The growing availability of high-speed internet and the rising popularity of smartphones and other digital devices have fuelled the demand for online services in South-Eastern Asia. This trend has resulted in an upward trajectory for online advertising spending in South-Eastern Asia, reveals Omdia’s Nivasheni Soundrarajan and Sharon Kong.
Omdia’s data shows that the total combined online advertising revenue in key South-Eastern Asia markets, including Indonesia, Malaysia, Philippines, Singapore, Vietnam, and Thailand, will reach $3.74bn by the end of 2023 and is projected to rise to $6.92bn by the end of 2028.
Omdia projects that the online share of total advertising revenue will grow from 52.3% in 2023 to 58.4% in 2028.
Cinema advertising revenue has experienced fluctuations, with a decline in 2020, but Omdia expects this to be followed by a slow and steady rise that will result in significant growth to $0.18b by 2028.
The linear TV advertising market will see a compound annual growth rate (CAGR) of 3.1% from 2022 to 2028, a little below out-of-home advertising at 3.8%, which has displayed moderate growth despite fluctuations. Print advertising faces a continuous decline, while radio advertising is forecast to remain relatively stable throughout 2028.
Why Viu is winning the OTT race
Nenek Bongkok Tiga streamer Viu currently leads the pack in South-Eastern Asia’s OTT video race, with a 23% market share in online video subscriptions, followed closely by Disney+ Hotstar at 21.4%, while Netflix trails behind in third place with 13.1%.
PCCW-owned streaming service Viu, which first entered the regional market in 2016, cemented its position in the region with its early strategy of providing Asian and localised content to its viewers, alongside its own Viu Original series. Viu’s balance of premium subscriptions combined with an ad-supported model and lower subscription fees compared to its counterparts has also catapulted the streamer to its top-ranked position.
Viu’s South-Eastern Asian subscriber base is expected to reach 12.5 million at the end of 2023, while Disney+ Hotstar’s (currently available in Indonesia, Malaysia, and Thailand) will cross the 10 million mark to hit 11.7 million at the same time.
Netflix, which recently cut subscription prices ahead of its password-sharing fee reveal, is projected to record seven million subscribers in 2023. While Netflix’s ad-supported plans are unavailable in the countries under coverage in this report, this may change in the near future, particularly in Singapore, where the streamer does not offer the Mobile plan, currently the cheapest tier in other parts of the region.
Additionally, Netflix will be able to charge higher CPMs in this market, making its ad-supported plan lucrative in Singapore. As new players expand into the market with their respective local content strategies and subscription churn occurs, SVODs will need to explore new revenue streams, such as ad-supported plans, or increase subscription prices to keep up with content costs.
In markets where consumers are price-sensitive, OTT video platforms that offer freemium and ad-supported options, such as Viu, WeTV, and iQiyi have thrived. For local players, the AVOD segment is still a growing trend in most parts of the region, while other international players have yet to introduce their ad-supported plans as ad yields and profitability remain a concern in these countries.
The excerpt above is taken from Omdia’s ‘South-Eastern Asia: Online Video Trends 2023′ which is available to read in full here (subscription required). Nivasheni Soundrarajan is senior research analyst, TV & online video, and Sharon Kong is research analyst, TV & online video, at Omdia, which is part of Informa, as is TBI.