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According to Globaldata, Over-The-Top Telecom Workers, Video Platforms and Content Developers in APAC Should Join Forces to Increase Profits

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According to Globaldata, Over-The-Top Telecom Workers, Video Platforms and Content Developers in APAC Should Join Forces to Increase Profits

The regional over-the-top organizations lead the OTT video market in APAC or Asia-Pacific. These companies offer an array of contents that are available not only in multiple languages but also in various genres and that too in competitive price ranges. Therefore, GLobalData, the digital media organization suggests that the content developers, telecom workers and video platforms that are associated with OTT should join their hands together to increase the profits and revenues of their individual business.

The market features strong competition between regional players such as iflix, Viu and Hooq and international players such as Netflix, Amazon and YouTube. In addition, there is an intense competition in local markets like China and South Korea.

The company’s report ‘Over the Top Video in Asia Pacific’, reveals that due to high costs of content rights acquisition, OTT players are opting for more margin-friendly content production strategies to secure subscribers and viewers.

Malcolm Rogers, the Telecom Analyst at GlobalData, says: “Exclusive content deals such as those for sports broadcast rights secure loyal viewers but at a high cost, embarking on content production enables providers to better tailor content to target demographics while offering more cost control compared to buying from major studios. Alternatively rather than investing in labeled content, some OTT platforms focus on live streams from amateurs and professionals, a strategy with a very low relative cost base.”

In terms of models, most OTT providers in APAC offer a hybrid of live and on-demand content, as well as a hybrid of advertising video on demand (AVoD), subscription video on demand (SVoD) and transactional video on demand (TVoD).

OTT video platforms that focus on offering live streams of both professional and amateur content creators in niche categories like gaming, fashion and makeup have mostly gained success. The new content format has wide appeal among young viewers, while investors are encouraged by the potential for quicker returns compared to traditional OTT video due to relatively lower costs.

Rogers continued: “OTT providers in the APAC region face heavy competition for both contents as well as customers. One common strategy to combat rising costs of content is to invest in own content production. However, this requires large amounts of investment capital and may require years before profitability is reached.

“Another strategy is to focus on niche content with either lower content costs, or a dedicated and loyal fan base willing to pay a premium for niche content. Larger OTT players that are part of a wider group of media or technology companies may be the best poised for own content production.”

In terms of pricing trends, regional OTT video challengers price their SVoD services below the international giants Netflix and Amazon, while single market video platforms tend to price SVoD the lowest.

According to the report, OTT companies need to consider their assets, the overall goal of the platform (e.g., becoming profitable as a standalone service, generating synergy with a sister business etc.), the offers of competing platforms in their footprint, and choose an appropriate content and pricing strategy.

Rogers concludes: “OTT video is increasingly gaining viewership over traditional content distribution channels. Content production houses with related distribution businesses should not be afraid of OTT, but rather forge partnerships with OTT platforms and telecom operators for content distribution.”

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