Battle for dominance in Malaysian OTT market escalates

The incumbent over-the-top (OTT) media providers in Malaysia will need to rejig their existing business model from not just relying on subscriptions.

Consumers are getting more discerning and there is more free content out there, and this is putting a lot more pressure on the incumbent players.

As reported by the Financial Times, Lam Swee Kim, chief marketing officer at dimsum, said that “achieving profits is and will remain a challenge”.

“The industry will need multiple revenue streams and payment partners to ensure that the business is sustainable,” he told industry press.

“For all players, it will be tough if they keep dropping prices as consumer habits will be created and difficult to change,” Lam added.

Netflix and other players are crowding out the market.

Rival “tonton” ended its subscription service in August last year in favour of an ad-supported model.

And earlier this year, Johary Mustapha, CEO of Forest Interactive, told Digital News Asia that there is widespread reluctance in Malaysia to part with money for content.

“The only exception to the rule here is Astro where people are willing to pay for its services,” he said.

WARC reports that Astro is the clear market leader, with a reported 5.7 million subscribers to its various services (including non-OTT options).

The future is all about being agile.

Nonetheless, the company is having to react to aggressive pricing strategies from competitors like Netflix.

At the end of 2018, Netflix launched a mobile-only service priced at less than half an Astro subscription.

Astro in response now offers a “pay per view” option, with cheap passes available for as few as three days at a time.

Worryingly, according to recent research by the Asia Video Industry Association, almost 25 percent of Malaysian consumers are using modified TV set-top boxes to watch pirated content.

Perhaps its time companies become increasingly agile to stay relevant to an increasingly discerning customer base that values quality over quantity.

Sources: WARC, Financial Times and Digital News Asia

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