms fight for the business of millions of new subscribers. In APAC, OTT content is often consumed on a smartphone with earphones plugged in, resulting in a focused and engaged viewer. This is a highly desirable environment for advertisers, and because OTT sits between linear TV and programmatic, there is a lot of impression-level deterministic data that can be deployed.
Brands that are familiar with OTT have become more sophisticated and demanding in how they measure success and optimise. This is a reflection of OTT’s effectiveness as compared to other channels.
Based on recent OTT campaigns run via the SpotX platform, brands are looking beyond click-through rate (CTR) and viewability to embrace metrics like completed view rate (CVR), cost per completed view (CPCV), invalid traffic (IVT), time in view, and on-target reach (OTR). Additionally, there is no cookie confusion as the digital ID of the user is locked in via app identifiers.
IAB analysis shows OTT and CTV are most resilient to pandemic-related CPM compression which means advertisers are still willing to pay premium prices for high quality inventory and audiences. Recent food and personal care OTT campaigns run via SpotX in Asia have achieved more than 90% viewability, in-view for three seconds, on-target reach rates of more than 80%, and invalid traffic rates of less than 0.6%.
These are attractive metrics for any marketer. With marketing budgets under intense pressure, only those media channels that deliver the highest efficiency, effectiveness, and brand safety will remain on the plan. This is why OTT will become a consistent part of any brand marketer’s toolbox.
Gavin Buxton leads the growth of SpotX in the APAC region, where he is focused on helping media owners and brands realise the value of premium addressable video advertising across all streams and all screens. Gavin has over 19 years of global experience in the digital advertising space, having worked in leadership roles at tech and publishing companies including Microsoft, Turner Broadcasting, and LinkedIn, and spending the last ten years based in Asia building businesses. His working knowledge spans television, digital, search, programmatic, mobile, content marketing, and social media.
Gavin is an active participant and thought leader within the advertising industry. He is a sought-after speaker and contributor to industry bodies, including his past board membership of the IAB SG. In 2018, he was named as “one of the top people to look out for” by The Digerati Asia Pacific, The Drum’s annual celebration of industry leaders that go out of their way for digital.