The total cost of ownership (TCO) for a 5G network can be up to six times that of a 4G network of comparable size. Keeping 5G TCO from spiraling out of control has proven to be a challenge for over 80% of MNOs globally. With operators at various stages in their evolutionary journeys, there is no one-size-fits-all approach to 5G deployment. Which options are viable? How can MNOs determine the most suitable approach for their needs?
Navigating the new normal of media
What opportunities and challenges lie ahead for Southeast Asia’s media players?
"Media industry players face new opportunities and challenges across the value chain, and must be agile and innovative to succeed amid disruptions."
The media industry continues to undergo disruption of its value chain, primarily driven by technological advancements and changing consumer behaviors. As competition for audience attention intensifies, traditional players such as broadcasters and publishers are under increasing pressure. The overall media value chain and ecosystem continue to evolve, with significant consolidation and strategic moves among key players. These shifts are transforming how content is produced, distributed, and consumed, while fundamentally reshaping revenue models. To remain relevant, media companies are forced to innovate or they risk becoming obsolete. How can they stay ahead in a rapidly evolving digital landscape?
Path to sustainability
Like global markets, Southeast Asian markets are starting to see the decline of linear TV and the acceleration of Over-The-Top (OTT) adoption, with digital video users accounting for over 80% of internet users.
Macro factors, such as increasing affluence and improved broadband connectivity, have driven the acceleration. However, there is significant headroom for growth as penetration in the region still lags behind more developed regional and global peers.
Players will need to address various market challenges in realizing this opportunity, especially in developing subscription behavior, driving customer monetization, enabling scaled and cost-effective route-to-markets and mitigating the threat of piracy.
Our survey in Indonesia indicated that on average, customers would only pay between IDR 20,000-60,000 per month (~USD 3.5) for a premium OTT subscription. At the same time, companies are grappling with the end of streaming media’s profitability-free ride, with investors no longer satisfied with growth at all costs.
Proper models to succeed in the digital video space
With media consumption changing from linear to anywhere, anything, and anyway experience, media business models will continue to change fundamentally in the next decade. Faced with overload and fragmentation, consumers are revisiting their streaming subscriptions.
Platforms are then needed to innovate their models, especially to find a suitable trade-off between reach, engagement and monetization. Currently, profitability remains a future ambition for the industry, with most streaming players still operating at significant cash loss or are only marginally profitable.
The lines between OTT business models are increasingly blurred. Monetization methods have become increasingly diversified, with potential differentiation by region/segment to suit a specific market and consumer behavior.
Content remains king, but finding the right kingdom is becoming increasingly complex
Local content
There is a strong and growing preference for local content, including for cinema. The recent pullback in local investments by certain global OTT players presents an opportunity for local players.
Live sports
Live sports is a major driver for high-value acquisition. Video leveraged on EPL to gain SVOD market share in Indonesia. However, cost recovery remains an issue given the high cost of rights
Regional and niche content gains traction
Beyond Hollywood, certain content (such as C-Entertainment, Bollywood) has relatively broad consumption in SEA. Intra-regional exports have also gained some success, especially with discoverability within global platforms.
User-generated content is popular and can be monetized
Popular among teenagers and young adults, short-form content enables users to livestream content and potentially monetize it with in-app microtransactions.
Tent-pole content / IP as differentiator
Tent-pole content and Independent Producers remain as drivers for differentiation/acquisition, with a disproportional majority of the market value captured by hits and blockbusters.
Emerging business models and alliances
Players are innovating business models to adapt to the changing landscape. Innovation is seen across the entire value chain and covers all aspects of the business, from product/proposition, go-to-market, delivery and operations. In our full article, we explore these models in more detail.
Conclusion
Players are innovating business models across the entire value chain to adapt to the rapidly evolving landscape.
A strong focus on digital, data, and content can be key elements towards building sustainable media businesses, allowing players to capture emerging opportunities (and mitigate the risks) from structural transformation that impact the entire value chain.
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