KUALA LUMPUR, Nov 1 (Bernama) -- According to a report released today by strategy and economics consulting firm AlphaBeta, titled “Asia-On-Demand: The Growth of Video-on-demand Investment in Local Entertainment Industries,” video-on-demand (“VOD”) services are expected to invest up to US$10.1 billion (RM42.4 billion) in Asia by 2022, growing 3.7x from the amount spent in 2017. The study also found that Asian consumers of VOD services continue to show a strong appetite for local content; prompting industry players to focus on becoming more locally relevant.
Around US$4 billion of this expected investment will be in the form of foreign direct investment by global players. Additionally, the economic impact VOD players will have is expected to be more than 3x the amount spent on investment. This is especially when considering direct spending within the industry on core operations (e.g. equipment, transport, catering, marketing, hospitality, etc.), which in turn drives indirect spending by suppliers (e.g. camera lenses, catering, transport fuel, etc.), and induced spending from workers employed spending their wages in the economy. Up to 736,000 jobs could also be created by this spending in 2022; and there may be spillover benefits to other industries, such as tourism, music, or merchandised products.
At the same time, the study found that the number of paying subscribers in Asia is expected to double in five years, and that viewers in Asian countries have a strong appetite for high quality local content. To meet this growing demand, VOD services will have to become more locally relevant; driving investment to develop more high quality local content to attract and retain subscribers.
Commenting on the report, Konstantin Matthies, AlphaBeta Engagement Manager said, “Given its nascency, the economic impact of VOD services in Asia - particularly in the entertainment industry - has received limited attention to date. This research aims to fill this gap by providing a fact base on the industry’s potential value. The report further identifies best practices, alongside key policy actions to ensure Asian countries can capture this opportunity.”
He added, "As the VOD industry grows in Asia, demand for locally relevant content will drive players to spend a meaningful part of this investment in stories from the region. This is contrary to perceptions that VOD’s easy access to foreign (i.e. Hollywood) content would reduce local demand and dilute cultural values. With strong consumer demand for local content, VOD players will have to increasingly provide high-quality local content to align with these preferences.”
The report outlines seven key findings:
1. Video-on-demand (VOD) services are expected to invest up to US$10.1b in Asia by 2022.
Globally, VOD operators spent around US$21 billion in 2017 and while Asia accounted for only around US$2.7 billion in content spending in 2017, this could rise by 3.7x by 2022. Around US$4 billion of this spending is in the form of foreign direct investment by global players.
2. Demand for local content will drive investment, with an emphasis on quality over quantity.
Contrary to common belief, viewers in Asian countries have a strong appetite for local stories and spend equal time watching local and foreign content. With paying subscribers in Asia expected to double over five years, VOD services will need to focus on producing high-quality local content to attract and retain consumers.
3. VOD makes it easier for Asian entertainment to reach over 450 million people globally.
VOD services are enabling the dissemination of Asian content to wider audiences abroad. For example, the TV series “Sacred Games” from India was watched online by viewers in over 190 countries. This can potentially drive cultural influence and demand for Asian exports, including tourism.
4. The economic impact is expected to be 3x the amount VOD players spend on content.
Direct spending within the industry on core operations (e.g. equipment, transport, catering, marketing, hospitality, etc.) in turn drives indirect spending by suppliers (e.g. camera lenses, catering, transport fuel, etc.), and induced spending from workers employed spending their wages in the economy. Up to 736,000 jobs could also be created by this spending in 2022. Finally, there are spillover benefits to other industries, such as tourism, music, merchandized products, etc.
5. Further benefits to local industry could be realized in the form of financing production hubs, skills upleveling, low-cost distribution, and global partnerships.
The benefits that VOD players provide to the local industry is not just through their content spending. They build local skills and introduce new technology. The ability of VOD operators to broker partnerships between local and international players can also be crucial in raising the international appeal of local content, as well as enabling knowledge transfer.
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