Streaming Video Services Flood Emerging Markets
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Bibliographic details
- Authors: ADAM BEHSUDI
- Published: June 1, 2021
Overview
- Streaming video offers emerging markets an avenue for content at home and around the world.
- Streaming giants like Netflix, Disney+, and Amazon are growing new audiences and overlapping markets, opening burgeoning film and television industries in some emerging markets to new possibilities and changing the economic calculation for producing films.
Market growth and infrastructure
- Subscriptions to video streaming services in India grew from 4.5 million in 2017 to 59.6 million in 2020.
- Indonesia saw growth increase from 200,000 subscribers in 2017 to 8 million in 2020.
- Thailand and the Philippines saw growth in the same period of 130 percent and 71 percent, respectively, according to Media Partners Asia.
- In India, the sector accounts for 1 percent of GDP by some estimates.
- Nigeria: more than a million people work directly or indirectly for Nollywood—the second-highest employer after agriculture.
- China overtook the United States in box office sales last year.
- Infrastructure improvements and a mobile revolution—particularly in India—have multiplied connectivity and driven down data prices, making smartphones the primary access point for streaming video.
Business strategies and competition
- Netflix launched a mobile-only plan in India in 2019 that would allow users to stream content to their smartphones or tablets for less than $3 a month; Netflix rolled out a similar plan in Malaysia.
- Telefónica announced in 2018 a multiyear partnership that would allow subscribers to seamlessly sign up for Netflix on its platforms across Latin America.
- In Africa, Netflix is working with telecommunications operators to make it easier for potential subscribers to make payments.
- Disney+ acquired Hotstar in 2019; Hotstar now comprises 30 percent of the streaming service’s subscriber base.
- Netflix gained 36.6 million customers in 2020, its largest annual gain, and now boasts more than 200 million subscribers worldwide.
- Amazon announced in March that it would move beyond television shows and co-produce its first big Bollywood feature.
- US-based companies dominate through financing local content, while also facing competition from domestic streaming services.
Effects on content production and trade in cultural goods
- Streaming services have increased competition and redefined possibilities for content creation, elevating lower-budget productions and high-budget films onto the same platform.
- Digitization has created economies of scale and scope, increasing both supply and demand for a greater quantity and variety of creative content and making distribution more efficient.
- The internet has lowered production costs and expanded distribution channels, contributing to an “explosion in creation in music and movies.”
- Trade in cultural goods remains sensitive: European countries mandate a portion of locally produced content; China carefully monitors foreign content, resulting in streaming dominated by Chinese players Tencent and iQiyi; cultural sensitivities in India have forced US companies to make course corrections.
- Where US-based giants operate, they have acted as facilitators of trade by making it easier for content to travel beyond borders, creating a “two-way street” for cultural exchange.
Pandemic effects and consumer behavior
- An annual survey of thousands of viewers from 10 advanced and emerging market economies found that nearly half of those surveyed subscribed to streaming services in the first half of 2020, with spending more time at home cited as the main reason.
- The pandemic accelerated trends toward streaming, including straight-to-streaming releases in markets where that model had previously lagged.
Economic and cultural implications
- For producers, streaming offers visibility beyond natural geographic reach and the potential for national stories to gain global recognition and economic contribution.
- Large streaming platforms’ commitment to invest locally is critical to grow creative economies and to mitigate hostility against foreign giants.
- New technologies have democratized filmmaking capabilities, while streaming platforms help match viewers to content, reducing uncertainty in predicting hits.
Source: Streaming Video Services Flood Emerging Markets – IMF F&D (June 2021).
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