Global streamers are aiming for price increases as the Asian market grows and matures

Multinational streaming groups are using their increasing market power to increase prices and profitability in the Asia-Pacific region. The many local competitors in the region have a significant turnover share, but usually lag behind the global giants in terms of revenue.

That was one of the sharpest messages to emerge from an opening speech by Vivek Couto, managing partner at consultancy Media Partners Asia, on Wednesday, the first morning of his APOS conference in Indonesia.

Global streamers are turning the screw on monetization, he said. “Netflix started as a direct-to-consumer (D2C) business model but is now leaning more on partners for the next phase of its growth. Disney is moving in the opposite direction, with an increasing focus on D2C products. Warner will try to find a balance in different markets with MAX, such as with the recent deal with U-Next in Japan,” said Couto. Max, the streaming platform that combines content offerings from Warner, HBO and Discovery, will begin rolling out in Asia from Wednesday.

“Price increases are becoming more and more common. At the same time, advertising is increasing on both SVOD and user-generated platforms (e.g. Netflix with ads, Prime Video, TVving and YouTube increasing ad burden, stopping ad blockers and increasing YouTube Premium prices). This stems from the platforms’ desire to make annual plans,” he said

Disney is in the second phase of its model, phasing out discounted partner pricing and bringing offerings closer to Netflix’s, Couto explained. “As markets evolve, supply evolves with it.”

In a slide, Couto showed that the big four entertainment technology companies, Amazon, Meta, Netflix and YouTube, are estimated to earn $21.6 billion in video revenue in the Asia-Pacific region this year. That’s just over double the total video revenues of Disney/Viacom18, CJ ENM, U-Next, PCCW, Foxtel, NC, Asto and Indonesia’s SCMA.

But in terms of their global profits (and therefore their ability to outsmart locals), the big four earn a whopping $240 billion, compared to $1.5 billion for the same group of local market leaders. That makes them more than 150 times more powerful.

In another segment, Couto said technology has “shrinked” the entertainment landscape. According to that analysis, Amazon is now the largest entertainment company in the world, with total annual revenue for 2024 estimated at $583 billion, ahead of YouTube owner Google with an estimated $333 billion. Meta, owner of Facebook, WhatsApp and Instagram, is in third place with an expected turnover of $150 billion.

However, Meta is not that far ahead of the Chinese Bytedance (owner of TikTok and Douyin). And Bytedance has bigger revenues than traditional entertainment industry giant Disney, with $92 billion, and China’s Tencent with $91 billion. Netflix is ​​expected to generate $39 billion in revenue this year.