Surviving a pandemic: A look at the evolving tastes of Asian consumers in OTT and pay-TV viewership

from Television Asia Plus | October 2020

How 5G will change the game for Asian streaming services

By Monina Eugenio

The ongoing COVID-19 pandemic has got everyone staying at home. With movement limited, the television screen has become a quick escape from the reality that this virus is not going anywhere anytime soon.

Before the pandemic, traditional TV, broadcast, print media, and pay-TV platforms were popular among Asian consumers.

According to the leading analytics company GlobalData, the Asia Pacific region closed 2019 with a total of 772.1 million pay-TV accounts. China and India are the largest pay-TV markets in the region with an estimated 394.2 million and 181.5 million accounts, respectively, at the end of 2019. Collectively, the two countries accounted for 74.6% of the total pay-tv accounts in the Asia Pacific region in 2019.

Moving forward, GlobalData predicted that the total number of pay-TV accounts in the region will grow in the period between 2019 and 2023, reaching 798.6 million accounts by the end of 2023.

However, GlobalData said that they expect pay-TV adoption will decline in some of the most growing markets such as Singapore, Australia, and Vietnam, as a result of substituting traditional pay-TV subscriptions for OTT video platforms.

How Asia is tuning in

Hrushikesh Mahananda, a Senior Analyst of Telecoms Market Data and Intelligence at GlobalData shared that TV and broadcast media were popular among consumers across the region in the first few months of the pandemic.

He said, “News channels and informative programs were the prime factors driving an increase in TV viewership. Indoor TV viewing of free content experienced higher adoption rates among consumers.” Hrushikesh added that despite this, traditional TV viewing is facing tough challenges during COVID-19 in terms of a lack of fresh content.

Now that we are several months into the pandemic, the internet has become the main source of medium to explore the digital world.

Consumers are rapidly adjusting to the world of digital reality and are shifting to OTT video and live TV content streaming. Also, OTT consumption has increased at a greater pace during the pandemic.

Hrushikesh pointed out that OTT service providers are offering a diverse range of content across multiple languages and producing original TV content has been a major hit among consumers in the Asia Pacific.

Meanwhile, pay-TV operators are adding existing services with OTT video offerings.

OTT will continue to transform the way content is consumed in the Asia Pacific region as users are willing to pay for OTT platforms.

Hrushikesh explained, “OTT players offer a wide variety of content, thus creating an attractive experience for consumers. The increase of the OTT video has taken a toll on the traditional pay-TV industry in the region, and it has changed the way consumers view the content as they can now watch programmes whenever they want, by streaming them ‘live’ or downloading them for later viewing.”

How the pandemic is transforming Asian viewing habits

At the onset of the spread of COVID-19 in the early months of 2020, governments across the Asia Pacific have implemented lockdowns to curb the spread of the disease.

With more people staying at home, it is without a doubt that the pandemic has created a significant transformation in consumer behaviour in terms of streaming and viewing habits across the region.

An example of this is a shift in viewing habits and preferences leading to access in multiple screens and devices at the same time.

Hrushikesh said, “Consumers in the Asia Pacific region are gradually shifting to video-on-demand (VOD) services (OTT viewing), spending more screen time on online platforms to browse content during the pandemic which would benefit the media and entertainment players such as Netflix, Amazon Prime Video, Hulu, and many others, driving new subscriber additions.”

In addition to this, OTT media platforms have become more popular during the pandemic, but mostly among the younger generation as kids and teens spend more time indoors. Hrushikesh added, “The increasing popularity of live streaming is taking over younger viewers in Asia.

There will be a shift in digital consumption as more people opt for video streaming platforms which offer a mix of ondemand labeled and live content.

Live streaming focused on niche groups like gaming are gaining popularity and attracting investments.”

The OTT perspective

One of the most well-known OTT players in the market today is Netflix. In its Q1 shareholder’s letter released in April 2020, Netflix reported that it saw a temporary higher viewing and increased membership growth.However, as lockdowns around the world are slowly lifted, Netflix also expects viewing to decline and membership growth to decelerate. The company also noted that it has been maintaining the quality of its service while its employees around the world adapt to working from home.

Meanwhile, in Netflix’s Q2 shareholder’s letter released in July 2020, the OTT platform said that it is prioritising to restart productions safely and in a manner that is consistent with local health and safety standards.

Productions have slowly resumed and Netflix said that its 2020 plans for launching original shows and films continue to be largely intact.

When it comes to Southeast Asia viewing tastes, Myleeta Aga Williams, the Content Director of Netflix for Southeast Asia and Australia said that the market has very diverse tastes and preferences, both in terms of genres and where the content comes from. She said, “It reinforces our belief at Netflix that great stories can come from anywhere.”

**Myleeta Aga Williams, Content Director, SEA and Australia, Netflix**

Myleeta shared that Korean content remains to be popular in Asia, with shows like It’s Okay Not To Be Okay, Crash Landing On You, Itaewon Class, and Kingdom doing phenomenally well. Hollywood content is also popular among viewers such as Project Power, The Old Guard, Snowpiercer, and Never Have I Ever. Meanwhile, international content like Money Heist and Dark is popular with the Asian audience.

“Last but not least, local storytelling continues to remain a very important pillar of our programming.

In Southeast Asia, we are seeing our members local content like Tootsies and the Fake and The Maid from Thailand, Through Night and Day from the Philippines, Imperfect and Love For Sale 2 from Indonesia, and Jailbait from Vietnam,” Myleeta added.

In beefing up its original content, Netflix continues to identify the white spaces in its catalogue and stories that its audiences want and love.

The OTT giant is also working with creators from all over the world to look for unique, and best-in-class stories to produce and acquire.

Myleeta shared, “Ultimately, our goal is to keep growing our content catalogue so that there’s always something to watch for everyone and to suit every mood and need.

We will also approach this market by market in Southeast Asia. For instance, in Indonesia, we have announced original films and in Thailand, we launched with a series.”

The pay-TV perspective

Pay-TV company A+E Networks has also felt the hit of the coronavirus pandemic in terms of production.

According to Saugato Banerjee, Managing Director of A+E Networks Asia, some of the company’s local productions were affected as a result of travel bans and lockdowns across the region.

**Saugato Banerjee, Managing Director, A+E Networks Asia**

He admitted that while it was challenging to do shoots, they were able to adapt by quickly hiring on-ground crews who were already present to navigate travel restrictions. He added, “In Korea and Japan, production has resumed, and we have been able to progress and air all projects in the pipeline.”

One of the challenges for A+E Networks was to ensure the health and safety of its team across Singapore, Tokyo, and Seoul by instituting work from home guidelines. Saugato shared, “As teams have adapted and adjusted to the ‘new normal’, we have to face up to the business challenges of dealing with a pandemic-induced global recession.

Part of this is making sure that we have a steady supply of content or repackage existing content in fresher ways. But it’s also important to increase the reach of our programming through new distribution partnerships or AVOD platforms.”

Across the Asia Pacific market, Saugato shared that the popular shows from A+E Networks include Season 12 of MasterChef Australia, whose launch coincided with many of the lockdowns in the region, mirroring the growing trends that A+E Networks is seeing as home bakers and chefs learn new culinary skills.

Lifetime Original Movies continues to perform strongly for the channel, as well as its home and lifestyle shows such as #Instafamous Lives. In addition, HISTORY also had an increase in viewership across flagship factual entertainment programs like Pawn Stars, Alone, Swamp People, and Mountain Men. For Crime+Investigation, A+E Networks also saw the continued trend of Asia-based crime programs, in addition to Surviving R Kelly Part II.

Saugato said, “In Korea, we debuted, to great success, our first premium drama investment, Backstreet Rookie on Lifetime.

Our digital channels in Korea continue to set trends and be part of the cultural zeitgeist.”

Meanwhile, in Japan, HISTORY set viewership records by combining popular global titles like Ancient Aliens with meaningful local acquisitions. Saugato shared that in March, the 75th anniversary of the bombing of Hiroshima and Nagasaki took place, and A+E Japan was a key participant in the co-production between History US and Hulu Japan to bring the globally relevant Japanese story of Hiroshima: 75 Years Later to worldwide audiences.

Demand for more in-home entertainment increased as more people stayed home due to lockdowns. “At A+E Networks, due to our extensive catalogue and content ownership, we have been able to meet this demand easily and find ourselves in a strong position.

One of the challenges facing the industry is the supply of content to satisfy on-demand services, as mentioned, we have been able to help partners with this demand during this period,” Saugato said.

Saugato added that demand for content is growing exponentially across media, time, and length formats, as well as cross-border demand for international content. The global premiere of Backstreet Rookie found an audience, thanks to A+E Networks’ deal with iQIYI.

Outlook post-COVID-19

OTT and pay-TV players are adapting well to the current situation while being able to meet consumer demand for content.

The same goes for consumers as people have now adjusted to the new normal brought about by the pandemic.

Hrushikesh commented, “With the rising popularity of OTT content, it’s expected that consumption habits will continue to change, driven by ongoing advances in digital platforms and new technologies with increased speeds and network capacity.”

He continued, “As we move towards the future post-COVID-19, we expect many of these viewing habits and the way people consume content are going to stay post the pandemic. People are going to continue to stay online, looking for new experiences that will fulfill their needs and passions.”

Hrushikesh expects that there will be a continuous leap in the consumption of content like entertainment, gaming, cooking, and exercise across platforms such as video channels, social media, and content verticals.

“TV services are certainly making life on lockdown more manageable, but it’s online video platforms, social media platforms like Instagram, and video conferencing tools like Zoom, which are uniting families and friends.

Going forward, mobile TV viewing platforms are also likely to increase among consumers,” Hrushikesh concluded.

Meanwhile, A+E Networks is looking forward to the changing needs of its affiliates, partners, and consumers as the world begins to emerge from COVID-19. Saugato said, “With the increase in viewership that we have seen, we will now see trends emerge around our shows, this will help to inform our ongoing content strategy.

We also look forward to partnering with more platform providers and brands across the region as we continue to invest in our brands and entertain our growing audience.”