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I wonder if Netflix can sink, and if other platforms can go up.

Netflix escorted the 92nd Oscar.

1 month ago, Netflix’s hugely nominated producer for this Oscar with 24 nominations refreshed the history of Oscar nominations, but at the awards ceremony on Monday, it was a joyous event. The film “Irish”, which cost $ 175 million, failed, and only ended with the best supporting actress of “Marriage Story” and the best documentary of “American Worker”.

On the road to being recognized by the traditional movie industry, Netflix has struggled. Not only the Oscars, but at the Cannes Film Festival in 2017, Netflix rolled over the car and the two films that entered the main competition unit came home empty-handed. It also caused huge controversy in France because of the way it was shown. “Whether a movie that has been shown directly on a streaming platform but not shown in a theater is eligible to participate in the Cannes judging?” Since then, Netflix has “retired” Cannes for two consecutive years.

Netflix’s identity is an important reason why it is not recognized by the traditional movie industry. It is a streaming video platform. Since 2007, Netflix has created a subscription video-on-demand (SVoD) service. The 2013 investment drama “House of Cards” is a watershed in its development history, which has attracted millions of orders. Of paid subscribers and led the wave of “cord-cutter” in the United States.

Compared to the domestic video platform that has lost 14 years, Netflix has no ads, and has been profitable through paid subscriptions.

In 2016, Netflix moved to Southeast Asia. The Asian market is the fastest growing market for Netflix in the past two years. As of the third quarter of 2019, Netflix had 14.48 million subscribers in Asia, a growth rate of 150% compared to the first quarter of 2017. Asia has a huge demographic dividend. According to data from social media marketing company We are Social, the length of time that users watch TV and streaming videos is 4.25 hours in the United States, more than 3.5 hours in Thailand, and about 3 hours in Indonesia.

Compared with Western countries, Asian countries have very different cultural methods and value systems, and immature users’ willingness to pay and habits are all important obstacles for Netflix’s layout in Asia.

Netflix follows the “elite route” in Southeast Asia, with a monthly fee of $ 7-8, and local content on the platform is scarceIt attracts middle-class people who speak English in Southeast Asia and have a high income level.

Although it has swept across 190 countries around the world, Netflix ’s streaming video market in Southeast Asia is not one of a kind. Not only facing the challenges of the rising local streaming platforms such as iflix and Hooq, but now Grab and Go-Jek, which also started their own ride-hailing businesses, as well as China’s overseas video platforms, have to step into this market and try to find a sense of existence. .

According to Statista, the United States accounts for 46% of the global SVoD revenue share, followed by China and Japan, which account for 7% and 6%, respectively, and the data from the ten ASEAN countries only add up to 2%. . Although cable TV still occupies the majority of the local area and provides limited entertainment and film and television programs, watching video through streaming media is a trend. Viewers want to get more high-quality content in this way.

Depression represents potential. In today’s Southeast Asia, streaming media is a hot business.

Streaming Video in Southeast Asia — A Hot Business

Compared to Netflix, which has led the development of streaming media in the United States in 2007, streaming video platforms in Southeast Asia have been heating up 8 years later. Netflix ’s rivals in Southeast Asia, Malaysia ’s iflix and Singapore ’s Hooq, were born around 2015. Developed to this day, this market is fragmented, and there is no oligarch of “Youai Teng” (Youku, Tencent, iQiyi) like China.

Whether the platform content is sufficiently localized, the price is not suitable, the payment method is inconvenient, and the traffic is not cheap are all important factors that influence users to choose the platform. In order to achieve continuous user growth and user retention, each has its own magical powers.

Hooq has a long way to go. It is jointly funded by Singaporean companies Singtel, Sony Pictures and Warner Bros. Backed by the Hollywood giants, the Hooq platform has the best-selling Western episodes such as “Big Bang”, “Flash”, “Super Girl” and so on.What I want more is original local content.

Viewers in emerging markets rely on high-quality local movies and TV shows, but these contents are also very scarce. To achieve homegrown local content, Hooq even established Hooq Filmakers Guild, a company that trains local filmmakers. Up to now, there are more than 30 Southeast Asian content on the platform. According to the company, viewers in Indonesia, the Philippines, and Thailand have exceeded 50% of their local content in total viewing time.

The former CEO of Hooq, Bithos, once bluntly stated that he and Netflix are not competing in the same market. Netflix is ​​targeting high-end customers using Apple phones, and they are, to some extent, a growing middle-class representative. Hooq is “sinking down” and wants the most basic users who use Android.

In order to cater to the needs of price sensitive people, Hooq is the first to implement weekly payment in pricing, and even launched a daily payment of $ 0.25 in Indonesia. Paying on a weekly basis for Southeast Asia can be said to be on-demand. Bithos believes that Southeast Asia is a market that has not established long-term payment habits for content, and monthly payments do not work.

was born in Malaysia, trying to match Netflix ’s streaming platform iflix, which is similar to Hooq in practice. Iftt co-founder Britt admitted in an interview that there is no denying that there are elite groups in every country, and they will like popular English content. But in the Southeast Asian market content competition, local content is the most critical.

Millennials are the true growth engine for iflix. According to iflix, millennials who have grown up in their homeland really want to see local dramas, not Hollywood shows that are all the rage. Therefore, iflix cooperates with more than 600 film workshops in Southeast Asia, and the localization of the content can already use 22 languages ​​to distribute in different countries in Southeast Asia. Of the company’s 600-person team, 400 are serving localized content.

When talking about “why local content is important locally”. Britt cites an example of iflix, a controversial film “Nur”, about a Muslim leader and sex worker falling in love. In fact, by discussing the sex industry and religion in the same context, this film reflects the cultural complexity that still exists in Malaysia and touches marginal groups in society. This play broke many records because itTo some extent, it reflects the sensitive issues of society.

The advantage of the local platform is that you can really take root here, discover sensitive issues and challenges in the society, let the film truly reflect certain social problems, and understand what this means for Malaysia; it is even more Understanding the standards and expectations of local audiences for content is a giant that has rushed in from abroad and does not have the ability.

In terms of pricing, iflix also has a daily / weekly / monthly payment model, while maintaining the same low price strategy as Hooq. Taking Thailand as an example, if the daily payment is 7 baht (approximately US $ 0.22) and the weekly fee is 29 baht (approximately US $ 0.93), even if the monthly payment is not more than 100 baht (approximately US $ 3.2), Less than half of Netflix’s pricing.

These streaming media platforms, which are growing locally, do not seem to be in a hurry to make a profit, and have invariably adopted a strategy of accumulating users first, revenue and monetization “slightly later”. However, I have to admit that investing in original content is very expensive, and relying on the revenue model supported by paid subscriptions, it is not easy to achieve profit. iflix was in a dilemma of cash flow depletion in 2018, and has been slow to realize the valuation of a $ 1 billion unicorn.

In this tug-of-war with content on the local platform, Netflix does not want to easily give up, although there are no more than 5 local content on the platform about Southeast Asia. In order to make a breakthrough, at the end of 2019, Netflix replaced the content director in charge of Southeast Asia and Australia, inviting Aga, the senior vice president in charge of Southeast Asia and India at the BBC, in an attempt to reshape the content innovation strategy in Southeast Asia. The American company intends to further penetrate 8 Southeast Asian countries including Thailand, the Philippines and Malaysia by adding 100 original programs.

The competition is intensifying. Singapore’s taxi unicorn Grab and Indonesia’s Go-Jek will both end. In May last year, Grab adopted a model of cooperation with Hooq, and users can watch Hooq content directly on the Grab platform. Go-Jek announced in April 2018 that it would enter the online content—online platform Go-PlaY, adopts the same daily / weekly / monthly subscription payment plan as Hooq, iflix, etc., and also intentionally plans to produce content, claiming that it will be a 95% platform focusing on Indonesian content.

The advantages of Grab and Go-Jek are that as a super app, they have multiple portals to collect user information, and they can better understand the user’s content preferences. This is quite similar to the algorithm used by Netflix in the United States to understand user preferences. In terms of payment convenience, Grab and Go-Jek also have their own electronic payment wallets, GrabPay and GoPay, which can form a complete business closed loop.

Even the Indonesian unicorn e-commerce platform Bukalapak has created its own streaming platform that can broadcast live football matches and cartoons.

In such a lively market, Chinese players will certainly not be absent.

Chinese streaming video platform, just entered the Southeast Asian Central Bureau

In terms of discourse system and cultural identity, China and Southeast Asia are quite sympathetic. China’s costume palace operas do not resonate in Europe and the United States, but they are no less popular in Southeast Asia. “Er Qing died in Vietnam” is one of the typical microcosms.

During the broadcast of “Yanxi Raiders”, due to the leak of Zing TV in Vietnam, the source of the film was leaked, so that when the domestic iQiyi was updated to 48 episodes, Vietnam had already broadcast 57 episodes, letting Fu Yi girls (Fu Cha Fu Heng and Wei Yi’s CP fan) Er Qing, who hated them, first took the “box lunch” in Vietnam. “Er Qing died in Vietnam” rushed to Weibo hot search.

In addition to “Yanxi Raiders”, from “Returning Pearls” from the 90s of the last century, to “Zhen Yanzhuan”, “Legend of Wu Mei Niang”, and “Yueyue Biography”, the popular dramas pursued by Southeast Asia is not cold at all. Local media platforms such as Vietnam and the Philippines spend large sums of money each year to purchase the rights to Chinese popular dramas.

Compared to the weak user base of European and American content, Chinese film and television output in Southeast Asia seems to be more popular. To a certain extent, it also gave confidence to the overseas streaming video platform.

Last January, Tencent launched WeTV in Thailand. Thailand isTencent Video’s first overseas market. According to reports, WeTV wanted to focus on Southeast Asia when it was born because the potential demand was very high. The content on WeTV is a mixed version. Chinese TV dramas popular in Thailand dominate the mainstream, with a small amount of Thai, Korean and American dramas. Subsequently, WeTV strengthened the output of local content, and cooperated with three local Thai stations (state-owned free TV stations) to output Thai local TV series and other content. After one year of development, WeTV has expanded to many countries including Vietnam and Indonesia.

10 months after Tencent entered Thailand, iQIYI ’s overseas streaming platform iQIYI settled in Malaysia, iQIYI chose the “platform + technology” joint output model, and also worked with the Malaysian media. Platform Astro collaborates (Astro owns Malaysia’s largest radio station, largest TV show provider and Malaysia’s largest artist agency).

Popular self-made content such as “Amazing Whispering”, “Icebreaker”, and “City without a Master” are also the main content on the platform. At the same time, iQiyi also provides technical output on the content production process, including evaluation casting, intelligent editing, etc.

Tencent and iQiyi’s platform charging model adopted in Southeast Asia copied the domestic experience and adopted a “free + paid” hybrid approach. WeTV’s monthly paid membership is priced at THB 139 (approximately USD 3.2), which is the same as monthly fees for iflix and Hooq.

In addition to being attracted by the blue ocean of Southeast Asian streaming media, China ’s streaming video platform goes abroad, in part because domestic users have peaked and are close to saturation, and the domestic advertising revenue they rely on is not optimistic. . According to financial data for Q3 2019, Tencent Media’s advertising revenue was 3.7 billion yuan, a year-on-year decrease of 28% and a month-on-month decrease of 17%. Although it claims to be due to the uncertainty of content scheduling, the video investment advertising revenue has fallen, but it has to be acknowledged that in the past year, the development of real estate developers and car manufacturers (the two main sources of advertising investment) has weakened , Tencent Video will face long-term pressure on advertising revenue.

Iqiyi is facing the same problem in China. According to the 2019 Q3 financial report, the number of subscription members has exceeded 100 million, and member revenue has exceeded advertising revenue for three consecutive quarters, accounting for over 50%. This means that once the size of domestic members peaks, iQiyi’s income will fluctuate.

Going to Southeast Asia, there is no doubt that there are considerations to continue to expand the user base. It’s just that Tencent and iQiyi have just opened up in Southeast Asia. This cake looks good, but it’s hard to eat.

文 | 李宇飞 @ 出海

Picture | Visual China

This article is authorised and does not represent a position. If reprinted, please contact the original author.

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