The COVID-19 pandemic and lockdown has caused unprecedented changes to consumers’ daily lives and media habits in many countries around the world, and SE Asia is no exception. As we enter the post COVID-19 “new normal”, there is considerable uncertainty. Media companies, telcos, OTT platforms, and others are asking several important questions, including:
How have (video) viewing habits changed?...
…and what are the implications on monetisation / business strategy for players in the video / OTT industry?
To determine the impact of COVID-19 on consumer behaviour, Pioneer Consulting Asia-Pacific (PCA) conducted primary research in Thailand and Indonesia at the height of the pandemic.
Changes in (Video) Viewing Habits
With people confined to their homes as part of global lockdowns, it comes as little surprise that entertainment became a priority in the first half of 2020. Our research found that video viewing times on mobile soared in both Thailand and Indonesia:
In 2018, 20% of Indonesians and 22% of Thais spent at least 2 hours watching online video content each day
In 2020, 34% of Indonesians and 43% of Thais spent at least 2 hours watching online video content each day
More interestingly, even though TVs and computers were available in the homes of respondents, many still chose to consume online video content through on their mobiles.
During follow-up interviews, respondents highlighted that they believed mobile devices were not only for viewing on the go, but were also fast becoming the de-facto device for content consumption in the household. This was the case even amongst the older generation.
Implications on Monetisation and Business Strategy in OTT video
For many years, the OTT / video industry has monetised content mainly through two channels – advertising (AVOD) or subscriptions (SVOD). However, monetisation remains a challenge in developing countries due to a myriad of factors – for instance, rampant piracy, comparatively lower levels of disposable income, or poor reception by consumers.
With the increase in viewing time brought about by COVID-19, is monetisation still a significant challenge?
We believe that SVOD OTT platforms may still face difficulties in winning paid subs, but that AVOD platforms can capitalise on this growth if they are properly positioned. As long as ads are served in moderation, AVOD is a viable – and thriving – model in developing countries in SE Asia.
Figure 1 summarises our research findings on attitudes towards ads:
In particular, three main trends stand out to us from our research:
The majority of respondents were unwilling to pay to watch content online, primarily because of the economic uncertainty created by COVID-19. Many households were reluctant to commit to a paid service, even if it were on a month-to-month basis.
One of the biggest inconveniences about watching online video content was that too many ads were encountered…but most respondents conceded that online ads were necessary.
More than half of those saying that ads were the biggest inconvenience they faced were also unwilling to pay for content
Pioneer Consulting Asia-Pacific (PCA) is an international management consultancy specializing in telecoms, media, gaming, ePayments, digital banking, emerging digital ecosystems and other digital developments. PCA also undertakes primary market research, and provides executive training and coaching to its clients.