APAC is the leading growth engine for almost all economic, technological, and developmental indicators, and nowhere is that more true than the growth of digital video consumption and production.
With a multitude of countries and cultures to consider, the video content and advertising marketplace requires local understanding and a nuanced approach to succeed. APAC is evolving at an accelerated pace, in some instances progressing in its own distinct ways.
The Southeast Asia region is a mobile-first market and for millions in many countries, like Indonesia and the Philippines, the smartphone is the primary way to access the internet. Popularity of over-the-top (OTT) services has skyrocketed in Asia and coupled with the falling data costs, more consumers are opting to view OTT content via their smartphones. Mobile broadband subscriptions hit 1.4 billion in APAC (excluding China) in 2019, greatly surpassing the 229 million pay TV subscribers according to Media Partners Asia. According to the recent e-Conomy SEA 2019 report by Google, Temasek, and Bain & Company, interest in streaming services like HOOQ and iflix hit all time highs in 2019, increasing 26x in Indonesia, 28x in Thailand, 8x in the Philippines, and 7x in Vietnam over the last four years.
More advanced markets like Australia are experiencing the golden age of video. With more than 14 video and movie streaming services available, including the recently launched Disney+ and Apple TV+, the choice has never been greater. In Japan, the 2020 Tokyo Olympics offers the first real opportunity for OTT streaming services to fundamentally change the traditional linear viewing experience of live events.
To showcase the diversity and innovations in APAC, we have launched SpotX Fast Forward, a video series to introduce the key players, influential trends, and major markets driving the rapid evolution of premium video advertising in the region.
Here is a brief look at five key dynamics shaping premium video across the region, which we’ll be covering more thoroughly in the SpotX Fast Forward series.
1. Fragmented video content and audiences
Both video content owners and advertisers are diversifying their video strategies to leverage new on-demand streaming environments and target incremental audiences. Traditional broadcasters, who have a rich heritage in content, are rapidly building out digital video offerings, for instance ABS-CBN has launched iWant in the Philippines.
Native regional and local OTT streaming services, such as Viu, iflix, and HOOQ, have seen significant growth in Asia due to flexible payment models and investment in local content. As a result, agencies and brands are broadening their digital video advertising investment strategies to move with the consumer, take advantage of new premium video environments, and reduce their reliance on the duopoly.
2. Local stories; local perspectives
Asia offers a rich tapestry of cultures, and with regional OTT streaming platforms doubling down on professionally produced local content—whether that’s remakes of western shows like Viu’s Indonesian take on Pretty Little Liars or home-grown originals like iflix’s award-winning KL Gangster. HOOQ signed a three-year partnership with Singaporean filmmaker Anthony Chen, who directed Wet Season, HOOQ’s first original movie for Singapore which took home the top prize at the Golden Horse 2019 Film Festival awards in November. As they are based in the region and have in-depth market knowledge, the likes of iflix, HOOQ, and Viu have a competitive advantage over some of the global players entering the region.
3. Multi-tiered pricing models
TV viewing in Asia has been dominated by free to add TV rather than paid cable subscriptions. Subsequently for OTT video on demand (VOD) services, Asians have higher price sensitivity compared to the west in terms of paying for content. According to a recent Brightcove and SpotX study, 30% of the respondents surveyed across nine Asian markets wanted a free ad-funded option for their OTT VOD service, with 21% responding that they would consider a hybrid low-payment, limited-ads model.
With clear consumer demand, advertising-supported video on demand (AVOD) streaming services can quickly scale their user base, and by offering first- and third-party audience data for targeting, also appeal to advertisers. Subscription video on demand (SVOD) provides a predictable revenue stream, however, it takes longer to scale. To improve OTT profitability, broadcasters are increasingly offering multi-tiered pricing to audiences who like the ability to select the best package based on their viewing requirements and budget. By giving audiences control, broadcasters are able to build deeper engagement with them and monetise at more points on the demand curve.
4. Monetised live streams
With viewing habits fragmenting across a proliferation of devices, consumers are expecting to watch live broadcasts on the go on mobile devices. With advances in technology broadcasters are now able to deliver addressable ads in these new environments and monetise these moments. For example, TVer (an OTT app for the five major free-to-air broadcasters in Japan) will be offering live coverage and catch-up streaming of the 2020 Olympics, which they hope will substantially increase their monthly active users. Server-side ad insertion (SSAI) technology is essential in order to manage large volumes of concurrent streams and deliver an addressable and seamless advertising experience.
5. Performance-driven video
As brand-related spend continues to drive the growth of programmatic advertising, programmatic video ad spend saw phenomenal growth globally due to its ability to deliver against key branding metrics. However, APAC marketers remain performance-driven when it comes to video, particularly due to the dominance of YouTube and Facebook and the performance metrics they offer.
In their 2020 upfronts, Australian broadcaster Nine announced that they will move to a Cost-per-completed-view (CPCV) model for all of its broadcast video on demand (BVOD) and short-form video, meaning advertisers only pay for ads with a 100% completion rate. Similarly, as a direct response to market feedback, we launched SpotX PurePlay to help agencies and advertisers broaden their programmatic video strategies by allowing them to buy high-quality video formats in premium environments with campaign performance guarantees like CPCV, completed view rate (CVR), and viewability thresholds.
Discover more of the latest video advertising trends and innovations with SpotX Fast Forward here: https://www.spotx.tv/resource/fast-forward/