The digital entertainment landscape in Malaysia is on the cusp of a significant transformation, according to recent forecasts by GlobalData.
As the nation embraces the streaming era, Subscription Video-on-Demand (SVoD) services are poised to become a staple in Malaysian households.
A Surge in Streaming: From 26% to 43% in Five Years
GlobalData’s Malaysia Subscription Video on Demand (SVoD) Forecast (Q1 2024) paints a picture of rapid growth.
The household penetration of SVoD services is expected to leap from 26% in 2023 to an impressive 43% by 2028.
This surge is not merely a statistical anomaly but a reflection of changing consumer preferences and technological advancements.
The driving forces behind this growth are multifaceted.
As broadband services continue to improve across the country, Malaysians are increasingly turning to over-the-top (OTT) platforms for their entertainment needs.
This shift is further accelerated by the ongoing cord-cutting trend, with traditional pay-TV viewers migrating en masse to on-demand video services.
The Numbers Game: CAGR and Competitive Strategies
The forecast predicts a compound annual growth rate (CAGR) of 11.8% for SVoD subscriptions between 2023 and 2028.
This growth is fuelled not only by changing viewer habits but also by the strategic moves of OTT service providers.
Competitive pricing strategies and significant investments in premium local content are at the forefront of these efforts.
Kingsley Warner, Country Manager of Viu Malaysia, reiterates the importance of local content creation: “Local stories reflecting the unique experiences and cultures of Malaysian communities will be in high demand. Creators will need to be bold and innovative to stand out from the crowd since OTT video streaming platforms such as Viu enable their shows to be seen by audiences across 16 markets.”
Netflix Leads the Pack, But Competition is Fierce
While the SVoD market in Malaysia is growing, it’s not without its frontrunners.
Netflix claimed the largest share of Malaysia’s total SVoD subscriptions in 2023 and is projected to maintain its leadership through 2028.
The streaming giant’s success is attributed to its heavy investments in high-quality regional content and the introduction of affordable mobile-only plans.
However, the Malaysian market is far from a one-horse race.
The price-sensitive nature of the market has led to innovative strategies from other players.
Warner explains, “Viu‘s current model offers flexibility with a freemium option and subscriptions. Partnerships is another key lever for growth. We work with many ecosystem partners from pay TV, broadband providers to telcos who bundle our subscription with their offerings to offer more value for their users.”
Content is King: The Differentiation Game
In the battle for Malaysian viewers, content offerings have become a key differentiator.
“Content differentiation will likely focus on offering unique content libraries. Global players might invest more in global blockbusters for reach while local players will likely go deep on local content. Local productions will be the unique proposition to clearly differentiate the players in this space,” adds Warner.
This diversity in content strategy reflects the varied tastes of Malaysian audiences and highlights the importance of catering to local preferences while also offering international hits.
“Viu actively invests in Viu Originals, showcasing local talent and potentially influencing traditional production towards streaming-friendly formats. Overall this will be good news to local content creators because they now have more distribution channels to monetise their IPs,” continues Warner.
The Future of Malaysian Entertainment
As Malaysia’s SVoD market continues to evolve, it’s clear that the future of entertainment in the country is streaming.
Warner predicts, “This could lead to increased production of Malaysian content as SVoD platforms invest in local stories. The focus might shift towards creating content specifically for SVoD platforms rather than traditional television formats.”
With increasing penetration, innovative pricing models, and diverse content offerings, Malaysian viewers are set to enjoy a rich and varied digital entertainment landscape in the years to come.
As SVoD platforms continue to balance international content with local productions, the Malaysian entertainment industry stands on the brink of a new era, promising exciting opportunities for creators and viewers alike.
