OTT video is expected to witness further traction with the availability of variety of content and higher investment on 4G networks across the region, according to a new report from analyst firm GlobalData.
Faster bandwidth, growing 4G coverage, ever-increasing smartphone and pay-TV penetration, improving payment options, falling data tariffs and rising per capita income are set to collectively spur the OTT video market in APAC. But GlobalData emphasizes that mobile is a key platform for OTT video services owing to poor fixed network infrastructure in many APAC countries.
Expansion of LTE and the introduction of 5G will also give a further boost to the market, as the OTT players will be able to provide enhanced user experience in terms of HD/UHD, linear and AR/VR content going forward.
The share of 4G mobile connections in Asia was pegged at 26.2% of the region’s total at the end of 2016. That is expected to surge to 53.9% by 2022, offering ample opportunities for OTT players in the years to come, said GlobalData analyst Macolm Rogers.
“OTT players can expect rosy days ahead in APAC region. Apart from expansion of 4G, the availability of low priced smartphones and sizable population of internet users in the region will also support the growth of OTT video market,” he said.
International players like Netflix and Amazon have already established a presence in APAC, but local players such as Viu, Hotstar and iflix are also exercising possible strategies to expand their user base by combining international content to their local and vernacular content for low priced monthly subscription plans.
In order to beat the competition, some OTT providers have started focusing on providing enhanced user experience in terms of HD/UHD, linear and AR/VR content, which is also facilitated by expanding 4G coverage.
Consequently, Rogers added, “Consumers can expect premium content at competitive prices from OTT players as the competition intensifies. The premium content will be on offer along with the vernacular content.”
In emerging Asian countries, OTT players are trying to come up with innovative solutions, including the option to download content as an alternative to streaming over a poor broadband connection. They’re also using technology to optimize video streaming based on bandwidth availability.
The abundance of free content on the Internet and low income levels are the major challenges for monetizing OTT video in all markets. Most OTT players have adopted a hybrid model of AVoD and SVoD/TVoD, where AVoD is aimed at attracting users while SVoD drives monetization. Some OTT players are even partnering with telcos to offer both benefits, which are believed to help OTT players in addressing billing challenges.