The US online streaming service has now confirmed its plan to expand further in Asia in early 2016. New territories will include South Korea, Singapore, Hong Kong, and Taiwan. Subscribers in these countries will gain access to Hollywood and local TV series and movie content, as well as Netflix’s original series.
Details on content line-up, devices availability and local pricing have not been disclosed yet. However, in all current markets Netflix is using 3-tiered price structure based on the video quality and number of simultaneous streams.
Netflix continues with its global expansion plan to be in 200 countries by 2017. Four new markets will provide Netflix with potential user base of over 22m broadband households. By the end of 2015, 92% of Singapore, 89% of Hong Kong, 76% of South Korea, and 61% of Taiwan households will have broadband connection. While the total pay TV penetration in 2015 will be 62.8% in Singapore, 87.6% in Hong Kong, and 98.7% in South Korea.
In contrast to Japan, international brands like Hulu and Amazon Prime have not entered these 4 countries yet. Existing market players are mainly video on demand services from Pay TV operators and mobile operator services. Singtel TV Go and StarHub Go are multiscreen services available for Singtel TV and StarHub TV subscribers in Singapore. In Hong Kong, now TV by PCCW offers multiscreen service. Besides, in South Korea, Hoppin is offered by SK Telecom and Taiwan mobile operator, Chunghwa Telecom, FarEastone and Taiwan Mobile are all offering own online streaming service.
As the concept of paying for legal online video service is still not very popular in the region, Netflix’s entrance could bring be a great stimulation for the Asian audience to understand the value of the service - especially the exclusive and original content and video quality.
Netflix plans to open an office in Singapore in the coming months, making it the hub for its expansion in the region. This will put pressure on the two new streaming services, HOOQ and iflix. Currently, Singtel-owned HOOQ is already available in Philippines, Thailand, Indonesia and India while iflix is available in Malaysia, Philippines and Thailand. These two services have first mover advantage in the Southeast Asia region. However, they have different approach as Netflix started from Asian countries with more development broadband and internet infrastructure while these services are targeting at emerging market in the region.
Netflix has succeeded greatly in North America and Europe. It is now available in 81 countries and by end of June 2015 there were a total of 65 million subscribers worldwide. The success in the Asian market will depend on a number of factors including the efficiency of the marketing campaign, signing the rights content deals with international and local studios, and the forming of partnerships with local companies.