In Conversation with Dinesh Ratnam on the Future of Entertainment in SEA

This interview was first published in Marketing Weekender Issue 302

When iQiyi launched outside of China for the first time by expanding to Malaysia in 2019, the OTT platform knew it was entering a competitive market. Yet, with focused marketing strategies, outstanding content creation and a strong distribution strength, iQiyi has become the fastest-growing streaming service in Malaysia with a user base that grew by 15 times in 2020 alone.

There is no denying that 2020 was a historic year world-wide. As people across the globe were forced to stay at home to protect themselves and others from the COVID-19 pandemic, their behaviour as consumers played a huge role in many world-changing and paradigm-shifting developments that occurred.

In the world of media consumption, one of the biggest revolutions that took place during this time was the fast-track shift of traditional TV to digital. Especially in South East Asia, this revolution has permanently rewritten the consumer’s viewing habits and one of the driving forces behind this revolution is the emergence of over-the-top (OTT) media platforms.

OTT refers to any platform used to watch professional video content over the internet by providing the user with the freedom to choose what they want to watch, when they want to watch it and which device they watch it on.

A survey report released by The Trade Desk on The Future of TV in January this year revealed that there are 13 million OTT users in Malaysia with 20% of these users categorized as heavy users (more than 4 hours of use per day). 

As more Malaysians rush to purchase internet-connected smart TVs or sign up for set top box services that turn their family TV into a computer, there is no question that this trend will continue. Instead, the pertinent question is, which OTT platforms will continue improving its consumer experience in creative ways to stand out from the crowd.

In a recent interview with the Country Head of iQiyi Malaysia, Indonesia, Singapore & Brunei, Dinesh Ratnam, MARKETING Magazine had the opportunity to find out more about his team’s efforts in growing its business in Malaysia, milestones they’ve hit and what they have coming soon.

Currently in Malaysia, people have access to Netflix, Amazon Prime Video, Disney Hotstar, HBO Go, Apple TV and even a few other niche streaming platforms. Has iQiyi managed to carve a strong enough position for itself in this highly competitive market?

Yes there’s no denying that this is a highly competitive market but iQiyi has been the fastest-growing streaming service in Malaysia. In fact, we are the most downloaded OTT app over the last 12 months. At iQiyi, we take pride in being the leading entertainment platform in Asia that is powered by technology and in Malaysia, iQiyi has achieved not only rapid growth in terms of users and downloads but also has one of the highest content consumption and engagement levels.

While we are 2^nd only to Netflix in terms of monthly active users and total minutes streamed in Q1 2021, we are the clear leader among other Asian OTTs.

Overall we’re very pleased with where we are in the market now, and with a lot of ambitious plans for content and development in the pipeline, we think we will further strengthen our position in Malaysia as the go-to source of Asian content.

That’s very impressive. So what does iQiyi offer customers that is different from other OTT platforms?

Off the bat, I’d say it is the depth and breadth of our quality Asian Content because when it comes to Asian content, iQiyi is second to none. We know Malaysians love their Asian content and iQiyi offers the biggest and top-rated slate of Asian content of all kinds, including Malay, Korean, Chinese and Anime. 

I’m not sure if you know this but according to Google’s 2020 Year in Review, the 10 most searched titles in the entertainment-related category were all Asian titles. There wasn’t a single Western title in the list!

This not only shows the demand and interest for Asian content among Malaysians, but also strongly indicates that audiences are actively searching for a collection of titles that haven’t been provided in a big and all-encompassing way by other services. So, iQiyi seeks to fill that void.

When the Google list was released, out of the Top 10 most searched titles, 4 of them were content that’s available on iQiyi, including a Malay title, 7 Hari Mencintaiku 2 – which is licensed exclusively to iQiyi.  It was the number one local Malay drama in Malaysia last year. The other titles were Korean titles – The World of the Married and Parasite, and the fourth is a Chinese variety show, which is the iconic variety show of iQiyi, Youth With You.

The availability of these popular shows bears testament to our focus on not only breadth but quality as well across all types of Asian content. Anime is also another genre that we feature strongly. In fact, when we launched Attack on Titan, a top Anime title, we were the most downloaded Free App in Malaysia, higher than MySejahtera and Tiktok!

On top of this, we also focus a lot of our efforts into creating a seamless user experience. Our proprietary technology allows users to enjoy high-quality viewing within 2 seconds of ‘Play’. A great viewing experience also means important features like subtitles including Bahasa Malaysia, English, both Simplified and Traditional Chinese to cater to our Malaysian audiences, as well as video resolutions (up to 1080p) and audio like Dolby Sound no matter what device they’re on.

iQiyi International launched in Malaysia with a freemium model. Tell us a bit more about the thinking behind the free layer and how it is positioned? Also, what role does the AVOD layer play as a key revenue driver?

Since launch, we’ve been operating on a “freemium” model, offering both subscription and ad-based viewing options. This model allows users the freedom to choose between the option of free viewing or paying for a better viewing experience. We want to provide as much flexibility and the best experience to our users as possible. Most of our titles are free to watch with ads as we want to maximize reach and viewership and provide full access for our users. VIP (paying) users might have access to these titles in advance of Free users but Free users will still have access nonetheless. This is because we consider our “free layer” to be just as important as our “VIP layer.”

We have also seen data and survey results that indicate users are willing to watch content with ads as a trade-off, as a substitute to paying for our service. We see AVOD being a key revenue driver as more brands are realizing the importance of OTT as a must-have tool in their digital advertising arsenal, providing the benefit of brand safe premium content like you would on TV but being even more customizable, targeted and measurable. Our premium offering to advertisers presents them with targeted solutions for different segments of users, resulting in higher personalization and customization for a more dynamic ad delivery.

How can local advertisers benefit from OTT investments, specifically with iQiyi’s advertising strategy?

iQiyi caters predominantly to a “digital first” millennial audience that is highly digitally engaged. OTT advertising within iQiyi presents a premium content environment which is targeted and measurable. It can also be customized and personalized which significantly reduces noise and clutter, compared to advertising on other digital video platforms.

 Through OTT platforms, we are able to effectively target audience segments based on the type of content they are watching. For instance, a beauty or cosmetics related brand may choose to have their ads on romance or Korean content, which typically have a predominantly female audience. We’ve also worked with some brands who have taken this to another level by also targeting specific scenes in the content, by inserting overlay advertising in scenes when the female characters are putting on skincare or makeup. Another big targeted audience segment is the Gen Z market, who are “OTT-first” in how they choose to consume content.

Ultimately, brands who choose OTT platforms to advertise are able to get eyeballs on their products or services on a sizeable and increasingly growing scale, to a targeted and highly engaged audience. From an advertiser’s perspective, that’s really the gold standard.

How has iQiyi’s partnerships with companies such as Astro, Media Prima, Maxis and Celcom propelled its growth in Malaysia?

For one, these partnerships have helped us to create high awareness, reach and distribution among Malaysians. These partners are all heavyweights in their own right and household names, so being able to work with each of them in a big way has helped us accelerate our growth.

Overall, we see partnerships as a key strategy for us and we seek to work with as many partners as possible while simultaneously striving to customize our approach for each partner which has seen win-win outcomes for both sides.

We’re always on the lookout for like-minded partners in our journey and hope to delight our Malaysian audiences with our commitment to deliver the best in Asian entertainment. We have a lot of upcoming exciting announcements coming soon, and are excited for what the coming months will bring for Malaysia’s entertainment industry.

As the number of online streaming platforms/OTT platforms increases, what direction do you foresee this market heading toward and what does iQiyi’s growth plan in Malaysia look like?

Firstly, Malaysia is one of the most important markets to iQiyi’s International business – iQiyi has made many ground-breaking strides in Malaysia just within the past year alone as we launched local content and formed multiple partnerships.

We will continue building on the success and momentum that we’ve worked hard for in the past year, and are excited for our upcoming plans which will see us further establish and cement our position as the Asian streaming platform of choice. We want it so that whenever a user wants to watch any Asian content, be it Malay, Korean, Chinese or Anime – iQiyi is the first platform that comes to mind.

It is also important to us that we become a significant and active driver of growth in the local content ecosystem as opposed to just being a passive player in the industry. Our team here is very passionate about growing and investing in local creative talent, which Malaysia has plenty of.

To achieve this, while continuing to invest in and work with our content partners to license top quality local content, we will also be working on differentiated original productions and eventually hope to bring some innovative formats from China over to Malaysia.

On top of this, we also want to be a platform of choice for the global export of local content. In this regard, we seek to enable Malaysian storytellers to reach an international audience and play an active role in nurturing young local talents.

Malaysia has such a rich history and there are so many talented Malaysians with amazing multicultural stories to tell – we want to help the world discover these stories. 

Dinesh, on a more personal note, you were an investment banker in London and San Francisco in a previous life before you came back to Malaysia to work at Catcha Group with Patrick Grove, and then moved on to become the Country Manager at iflix. What did you learn across those different experiences that are helping you today in your current role with iQiyi?

I consider myself really fortunate to have had the experience of working abroad as an investment banker during the early days of my career – it was a great training ground to build a foundation in strategy and analytics.

But the last 5 years in Malaysia were even more formative for me. Being able to work closely with Patrick for a few years was an amazing opportunity.

Being a seasoned and highly successful entrepreneur, there were many things that I learned from him, but what I admired and respected the most was his bold vision and his positivity and perseverance no matter the circumstance.

I’ve come to really appreciate that more over time, especially when you’re trying to build a brand or a business from the ground up. My time at iflix was an eye-opener to the streaming space and I learned so much from the people I worked with about the industry and the importance of personalization, localization and truly understanding your customer.