Magazine article Variety

In Asia, Netflix Opts for TRIAL BY FIRE

Magazine article Variety

In Asia, Netflix Opts for TRIAL BY FIRE

Article excerpt

Netflix's announcement this month that it is planning a global launch suddenly puts the U.S. streaming video giant on the map across the Asia-Pacific region, but along with a host of local rivals, it faces challenges over content, pricing and regulation. What's more, one of the biggest obstacles for Netflix in Asia is the sheer size of the region - and the economic and developmental gradients it must negotiate.

Wealthy and westernized, Australia and Japan (where Netflix debuted in 2015) are worlds apart from India, which boasts a huge English-speaking population and a fanatical film culture, but has poor broadband eonneetability and a host of formidable local players. In other high-income territories such as Hong Kong and South Korea, audiences have strong preferences for local-language programming.

Netflix will either have to dedicate a great deal of management time to Asia or accept that progress will be modest. Leaving out China, where Netflix is not yet launching, analysis firm Media Partners Asia estimates the company will have 9 million subscribers by 2020 in a region that stretches from Japan to Australia and India.

The streaming giant has decided on a pricing strategy comparable to its existing plans in North America and Europe. That makes it more expensive than many local competitors, and leaves piracy an attrac- tive option. On its Jan. 19 earnings call, Netflix admitted the approach may limit its uptake to the affluent middle-class, rather than winning over the masses.

Competition from local and regional services is significant and growing. Hong Kong-based PCCW's Vue is now in Singapore as well; Singapore-based SingTel's Hooq serves India, Thailand and the Philippines; HBO Go is in Hong Kong and the Philippines; and Iflix, which includes MGM as an investor, is operational in Malaysia, the Philippines and Thailand.

Chinese video platforms are also beginning to expand into Greater China and Southeast Asia, even as China blocks access to foreign media groups. China-based LeEco (formerly LeTV) is in the vanguard of expansion into Hong Kong.

Among the strengths of the existing ventures in Asia are their lineups of local content. Hollywood movies are niche programming in several Asian markets, and local platforms are involved not just in producing movies and TV shows, but in developing talent and user-generated Web content. In India, Bollywood (and regional-language) movies are a must-have that pay-TV and satellite groups Star VideoCon (Fox), Sony and Tata Sky have already locked in. While Netflix's own content is a strength in North America, much of it has been licensed to existing platforms, and will not be available for the company's use in Asia for at least three years. …

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