A week after making its regional debut in Japan, Netflix has announced its next wave of Asian expansion, targeting launches in Hong Kong, Korea, Singapore and Taiwan early next year.
The rollout is in keeping with Netflix’s strategy of focusing largely on affluent markets first. Fixed broadband is a mass proposition in all four territories, providing easy access to people’s homes.
The challenge – one that will become more pressing worldwide as Netflix continues to broaden its global footprint – is attracting an audience that wants to watch more than US movies and dramas.
“With the exception of Singapore, other markets have a very strong local content ecosystem,” highlighted Aravind Venugopal, VP at Media Partners Asia, in an interview on Bloomberg.
An emerging domestic ecosystem for paid video, with homegrown SVOD plays, has already taken root in all four markets, although revenues are geared more towards transactional rather than subscription services in Korea, and a single platform, Toggle from MediaCorp, in Singapore.
Other contenders, as well as new partnerships, are also taking shape, accelerated by Netflix’s long-expected arrival. The SVOD giant wants to be present in more than 200 countries by the end of next year, up from around 50 today.
A move to counterbalance Netflix's presence is especially likely in Korea, where the linear system has served Hollywood studios well in the past.
“Netflix’s brand will work in its favor, but the local players aren’t going to sit still,” Venugopal said.
“You also have to remember that the Hollywood studios and the channel operators in this region are trying to do separate deals here,” he added.
“They don’t want to give away the SVOD business to one player. They want to have additional competition in this space.”