This April, Netflix surprised investors when its total audience fell for the first time in over a decade.
Thankfully, Netflix had a secret weapon – the Asia Pacific (APAC) market.
Between April and June 2022, Netflix added one million subscribers from the region due mainly to the popularity of TV shows like South Korea’s Emmy-award-winning Squid Game. APAC was the only region that Netflix added subscribers in that quarter.
GWI’s latest study on ‘Why TV streaming services have their eyes on APAC‘ tells us that this makes perfect sense. Businesses and advertisers now have a big opportunity to learn about this growing audience and effectively reach them. Below, I’ve shared five key trends that will be useful to keep a pulse on.
Streaming is growing, and ads do not bother consumers as much anymore
In the latest wave of data, GWI reported that the time people spend watching online streaming has overtaken traditional TV for the very first time in APAC, and time spent watching online TV will only increase.
Also Read: What Netflix really missed? Not earnings
The more time people spend watching TV online, the more advertisements they will watch. Yet, contrary to popular belief, ads are not likely to dissuade APAC TV watchers from their streaming activities.
Why? APAC consumers are the most likely to approve of ad-supported tiers and to say they would exchange their personal data for free services. Tighter wallets due to economic pressures are a contributing factor. This also means that if ad-based subscription models were to land anywhere, there’s a good chance that it would be in APAC.
Mobile-first, but TV sets are still not going anywhere
More people in APAC are streaming content on their mobile phones than on TV sets, despite the fact that the opposite proved true in other parts of the world. The number of mobile streamers here is only growing.
Outside China, the number of people using TV subscription services on their phones grew by 33 per cent between 2018 and 2021. 57 per cent in APAC say they use their phones or tablets to watch on-demand TV, which means that mobile-friendly content is key to engage.
Nonetheless, TVs are still the go-to device for a good number of markets. This included half of the APAC markets that GWI studied, like Australia, New Zealand, and Vietnam. Around two in five APAC consumers now own a smart TV – a 25 per cent jump in the last two years – and 52 per cent say they use a TV set to watch on-demand content.
This is good news for advertisers. Google reports that Connected TV (CTV) users are more engaged and emotionally invested, being more likely to watch with someone else. Better audio and visual quality also lead to a more immersive experience. People who stream content through their TV sets are skewing older and wealthier compared to those who watch on mobile.
Indian food delivery service Swiggy understood this well when they adopted a CTV-first strategy that targeted customers who were ordering while streaming the Premier League. Swiggy reached 47 per cent more high-income households, raising its profile and prompting viewers to download the app – a true success story.
Consumers are re-evaluating the streaming services they are subscribed to
Just as the COVID-19 situation clears, the cost-of-living crisis hits. None of us can really catch a break.
This has led to APAC consumers becoming more price sensitive towards in-home entertainment purchases. The good news is that the crisis is not affecting their love for TV streaming. The bad news – consumers in APAC are streamlining their entertainment expenses.
Among the APAC markets, GWI studied – around one in four streamers in five of these markets are thinking about cancelling a TV subscription, citing ‘paying for too many services already’ or ‘wanting to use another one instead’ as the main reasons for doing so.
It might be fair to say that there is a limit to the number of platforms consumers are willing to pay for, and that limit may get smaller as inflation continues to bite, especially in parts of the region where price sensitivity is higher. Only time will tell which services will come out on top in each market, and the choice of where to advertise must be made wisely.
Value and original content triumph price concerns
Nonetheless – it’s value that APAC consumers are prioritising when making their decisions on entertainment subscriptions. Content that is relevant to their interests (60 per cent) and original content (49 per cent) are more important to them than price.
GWI’s data shows that interest in cultural channels, lifestyle shows, and soap operas is falling in APAC. The lack of sports in 2020 also contributed to its decreasing popularity, and we will soon see if major events like the World Cup will bring sports fever back.
Also Read: Streaming the dream: How live streaming technology can increase access to brands
Challenging times have made people more drawn to genres that offer an escape from everyday reality – including drama, comedy, and children’s TV. In particular, Korean dramas and Japanese anime shows are catching on in many different parts of the world. GWI’s July Zeitgeist data showed that more than half of foreign content viewers globally say they’ve enjoyed content from other countries and want to see more of it. This could be why Disney+ is spending big and looking to serve up 50 new APAC originals by 2023, producing plenty of local language content.
In terms of which streaming channels are currently leading the pack – GWI’s ‘Why People Watch‘ study shows that it is Netflix in APAC, followed by iQiyi, and then Disney Hotstar.
Strong competition from short-form video platforms
GWI’s 2022 Global Media Landscape Report shows that outside of China, the number of consumers using TikTok globally has grown 40 per cent since Q4 2020.
TV streaming services are now competing for viewers’ attention with other forms of media like short-form video platforms. Twitter and YouTube, for instance, are gaining traction, especially among younger generations. India is YouTube’s biggest market. Over two-thirds of Instagram users are watching videos on the platform every month.
The popularity of short-form video and social media platforms is only going to grow, which brings an opportunity for different viewing formats to work together and complement each other rather than cannibalise the other.
A great example of this in action was the 2021 Netflix series Arcane debuting across Netflix and Twitch to accommodate Netflix users and those who prefer free-to-use platforms.
As the online TV streaming landscape continues to see shifts, hits from economic pressures, and increasing saturation and competition, one thing’s for sure and reassuring – TV streaming is only going up.
It is crucial for businesses and advertisers to keep a close track of the industry and consumers’ preferences and stay tuned in to what and how people want to watch.
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