The View From Asia – The rise and rise of OTT in Asia
June 27, 2023
In his View From Asia column, Unmish Parthasarathi, the Singapore-based Founder of Picture Board Partners, the Strategy, Innovation & Venture Development boutique, reflects on why, how & who is making OTT more mainstream.
Content is King, but Distribution is clearly the Queen as OTT in post-pandemic Asia has come on par, and, in some places, is beginning to exceed audience share compared to traditional television.
Asia is expected to add a billion consumers online in the course of this decade. There was another billion who preceded them – but took thrice as long. Both these large swathes of human adoption have benefited greatly from three macro trends, amongst others, which don’t see any signs of abating:
1. Population that is young, especially in South and Southeast Asia. Depending on the country, between a third and half are below the age of 35. Most are a growing presence in the workforce and a source of purchasing power;
2. Connectivity that is affordable and accessible. The consumption of video content in ever higher volumes – from short form on YouTube to long form movies and live sport – has let telcos to grow 4G from mid to mass market proportions; and,
3. Entertainment alternatives at the price or convenience, such as sports events, theme parks or the cinema, are few. Coupling this with long, daily commutes and per capita dwell time quickly aggregates up to a third of the waking hours.
More than fifty years ago, a Stanford professor called Roy Amara is said to have famously observed that we overestimate the impact of a new technology in the short run, and underestimate it in the long run. What timeline is deemed ‘long’ was left to us by the long-time Head of the Institute of the Future.
Depending on the global macroeconomic cycle of boom & bust, the consensus is that ‘long’ can be anywhere between a decade and two. What also shortens this trend are adjacencies or concurrent trends that happen in parallel with the one in our focus and provide it with tail winds.
OTT surpassing TV has benefitted as much from Amara’s Law as from adjacencies such as cheap smartphones, digital payments, a supply of new/next generation content, good connectivity – and, sadly, also a pandemic.
A decade ago, Sport OTT was seen, at best, as a nice to have that was a catch up service or enabled multiple court coverage at a Grand Slam. At worst, however, it was seen as a threat to your next TV channel subscription renewal.
In keeping with the Age of Listicles, below are my ‘Top Ten Trends’ to explain the coming of age of OTT in Asia. Most of these, again unfortunately, share COVID-19 as a milestone that’s created the most material change in content consumption for half a century, since the onset of television in the 1970s:
1.) Consumer behaviour is changing at scale. A new generation has begun to announce their arrival. They keep a smartphone by their bedside. They have multiple digital payment wallets. And, they shop and socialise online three-times as much or as often as they do offline.
2.) Connectivity maturing to ensure the utilitarian nirvana of 100% uptime. Few instances of outage by telcos or cable operators during the pandemic when millions home schooled, made umpteen video calls and logged on at work from home is an under recognised but real achievement.
3.) Migration to cloud infrastructure that began before the pandemic and accelerated through 2020 as the virus spread from East to West. Moving off-premise coincided with the largest human migration of workers in a very short time and was helped by a drastic cut in response time to provide scalable, remotely accessible backend infrastructure.
4.) The rise of new, more ‘intelligent’ technologies such as Machine Learning, Computer Vision, Neuro-Linguistic Processing, Blockchain and Artificial Intelligence. These have enabled OTT services to evolve from their original roles as online aggregators of video content, to digital merchants trading attention or personalised preferences with dynamic pricing served through a privacy compliant segmentation.
5.) Major sports events such as the Tokyo Olympics, FIFA World Cup and the IPL remain key milestones. Both drove sizable capital investment by their media licensees who had twin TV-OTT platforms such as Viacom Sport-Jio Cinema in India, Astro in Malaysia, EMTEK Vidio in Indonesia, and Foxtel/Kayo and Nine/Stan in Australia.
6.) Regulation on first part data and a citizen’s rights to privacy has changed the way Personal Identifiable Information (PII) is collected. The simultaneous deprecation of third-party cookies has elevated the value of platforms who have first-party data. Enter OTT services that have location, payment and profile details of the consumer.
7.) The successful deployment of addressable advertising by OTT platforms comes at a time when marketers are seeking alternatives to brand spend on search or social. Astro Malaysia exemplifies this – combining online inventory with on-air spots on television and radio, as well as on-ground activation entitlements from its owned and/or operated events.
8.) Content investments in additional/alternative programming for next-generation demand had been rising prior to the pandemic. This was even before the limitations of the back catalogue, whose origins and vintage were in traditional TV, were revealed. Old wine in new bottles, not!
9.) The creator economy helped solve new programming needs. Content commissioners have access to new genres and proven formats. Both come with a sizable, loyal (and increasingly addressable) audience. And best of all, the brand ambassador comes with a proven marketing channel.
10.) A sharpening of the ‘awareness-intent-purchase’ demand funnel through OTT interfaces is creating new opportunities for ‘shoppable content’. YouTube pioneered app downloads using graphic overlays over a video with users encouraged to click a link. The ecommerce potential to combine emotive moments in sport or drama with ‘flash offers’ seem limitless.
In conclusion, the origins of OTT in Asia were as a set top box-enabled, on-demand service, operated via a remote control and fulfilled by return-path data and a local head-end. Thankfully, trial & error, new technology, capital, and executive (and shareholder!) angst has enabled OTT to find a product-market fit that is increasingly optimal and promises much for the next age of story-telling. The ‘Martini Moment’ – Anytime. Anyplace. Anywhere. – has arrived in Asia. Cheers to OTT!
