22018 Brightcove, Inc. All Rights Reserved.+
Note that these fve countries have vastly diferent internet and mobile users base, as well
as internet and penetration rates. Both Singapore and Hong Kong are considered mature
markets, whereas India, Indonesia and Thailand are emerging and mobile centric markets.
THE HIGHLIGHTS.
The value proposition for OTT TV services is simply not strong enough for most
consumers. Despite globally famous media brands launching OTT TV services and
increased water cooler chatter over TV shows, the industry is failing to present a strong
value proposition to prospective customers. Creating a strong value proposition equates
to designing and implementing smart customer acquisition and retention strategies that
strike a balance between a robust content library, the pricing sweet spots, multi-platform
multiscreen accessibility and exceptional user experience.
Trial and promotion drives acquisition, but content drives retention. It’s no surprise
then why Netfix, Amazon, and Hulu plan to spend more than $8bn, $5bn, and $20bn for
content, respectively, in 2018. This puts them in the same spending league as other big
budget television and flm companies, like HBO parent company, Time Warner ($8bn),
Fox ($8bn), and Disney ($7.8bn). Every streaming service is under intense pressure to
have a robust content library, which is critical to their retention strategy.
Time Warner
$8bn
Netflix
$8bn
Amazon
$5bn
Hulu
$20bn
Fox
$8bn
Disney
$7.8bn
BIG BUDGET TV & FILMOTT COMPANIES
INTERNET & MOBILE USERS BY COUNTRY
NU
M
BE
R
OF
U
SE
RS
MobileInternet
PE
RC
EN
T
PE
NE
TR
AT
IO
N
India
463 million
844 million
34%
63%
Thailand
57 million
55.6 million
82%
80%
Indonesia
132 million
177 million
50%
67%
Singapore
4.8 million
4.7 million
84%
82%
Hong Kong
6.5 million
6.2 million
87%
83%
32018 Brightcove, Inc. All Rights Reserved.+
Consumers are highly price-sensitive. With pay TV, it is a single purchasing decision
for the service, where a single sign-up unlocks access to a bufet of channels at a fxed
monthly subscription fee. Pay TV subscribers are somewhat accustomed to paying several
hundred dollars a month in some countries, but with OTT TV, it is a single purchasing
decision for every content series, and consumers tend to be more price sensitive.
Noting the ubiquity of free streaming and torrent sites in Asia, consumers are already
conditioned to gaining access to free content, despite the poor UI on torrent sites. This is
defnitely a competitive threat that any OTT TV service provider needs to acknowledge
and address by creating a diferentiated and superior ofering. To work around the price
sensitivity factor and ensure that pricing is as painless as possible, an ad-funded model
or a package with limited ads could also be viable options.
Access and experience on mobile is one of the key motivators for OTT adoption and
retention. Being able to access and watch TV on a mobile device is a big driver in OTT
adoption, and it’s an even a bigger driver in OTT retention. Consumers tend to watch TV
on mobile devices, at any time, to fll any idle stint. While the TV screen is still a major
fxture in the living room, what’s equally important is the ability to access content on a
personal mobile device.
Tolerance to ads is low. Most consumers can tolerate one to three ads in total, but no
more than three ads in a single commercial break. Consumers are long accustomed to
the ad experiences of linear and pay TV, where they don’t have a choice in the matter
of how many ads are included within the programming. But with an OTT TV service,
consumers expect more content and less ads, due to their past conditioning of linear
and pay TV experiences.
1-3 COMMERCIALS PER
BREAK = ACCEPTABLE
OVER 3 COMMERCIALS PER
BREAK = NOT ACCEPTABLE
Price matters. Free trials and promotions are a strong initial driver for consumers to sign
up; however, price is actually the top barrier to adoption. The propensity to pay for OTT
TV service is present, but consumers are unlikely to sign up for a service if they see no
value, even if such services are priced signifcantly cheaper than pay TV services. It is
clear that users do see value once they try services, and lapsed users are more likely to
consider re-subscribing.
42018 Brightcove, Inc. All Rights Reserved.+
CONSUMPTION TRENDS: HOURS, PLATFORMS, & DEVICES.
There are only so many hours in a day or week devoted to TV watching. Up to 40
percent of consumers said they spend one to five hours a week watching content, while
up to 27 percent said they spend six to 10 hours. This indicates consumers generally allot
a limited number of hours per week to watch movies and TV shows. However, in emerging
markets like India, Indonesia, and Thailand, which are mobile-centric, consumers watch
more TV than in mature markets like Singapore and Hong Kong.
Consumers are accessing TV and movie content across multiple platforms. Among
television viewers, up to 73% said they preferred to watch content on free-to-air (FTA)
broadcast channels, while some preferred pay TV channels and free online streaming
services. Generally in these countries, FTA broadcast channels tend to be the go-to
channels for local content, since local content is not readily available on free or paid
online streaming channels.
Movies are the anchor content on free streaming sites. Up to 44% of consumers said that
free online streaming sites were their preferred platform for movie watching. Illegal free
online streaming services are the main barriers to OTT adoption. Today, given that pirated
content is readily available, consumers are impatient and unlikely to wait for the latest
blockbusters to be released via OTT in their respective markets. Because consumers now
demand TV content on their own terms, they have the capacity to search and stream
content at any time.
Singapore15%17%37%7%6%
Hong Kong25%10%40%5%
Indonesia7%27%40%12%7%7%
India13%30%24%14%10%9%
Thailand8%28%27%14%8%15%
< 1 Hour1-5 Hours6-10 Hours11-15 Hours16-20 Hours20+ Hours
HOURS SPENT WATCHING CONTENT
0%
10%
20%
30%
40%
50%
60%
70%
80%
OthersPaid Online StreamingFree Online StreamingPay TVFree-to-Air
ThailandIndiaIndonesiaHong KongSingaporeThailandIndiaIndonesiaHong KongSingapore
MOVIESTV SHOWS
TV SHOWS & MOVIES ACROSS PLATFORMS。