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Streaming into Southeast Asia: how Netflix, HBO compete with regional players like iflix and HOOQ

When Netflix became available in 2011, it showed audiences and content producers the possibilities of streaming. freestocks on Unsplash

Big streaming giants AppleTV and Disney Plus entered the United States market late last year. Many believe they will challenge the dominance of established player Netflix.

Meanwhile in Southeast Asia multiple streaming companies are vying for market share.

Southeast Asia promises substantial returns from a huge market of over 600 million people. However, it is a heterogeneous region divided between different political regimes, languages and tastes.

As global streaming companies Netflix and HBO pursue a Southeast Asian market, they have to compete with numerous regional start-ups, including Viu (Hong Kong), HOOQ (Singapore) and iflix (Malaysia), which have market advantage due to their geographical proximity and local market knowledge.

When it all began

The uptake of streaming by Southeast Asian audiences has been rapid. Malaysian start-up iflix reported 17 million subscribers in 2019 and Netflix 14.5 million, a 150% increase over two years.

Few consumers were encumbered by legacy subscriptions to cable or satellite TV, but they wanted more than the cheap content offered by broadcast television.

More consumers use mobile technologies and want to be entertained as they take the bus or sit in peak-hour traffic. Their tastes have been shaped by Korean dramas and Hollywood films.

Regional content production has matured in the past two decades with the widespread adoption of digital technologies and smart content from a generation of savvy creative producers.

This new generation of content producers works in Southeast Asia’s “media cities” like Indonesia’s capital, Jakarta; Singapore; Kuala Lumpur, Malaysia; Bangkok, Thailand, and Manila, the Philippines. Here they have access to infrastructure and resources and draw ideas from trends in pop culture.

These content producers are increasingly looking for regional and global audiences and have found streaming an ideal distribution technology.

When Netflix became globally available in 2011, it showed audiences and content producers the possibilities of streaming.

Netflix not only offered audiences uncensored content, Southeast Asian viewers of Netflix were able to join global conversations about shows such as House of Cards.

Netflix’s move into Southeast Asia was helped by attractive subsidies offered by the Malaysian government to shoot the series Marco Polo at the Pinewood Iskandar Studios in Johor in 2014.

HBO moved into streaming on the back of its long presence in Singapore as the cable-television channel for major Hollywood studios. In 2012, HBO began commissioning original local content including action-horror film Dead Mine and the series Serangoon Road with Australia’s ABC.

HBO’s regional ambitions became clearer when rising Indonesian star director Joko Anwar was picked to helm the fantasy-horror mini-series Halfworlds.

Regional services soon began to pop up, vying for market share with Netflix and HBO.

Agility of local players

The local services secure exclusive streaming rights from local production and their content becomes more valuable, with producers selling their content well in advance of its completion.

Local media producers are also relatively autonomous, enabling them to be flexible in who they supply.

The region’s top local streaming players are:

1. Iflix

This Malaysian start-up was established in 2014 to beat domestic rival Astro, which operates satellite and cable services, into streaming.

Rapid expansion and integration with telco providers enabled iflix to secure its market position.

Iflix attracted capital investment from America’s MGM in 2015 and Indonesian media heavyweight SCM in 2016.

When iflix launched in Indonesia in June 2016, it was with its commission Magic Hour: The Series, directed by Indonesian director Asep Kusdinar, in collaboration with Screenplay Films (a subsidiary of SCM). The film is a sequel to Asep’s previous film Magic Hour.

2. HOOQ

Established in 2015, HOOQ is a collaboration between Singapore’s telco firm Singtel and US film studios Warner Bros and Sony Pictures. It has major operations in Singapore, Thailand, Philippines, Indonesia and India.

Its strategy is to partner on local feature films, often with the HOOQ logo prominent in the opening credits. HOOQ recently commissioned a series based on award-winning On The Job from Pinoy director Erik Matti.

Like HBO and iflix, HOOQ shows how Hollywood studios play a significant role in Southeast Asian streaming services.

3. Viu

The large Hong Kong telecommunications provider PCCW established Viu in 2015. It expanded to Southeast Asia in 2016.

Viu focuses on supplying Korean, Chinese and South Asian content. It has embarked on producing numerous original series, including Keluarga Baha Don, Salon and Sunshine.

In 2018, Viu co-produced The Bridge in partnership with HBO Asia, a remake of the successful Sweden-Denmark series. Its version of The Bridge is set on the causeway between Malaysia and Singapore – a symbolic bridging of entertainment markets.

The competition heats up

To consolidate its global expansion and to facilitate content acquisition, Netflix opened a regional office in Singapore in 2016.

Netflix acquired original-language feature films from across the region to attract new regional subscribers. These films included the Indonesian action film Headshot by Indonesian directors Timo Tjahjanto and Kimo Stamboel with rising action star Iko Uwais. It was followed by another Iko Uwais vehicle, Timo Tjahjanto’s The Night Comes for Us, which also attracted genre audiences around the world.

Netflix developed its first Southeast Asia series, Ghost Bride, with Malaysian directors Quek Shio Chuan and Ho Yuhang at an estimated cost of RM30 million (US$7.3 million).

One common strategy is to feature a multinational cast, as in the case of Grisse featuring Indonesians, Singaporeans and Malaysians. Companies also look for what Astro calls “Nusantara content”, which draws on stories and content creators from across the region.

Another strategy sees platforms focus on genres that can cut across national and linguistic barriers. Garon De Silver, HBO Asia’s director of production, noted: “… [D]espite different culture and languages in Asia, they (audiences) shared common beliefs in supernatural creatures. Asians believed in the same monsters – they just had different names for them.”

Following Halfworlds, HBO commissioned another two seasons of Halfworlds (Thailand directed by Ekachai Uekrongtham and Philippines by Mikhail Red), and the six-episode horror anthology Folklore featuring directors from across Asia and led by Eric Khoo from Singapore.

Astro has similarly pushed regional horror series, including Sembil9n (Nine) and Nawangsih, both targeting the Malaysia-Indonesia markets, and licensed these to Indonesia partner MAXstream, a subsidiary of telco provider Telkomsel.

Streaming has opened new possibilities for content creation and distribution, liberated audiences from expensive contracts and locked programming, and offered new, edgier content. Behind the scenes, big regional and global players are moving in. They have huge investment capital and ambitious plans.

Streaming is massively reorienting content production industries across Southeast Asia, disrupting distribution and exhibition patterns, and intensifying competition.

Whatever happens, Southeast Asia is now firmly a part of a global streaming industry and its global audience.

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