Asian streamers and producers discussed survival strategies, including the launch of a joint content fund, to stay competitive against the growing dominance of Netflix, at a conference at Busan’s Asian Contents and Film Market (ACFM) today.
Tcha Seungjae, a former producer and Dongguk University professor, laid out proposals for building a coalition of Asian OTT companies for “continuous production and expansion of original content.”
Using Nordisk Film & TV Fund as a case study, Tcha proposed raising pan-Asian funds from both private and government sources; schemes to facilitate joint production, as well as sales and acquisition of each other’s content; and also suggested countries in the region work together on areas such as governance, profit-sharing and training.
Referring specifically to the Korean market, Tcha said local streamers did not struggle with the ability to produce good content, but that they lacked resources to be able to produce it consistently over the long term, at the scale that is required to prevent subscriber churn.
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He pointed out that legacy media platforms such as Disney+ and Warner Bros Discovery also have this problem – and have been forced to bundle up to enhance original content and keep subscribers – but that they still can’t come close to Netflix’s 269 million global subs.
“One of the problems we face [in Korea] is reflected in Busan’s opening film Uprising, which has been financed by Netflix and the IP is owned by Netflix; we are just looking at ways to protect our culture and own our IP,” said Tcha, whose producing credits include iconic Korean films such as Save The Green Planet! And Memories Of Murder.
“Each market and legal framework are very different from country to country, but if we have a consultative body and joint fund, in couple of years we will be able to help our creators to protect their IP in the Asian market,” Tcha continued. “The industry has changed, and we are moving towards being dominated by US companies, so we have to innovate and work together to overcome these difficulties.”
Figures presented by Tcha and Dongguk University lecturer Hong Juhyun highlighted the need for action. Netflix is currently the SVOD market leader in Korea with 10.42 million subscribers, followed by local streamer TVing with 6.64 million, Coupang Play with 5.41 million, Disney+ with 3.04 million, and Watcha with 0.54 million.
But it was the revenue figures that revealed Netflix’s dominance in the Korean market. The global streamer currently has annual revenues of $611M (KRW823.3BN) with profits of around $9M (KRW12.1BN), according to figures presented by Dongguk University, while the next two platforms Tving and Wavve have revenues of $242M (KRW326.4M) and $184M (KRW247.9M), respectively, and are both are making losses.
The conference also included presentations from several producers and streamers from elsewhere in Asia – including China’s iQiyi, Taiwan’s FriDay, Vietnam’s Skyline Media and Indonesia’s Klikfilm – about how they are holding off the competition, with all concluding that strong original content is key.
While Korea is an extreme case, the picture is not much different across the rest of the region. Subscriber numbers and revenues are expected to keep growing, but Netflix is gaining market share against local streamers in most territories, with the exception of China where it is not allowed to operate.
Indonesia is another market where Netflix is yet to dominate as it had a slow start, being effectively banned between 2016 and 2020, and where it currently has just over 2 million subs while local player Vidio, owned by media conglomerate Emtek, has more than 4 million.
Taiwan and Vietnam are among the most fragmented markets in the region, with multiple local and global players competing for market share. Netflix is the biggest SVOD player in Taiwan, while local platform FTP Play is just ahead of Netflix in Vietnam, where several global streamers are operating although none have been officially licensed.
Consolidation has also been a survival strategy – Japan’s U-Next, which has a 12.6% market share compared to Netflix with 22.3%, has merged with Paravi, which has a 2.3% market share. (As in many markets, YouTube has the biggest market share with 47.7%). While it wasn’t discussed on the panel, Korea’s Tving and Wavve are also reported to be in merger talks.
Busan’s choice of opening film, period drama Uprising, produced by Netflix and co-written and produced by Park Chan-wook, has been a hot topic of discussion at this year’s festival as the film won’t receive a theatrical release at a time when local box office and the Korean film and TV industries are struggling.
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