Global streaming providers push for price hikes as Asian market grows and matures

International streaming groups are using their growing market power to drive up prices and profitability in the Asia-Pacific region. Many of the region’s local competitors enjoy a significant share of revenue but lag behind the global giants in terms of earnings.

That was one of the most powerful messages to emerge from the opening keynote delivered by Vivek Couto, managing partner at consulting firm Media Partners Asia, on Wednesday, the first morning of his APOS conference in Indonesia.

Global streamers are tightening the monetization screw, he said. “Netflix started out as a direct-to-consumer (D2C) business model, but now it’s more reliant on partners for the next phase of its growth. Disney is going in the opposite direction, increasingly focusing on D2C products. Warner, with MAX, will try to find a balance in different markets, such as its recent deal with U-Next in Japan,” Couto said. Max, a streaming platform combining content from Warner, HBO and Discovery, is starting to roll out in Asia on Wednesday.

“Price increases are becoming more common. At the same time, there is more advertising on both SVOD and user-generated platforms (for example, Netflix with ads, Prime Video, TV and YouTube increasing their ad load, stopping ad blockers and increasing YouTube Premium prices). This is due to the desire of platforms to move to annual plans,” he said.

Disney is in the second phase of its model, phasing out discounted partner pricing and pricing its offerings more in line with Netflix, Couto explained. “As markets evolve, so do the offerings.”

In a slide, Couto showed that the four largest entertainment and technology companies, Amazon, Meta, Netflix and YouTube, will earn about $21.6 billion in video revenue in the Asia-Pacific region this year. That’s just over twice the combined $9.6 billion in video revenue earned by 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 outperform their local peers), the Big Four earn a staggering $240 billion, compared with $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 “resized” the entertainment landscape. According to that analysis, Amazon is now the world’s leading entertainment company with total annual revenue estimated at $583 billion by 2024, ahead of YouTube owner Google, with an estimated $333 billion. Meta, which owns Facebook, WhatsApp and Instagram, comes in third with a projected $150 billion in revenue.

The meta, however, is not that far ahead of China’s Bytedance (owner of TikTok and Douyin). And Bytedance has more revenue than traditional entertainment giant Disney, at $92 billion, and China’s Tencent at $91 billion. Netflix is ​​expected to have $39 billion in revenue this year.